HOME BUYER’S GUIDE
More and more people are buying property in Spain, whether as a retirement home, holiday getaway or investment.
Buying a property in Spain is the dream for many people who are looking for a wonderful place to live, high quality of life, and a sunny location. However, it is necessary to do your research so that you can buy the property of your dreams.
At GPC Group, we understand that the process of buying a property in a foreign country can be intimidating. You have probably heard about the high cost and long-term problems when things have gone horribly wrong.
But we can assure you that the process to buying a property in Spain is very straightforward - so long as you are armed with the right information beforehand. Which is why at GPC Group, we’ve put together this comprehensive Home Buyer’s Guide.
If you are thinking about buying a property in Spain, this guide will allow you to plan your purchasing process quickly, thoroughly, and efficiently... 100% hassle-free. From making your first offer to picking up the keys once your new home is build, GPC Group has put together this comprehensive overview of what to expect when buying property in Spain.
Appointing a Legal Representative. Before you buy a property be sure the legal documents are in order. In Spain it is not mandatory to use a solicitor or lawyer when you buy a property. This may allow buyers to save up to 1 or 2% which corresponds to their regular fees.
But if you want to avoid these costs it is absolutely recommendable to use a serious and well established Building Company. Avoid young or not officially registered companies; you don’t know if they still will be here next year…
In GPC Group, we check the legal documents of every house which we sell meticulously. We will explain to you the legalities involved in the purchase and also carry out the due diligences on the property and prepare all the documentation required to complete the transaction.
Our contracts are written in Spanish and translated into English and other important languages.
Before, during and after we accompany you in every step and will assist you in your own language.
The process begins by the selection of the location where you want to live. Once you have selected the location, we will start a search for the plot that best adapts to your requirements and needs. Following this step, we will have a meeting with the team of architects, taking in to account your priorities and desires to know exactly what you want in order to design the distribution and characteristics of your home. We will proceed to formalice the contract.
The Private Purchase Contract. A Private Purchase Contract (Contrato Privado de Compraventa) is essentially as part of the transaction to buy property at home. It creates a binding agreement between you and the Building Company, establishes a completion date and sets out the terms and conditions of the sale.
The contract will stipulate all the terms and conditions of the sale and the payments methods during the process of the construction, including the final date by which the title deeds must be signed at the Notary and final payment made.
For those who are looking to buy property in the Costa Blanca region, GPC Group, has extensive contacts with local banks and can help provide the best mortgage offers to our clients.
When we have finished defining how the house will finally be and we have the plans fully drawn and perfected, we will proceed to prepare the execution project. In meantime we will procedure to obtain the proper building license in the corresponding Town Hall.
Once the execution project has been completed, allowing us to begin the process of construction, which will take approximately 12 months for the completion of Medviewvilla´s house and around 18 months for the completion of an INHABITAT´s house.
During the process of construction, several reunions will be arranged, where we will check on the completion of the several milestones stablished, which will assure that we maintain within the agreement stablished within the contracts. Also, every week, we will inform you of how the construction is advancing via e-mail, where we will also answer any doubts that may appear during the process.
In the event of the completion of the house, we will proceed to the key delivery, our company well take charge of any legal procedures that may be necessary in order to complete any legal requirements of the Spanish law.
Completion of Purchase. A property purchase reaches formal completion with the signature of the public deeds (Escritura de Compraventa). This is signed by both the buyer (or a designated third party) and the seller in the presence of a Notary Public (Notario). The Notary Public is an official of the state who certifies that contracts are legal by checking that all the formalities involved in the transaction have been met. At this point, the buyer pays the agreed sum and possession of the property is handed over to the buyer.
The Notary Public keeps the original of the document and the buyer is issued with a second authorised copy, which is then entered in the Property Registry. This means that if the buyer loses the buyer’s copy, then the notary public can always issue a new one.
Unless the parties have agreed to change the terms beforehand, the Sales Contract always states that the property is free from all charges and encumbrances, that there are no outstanding debts connected to the property and that the seller is handing over a vacant possession (i.e. no other tenants or occupants are at the property).
The Title Deed and Registration. Once the Sales Contract has been signed at a Notarial Public, this will immediately send a notification to the relevant Property Registry. GPC Group or your solicitor can then begin with the formal procedure for registration of the title deeds and the purchase will be transferred to your name in the Property Registry's database.
Once registration has been completed, the Property Registry will send the title deed (Escritura Pública) back to the Notary Public where it is ready for collection.
