Expert guidance and market knowledge to find your perfect villa in Marbella.
Here some of the things you need to consider when buying a property in Spain. This process will be simple and painless if you work with professional partners.
After a proper orientation, a visit to the area and eventually having chosen your perfect villa in Marbella, you move on to actually buying your new home in the province of Malaga. There are a number of important steps to follow in the buying process.
First, check who the landowner is and if the land is free of mortgages and depths. Once you are owner of the property and the land it stands on, then you're the first one to be held liable for old mortgages or depths. In principle, already by ownership transfer (officially handing over the keys of the villa), you are owner of the villa in Marbella.
To actually be registered as legal owner of a villa in Marbella you have to deal with numerous other procedures, like registering with the "registro". To prevent problems from occurring in a later stadium, a first cadastral research is advisable. You or your lawyer will ask the registro de propiedad and the catastro for a copy of the title deed ("escritura") and nota simple. The authorities will provide you with all details of interest to you regarding the property at the Costa del Sol. If everything is all right you may proceed to sign and register.
After having signed the escritura, and being registered with the registro the propiedad and the catastro, you will be legal owner of your Marbella villa.
SLG assists you during the orientation phase.
Prior to arriving in Spain, you should make sure that you have at your disposal sufficient funds to cover the reservation sum. The absolute minimum required is normally € 3.000 to € 6.000 but may be greater for higher priced properties. The reservation sum may be paid with a credit card or cash. A cheque if drawn on a foreign bank may take up to ten days to clear by a Spanish bank.
If you do not have the means to lodge a reservation sum immediately you may risk losing the property to another party who has the reservation sum ready to lay down. There are virtually no exchange controls in Spain which means that, whether resident or not, you are free to obtain a loan or mortgage against your property in any currency and from any bank in the world. Spanish banks are quite willing to lend to non-resident purchasers of Real Estate. You will need:
- A photocopy of your income tax returns
- Three months salary slips
- A bank reference
- A breakdown of assets and liabilities
- Last three months bank statements
- If self employed, statements of accounts
- Negotiating the purchase
Once a suitable property has been chosen the purchase terms and price will need to be negotiated with the seller. You may wish to make your offer subject to mortgage or Lawyer approval, or vary final completion dates, or the method of payment. The salesman who was good at finding the property may not be as good at negotiating the terms of sale with the owner. Ask to speak with the senior sales person or sales manager in the company and discuss with him the formation of a team to negotiate and carry through the terms of your purchase. The sales person may at this stage feel it of benefit to bring into the team a recommended lawyer to assist in the negotiation making sure that any offer meets his legal criteria.
Choosing a Lawyer
There are many excellent local Lawyers in Spain who are fluent in your language. A Lawyer will provide the legal guarantees for the purchase of the property ensuring that Spanish legal requirements are met and that the property is bought free of encumbrances, charges, liens or debt and up to date in all its payments of local contributions and community charges.
The lawyer may also assist the sales team in difficult and complex negotiations with the owner. Using a Lawyer from your home country will substantially increase your legal costs and almost certainly delay the sales process.
Formalizing the offer
Once there is a verbal accord between parties the next step will be to formalize the offer terms of purchase in writing. Funds should be lodged in a local bank account or with your Lawyer in order to show the seller that there is a real intention to purchase. It is normal practice in Spain to include with the offer a sum of money to reserve the property until exchange of private contracts..
Exchange of private contracts
Upon acceptance of the offer by the owner the next step in the sales process is to exchange private contracts of sale or to sign an option to purchase. This may take place within two weeks following formal acceptance of the offer or sooner. Your Lawyer will have completed his searches and investigations of the property and will have arranged with the owner the procedure for the cancellation of any outstanding debts.
The private contract of sale or option will reflect all the agreed terms of the offer and sale and set out the date for final completion at the Notary. It is customary practice at this stage to pay ten percent of the purchase price which normally is non-refundable should the purchaser not complete.
Final completion at the notary
A sale is formally completed in Spain when the public title deeds of purchase are signed before a notary, the final payment made, and possession given to the buyer.
Once signed, the notary will fax a note of the title deed to the local land registry. Your Lawyer will also pay on your behalf all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds.
Final registration of the deed may take up to two months. Similarly, your Lawyer will arrange for the transfer of accounts with the local suppliers of utility services such as water and electricity and organize payments through a local bank.
Costs involved in purchasing a property
There are in principal three fees and two taxes to pay when purchasing property in Spain. As a rule of thumb, you should budget the combined total of these amounts will be around 10% of the purchase price.
The fees are as follows:
- Legal fees: Minimum of €600 or 1% of the purchase value whichever is the greater plus value-added tax (I.V.A) currently charged at 16%.
- Notary fees: the scale is fixed by law and may range from €300 for lower price properties to €841,40 for higher priced properties.
- Property Registry: as a rule of thumb is 60% of what the notary charges.
Transfer tax (ITP) at 6% or, when buying from a promoter, developer or habitual trades, IVA at 7% or 16% plus Stamp Duty at 1%. The IVA rate of 16% is applicable when purchasing parcels of land, commercial premises, or garage spaces.
Plusvalia normally payable by the vendor but it may be stipulated that the buyers pays. This may range from a few thousands pesetas to as much as several million pesetas on larger properties with a lot of land. Who pays this will be discussed in the negotiations and in consultation with your Lawyer.