Country Information > Spain
The buying process in Spain can vary from region to region, but the sequence below will help you gain an insight to how the process usually works with new build properties.
Identifying a property:
Cavendish Brooke International has a vast range of properties available, from which our client can choose. However, we recognise that you may wish to take advantage of our experience and skills to help you identify the correct property for you.
Choice is key to the service offered by us. Our professional, personal service means we take time to fully understand your needs, preferences, likes and dislikes and with our extensive experience, are able to exactly match what you want.
Surveys:
As is the case when purchasing a property in the UK, we strongly recommend that you conduct a survey on a property which is over 9 years old. Surveys typically take 7 –10 days and would cost approximately £600 to £900
Reservation fee:
It is the custom in Spain that, once you have agreed to purchase a particular property, the developer would expect a reservation fee. This will ensure that the developer delivers the exact property that you have identified and agreed. This is usually non-refundable, dependant on the developer. A typical reservation fee would be approximately 5,000 to 8,000 euros, this will be reflective of the purchase price.
Signing of contract
The Spanish legal system ensures that the contract is between the developer and you, the client. This is a very important document and should be discussed with your legal representative and should be fully understood by the purchaser, as it is a legally binding document. You can agree for your legal representative to sign the document on your behalf, you may also wish to sign a power of attorney with him/her if appropriate.
The first payment (30% in above example) will be expected at this stage. Payment should be via your lawyer to ensure transparency and to ensure your security. Should you require a foreign exchange service, we will be happy to help and guide you to trusted experts.
“Snagging”
An industry term used to describe the process of highlighting tasks and workmanship that needs completing or improving, prior to completing the purchase. This is a very important part of the process, as once you have completed, it is agreed that you are perfectly happy with all aspects of the specification and quality of the property. It is strongly recommended that you spend the necessary time on snagging as we want you to be absolutely happy with your purchase. Some clients employ professional advice locally to assist with the snagging process, you may consider this a worthwhile additional expense to ensure peace of mind.
Completion
The title document transferring ownership of the property is known as the escritura. It is necessary under Spanish law for the Escritura to be signed in the presence of the Spanish public notary. The Notary is a public official who enters into public record the fact that the title deed has been signed and that all parties understand the process. After the Escritura has been signed it will be presented to the Land registry for payment of the necessary fees. This can take some time and once your lawyer has been informed, ensure that they collect the documents on your behalf.
The purchaser may attend in person before the Notary, but arrangements can be made with your lawyer for another party to attend via a Power of Attorney agreement. Your lawyer will be happy to discuss this with you.
In order to purchase your Spanish property you are required to be registered with the Spanish Tax authorities and to have a foreigners identification number (NIE) or tax ID number (NIF). These can usually be arranged by your lawyer.
The balance of the payments (70% in the above example) will be paid at this stage.
Payments
The usual practice, when purchasing an off-plan property, is to make stage payments. Such payments will vary from development to development and will need to be discussed and fully understood prior to making any commitment. Normally developers will receive a payment on signing of contract (approx 30% of purchase price) and the balance (70% in this example) on completion and handover of the property. We would be delighted to identify, discuss and assist you with this information, to help you consider the impact of payment terms to your purchase.
When the Escritura is signed in front of the Notary either, the purchase price is, in his/her presence, handed over to the seller, or the seller confirms that the money is already handed over. Proof of such payment is then incorporated into the deeds of the property.
Additional costs
Most experts agree that a purchaser should allow an extra 10% over and above the purchase price of the property. These costs will usually cover the additional costs that arise with the purchase of property. They very approximately equate to 7% IVA tax on new build properties, 2% public notary, land registry etc and 1% legal costs. These figures are not exact and are for information only. We recommend you investigate and discuss these with your lawyer.