FEES WHEN PURCHASING A PROPERTY IN SPAIN
It is important that you are also aware of the costs that are involved in buying a property in Spain. On average, these expenses usually come to between 12% and 13% of the property purchase price. You will be required to pay 3 fees as well as 1-2 possible taxes which are explained below. Finally, GPC Group has also included some other miscellaneous expenses, which may be involved when buying or owning a property in Spain.
Fees When Buying:
1. Legal Fees. If you choose to hire a lawyer or solicitor to supervise the transaction, these fees usually amount to around 1% up to 2% of the purchase price + VAT, barring any unforeseen complications during the transaction. Your lawyer should be able to give you a detailed estimate of the costs that are likely to ensue from your particular case.
In Spain it is not mandatory to use a solicitor or lawyer when you buy a property. This may allow buyers to save up to 1 or 2% which corresponds to their regular fees. But if you want to avoid these costs it is absolutely recommendable to use a serious company.
2. Notary Public Fees. This fee is fixed by an officially established scale which takes a number of different factors into account including the price of the property.
3. Property Registry Fees. The Property Registry (Registro de la Propiedad) will also charge you a fee for entering your title deeds in the register. They use a scale that is related to the price stated in the title deed to assess the exact amount to be charged and is normally less than the Notary public fees.
Taxes When Buying:
1.Taxes in Spain.
If you are buying off-plan (purchasing directly from the developer), you pay 10% tax of the
purchase price, but this is charged as VAT (IVA) & an additional stamp duty of 1%.
If you want to buy a building plot, you most likely will end up buying it from a company. In this case, you will also pay 21% VAT (IVA) of the purchase price & additional stamp duty of 1%.
But if you buy a plot with a construction project (it doesn’t matter if the house is completed or
yet to be built!), you will only pay 10% VAT (IVA) of the total purchase price & stamp duty of 1%. - This is a way to save 11% taxes on the building plot.
2. Municipal Tax on Property Sales (Plusvalía municipal). This tax is paid to the local administration and is based on the increase in the value of the land since it was last bought.
Usually, the seller takes charge of paying the Plusvalía. However, some Sales Contracts stipulate that the buyer is responsible for meeting this expense. This is an issue during negotiations over the terms and conditions of the Sales Contract.
Additional Fees & Expenses.
Other fees to keep in mind when purchasing a house in Spain include:
Property Tax (Impuestos Bienes Inmuebles or I.B.I.). The Property Tax you will pay once a year varies depending on size and location.
2. Waste Tax. The Waste Tax depends from the municipality and the type of property.
3. General Utilities. Potential costs incurred could include water, gas, electric, telephone/Internet. Properties have their individual meters.
4. Home- or Property Insurance. Unless you have a mortgage it is not obligatory. But we strongly recommend to contract a property insurance as the protection of your home and its inhabitants should be a top priority. GPC Group is happy to inform you about all important matters on this behalf to keep in mind and provide you offers of the best priced and most complete insurance policies in the market.
GPC Group can help you in all stages to find the best solution and conditions for the mortgage of your new property, benefitting from our close relationship to leading banks.
After Sale Services:
Which is why GPC Group offers a full spectrum of After Sale Services, all in your language, catering to any of your needs as they should arise after the purchase of your property.
1. Payment of Additional Taxes and Fees. We will engage and supervise the payments of your Property transfer tax (ITP), Land Registration and Notary fees. We can recommend you an a consulters company.
2. Automatic Payment for Future Receipts. We can change all the bank information of any properties purchased from the previous owner to your bank account. Once this is done, you never have to worry about it again. And all future receipts will be paid automatically from your account.
3. Fiscal Advice and Representation. If you own a property in Spain, both residents and non- residents should make a tax declaration once a year and have a fiscal representative. For a small yearly fee.
5. Furniture Packages. If you are looking for elegant and stylish interior decorations for your home, we collaborate with the best designers. GPC Group offer full concepts of interior design.
6. Renting Your Property. For many homeowners, renting their property is an interesting option due the big demand of an international clientele. We can recommend you the best companies in the area.
Buying a property in Spain should be a hassle-free, unforgettable experience which allows you to see your dream finally come to life.
ALTERNATIVELY YOU CAN FILL
IN THE FOLLOWING CONTACT FORM:
TO CONTACT OUR SALES TEAM
PLEASE CALL OR EMAIL US:
Tel: +34 865 645 190
Calle Santa Maria 11
03710 - Calpe (Alicante) SPAIN