Purchasing process information
We know the process of buying your dream home, either if it’s to live there or just an investment is a hard procedure. Especially if you are acquiring a property in another country. What you need to know is the following: buying a property in Spain is not hard if you are working alongside a good lawyer and a good real estate agent.
First step: Nota Simple
After you’ve found the right property for you, the next step is always contacting a lawyer. In Marbella, as well as in Costa del Sol, there are many lawyers exclusively working in real estate matters, so it’s not hard to find one who speaks your language.
The first important document in this process is what we call ‘Nota Simple’ (Simple Note), which is under the registration of ‘Registro de la Propiedad’ (Property Registry). What this note does, is stating if there are debts associated with this particular property. It’s important that your lawyer takes the time to read this document since its information must be equal to the characteristics of the property in order to be valid.
Second step: Pre-Purchase Agreement
If everything with Nota Simple is in perfect condition, the sale can go to the next step which consists of the signing of a pre-purchasing agreement that gives you ‘the right of the reservation of the property’. From this moment, the property is automatically off-market and can’t accept any more offers.
For the signing of this agreement, the buyer usually pays 10% of the total amount. There are special circumstances that can modify the percentage)
It’s important to note that if the buyer cancels the process of buying the property, she or he loses the deposit on its total amount. In the event of the owner/seller of the property decides not to go through with the process, she or he has to return the deposit on its double amount.
If both parties agree, there can be other agreements.
Third step: financing:
Financing is the following step, but it’s a process that takes place simultaneously with the signing of the Pre-Purchase Agreement. Once the selected bank entity sees the Agreement, it proceeds to make an individual valuation of the property. Please note that the acquired loan will be based on that amount, not the original selling price.
The fee for this process is from 300 € to 500 € depending on the banks and external factors.
To be the new owner of the property, you will need to find a notary, who will now certify the property transfer from the seller to the buyer.
The notary always checks the
Both parties sign the agreement by the notary and the process can be concluded.
Extra information: TAXES
Buying existing properties: the tax increases depending on the value of the property.
- Up to 400 €: 8%
- Between 400,001 and 700,000 €: 9%
- Over 700,000 €: 10 %
Buying off-plan or new developments: IVA (VAT) of 10 % and Stamp Duty 1,5 %
Extra information: NIE
Maybe this is one of the most important factors when buying a home. NIE is a unique identification card for anyone who wasn’t born in Spain. You will need one in order to buy a property in Spain and pay taxes. The procedure is simple, you can apply for it on the Spanish Consulate of your country or in Spain if you are spending time here.
Extra information: Registering your new property
As the new owner, you need a document that reflects the true owner of the property. To do this, you will have to do it at ‘Registro de la Propiedad’.
The fee is based on the amount of the property:
- 0,4 % on the first € 6,010
- 0,02 % on the balance
THE MINISTERY OF PUBLIC WORKS TRANSPORT AND HOUSINGA has a great outline on their website to: Safely Purchasing a House in Spain. For more detailed information visit their page.
Within the Spanish legal system there are a series of documents that certify that a house is completely legal. Make sure that you have all of them before purchasing a property. These are:
- A construction permit and certificate from a competent expert verifying that the building matches both the licence granted by the town council and the project it approved.
- A first occupancy licence, a habitability certificate and other administrative authorisations that establish that the dwelling is legally habitable.
- Documents signed by the utilities supplying the essential services (electricity, water, gas and telephone).
- The entry of the building in the Property Register (new buildings), together with insurance cover against hidden defects or flaws in the construction, as established by law.
- A Property Registration Certificate setting forth the legal situation of the building.
- The Owners Association Statutes (or inscription in the Property Register of the deeds of any new, finished and horizontally-divided building)
We also recommend:
- In the case of new constructions, for buyers to ask the developer for: a Certificate from the Commercial Registry accrediting the legal existence of the company, details of its registration, the administrators and/or their representatives, the company's registered office, its fiscal identity number, confirmation that bankruptcy proceedings have not been registered, and a declaration that there are no claims, lawsuits or any other contingencies that might affect the development.
- In the case of housing that is not newly built, ask for last year's property tax receipt, a certificate signed by the president of the Owners Association and endorsed by the building’s secretary stating that the property you are buying is up-to-date with all payments, as well as a formal confirmation and a public document stating that the property is not subject to any rental contracts
In 2013 Spanish market changed forever when Golden Visa was introduced. This new market strategy states that with an investment of at least 500.000 € in real estate, you, and your family can get the Spanish residency.
After five years of living in Spain with your NIE (Número de Identificación de Extranjeros) you are able to apply for the permanent residency. After 10 years of living in Spain, you are able to apply for the official Spanish citizenship.
For this process it is important to have full legal advice. At Key Real Estate we can help you find the perfect professional for your Golden Visa.