How to buy a property in Spain and not get lost in it

Have you been on vacation in Spain? Have you fallen in love with Spanish paella? Are you an avid cyclist? Or just want to invest your money to make it work for you and not just “rest” in the bank? That’s great! The first step is already behind you! Congratulations!

All procedures step by step:

Step 1:

The first thing we need to do is find our dream property in the maze of online listings.  

We have several options:

Version 1: we do everything ourselves. We find an offer. We check it out. We fly to watch and buy. Sounds simple, right?

Version 2: we look only for Contracotrs (if we are thinking about a new apartment). We find an offer. We make an appointment and fly to visit…or if we don’t have time we buy blind only according to the plans and presentation.

Version 3: Take a Real Estate Agent!  This option is by far the best, safest and often against all odds the cheapest.

Step 2:

PropertyForYou works for you in the following areas:

• if we choose this option, the task of the real estate agency is to find the most interesting offers adapted to our needs and financial possibilities. It is also the task of the real estate agency to preliminarily verify the offers before the client goes to the site
• visiting of potential properties on site + language support if needed. Although our office is located in Poland we are able to participate with you during your visit to Spain
• support of the whole process of purchase and obtaining information what are the stages of construction with offers from the primary market
• support in obtaining legal advice
• assistance in organizing the documents needed for the loan
• Indication of companies engaged in interior finishing and decoration. The apartments are handed over in the following condition: bathrooms completely finished, kitchen furniture, floors and walls repainted in the rooms.

PropertyForYou operates under the highest standards, so the safety of our clients is very important to us. We carry liability insurance and work ONLY with proven builders, law firms and real estate agencies in Spain.

Step 3:

Regardless of which of the above versions we choose when buying our dream property in sunny Spain we must remember that the price for the property itself is not everything. As everywhere, there will be additional fees waiting for us, which we cannot avoid.

Below I will try to explain briefly what are the components of the final price of our property. 

We choose a property. We like it visually, location-wise, in short, we want this one.

Some information about additional costs and formalities:

Let’s start from the beginning. New build. The price of the property in most cases is the net amount. To this amount we must add the so-called IVA or VAT and it amounts to 10% of the value of the property.

Additional costs for the purchase are about 13-15% of the value of the property. They include min:

• 1.5% of the so-called AJD (Impuesto de Actos Juridicos Documentados) or tax on civil law transactions. Payable when buying new property from the primary market. If we buy a second-hand property then this fee is not there until we do not reinforce the loan. Then it amounts to 1.5% of the value of the property.  

• administrative costs. These are any additional costs we incur:

* notary: the fee depends on the value of the property and is regulated by law. It may be subject to change if we use a loan (the amount of the mortgage deed is added)

* entry in the land register: determined on the basis of the value of the property

* if you want to use a mortgage, a real estate appraisal will be prepared for the purpose of the loan. The cost of such a valuation is about 300-600 euros

* bank commission on the loan

* bank account maintenance – fees in accordance with the bank’s table of fees.

* ITP- i.e. transfer tax. Payable if you plan to purchase a property from the secondary market. Up to 10% of the value of the property depending on the region and municipality and if the total price does not exceed 1 million. Euro. In order to avoid double taxation Itp. Does not apply to sales contracts with VAT

* lawyer. At this point I would like to stop for a longer period. It is not mandatory to use a law firm. However, we strongly recommend that you take advantage of this type of support. The cost? Depending on the scope of services about 1% of the value of the property. However, the price is determined after a meeting/discussion with a representative of the law firm

Step 4:

A few words about why you should use a lawyer.

First of all. A lawyer residing in Spain and dealing with the purchase/sale of housing is up to date with all the regulations that may be difficult for us. 

Secondly. Using a lawyer we get in return the security of the transaction. His main tasks are:

– checking the purchase and sale agreement

– checking the condition of the property, and most importantly its history and debts if any. A very important aspect when buying from the secondary market!

– Setting up an account in a Spanish bank on our behalf (if we do not want to or cannot do it in person). This is an obligation for foreigners. The Spanish account will be used in the future to pay for the use of the property and utilities.

– Applying for an N.I.E (Número de Identificación Extranjero) number. That is, a tax identification number for foreigners. As with a bank account, this is an essential thing. It is not possible to sign a notarial deed without this number

The cost of the notarial power of attorney for the above activities is about 250 eur. 

– The presence of a lawyer at the signing of the notarial deed 

– assistance in concluding agreements min. with energy suppliers, etc. after signing the notarial deed of transfer of ownership (the whole process of registration of real estate takes about 2 months).

Step 5: 

Documents and procedures we need to meet to purchase a property:

– valid identity document ID card or passport

– N.I.E number

– an established bank account in Spain

The above conditions we can and even must do after signing the reservation agreement and before the notary contract. 

– if we plan to apply for a mortgage then we apply in a Spanish bank, preferably where we have an account. The procedure is very similar to that in Poland…maybe even a little easier.

– after signing the reservation agreement (usually the reservation fee is 10% of the value of the property, there are cases that it is agreed individually with the property owner) we sign the sales contract in the usual form and pay the agreed subsequent tranches, if we are dealing with a property from the primary market. If the purchase is made on the secondary market then after signing the reservation agreement, the date of the notarial contract and the final payment is set. As in our case. 

-after the conclusion of the notarial deed, it takes about 2 months to enter the property in the registry

And after that? After that, all that remains is to enjoy our new home or investment. But about investment a few words another time.

The above information seems like a difficult path, however, with the support of our company PropertyForYou, it will become much simpler.