Buying property in Spain: design features and payment methods

Spanish legislation allows anyone to purchase real estate, even if he is not a resident of the country. It regulates all aspects of real estate transactions, describes and elaborates all the details. Therefore, the rights of any buyer are maximally protected. This allows you to make transactions for both individuals and legal entities.

Any foreigner can buy both residential and commercial real estate without restrictions. But not only clear legislation creates favorable conditions for the purchase: a special attitude towards private property and a flexible system for managing any real estate have evolved over the centuries. Therefore, long-term investments in this sector of the economy are reliable and profitable.

Having decided on the object for purchase, the preparation of documents and the procedure for its registration in the property begins.

The first and main document that lawyers carefully analyze without fail is Nota Simple informativa del Registro de la Propiedad (Nota Simple). It must be provided by the seller. This document contains basic information about real estate: who owns it, who has the right to own it. It also describes the characteristics of housing: footage, number of rooms, utility rooms, etc. Nota Simple also confirms the fact that the property offered for sale is free from any debts. The right to sell real estate has either the owner himself, or a person who has a notarized power of attorney.

After analyzing the Nota Simple, the lawyers check the entries in the Property Registry (Registro de la Propiedad).

However, already in advance (after choosing an object) it is necessary to obtain a NIE (for individuals) or CPI (for legal entities) - a tax number of a foreigner, without which no real estate transaction is carried out. Next, open an account in one of the Spanish banks. A deposit is made to this account, and in the future, money will be transferred from it for the purchase of real estate and payments for the maintenance of housing (utilities, taxes, etc.). Assistance in obtaining a NIE and opening an account is included in the services of our company COSTA PRESTIGE.

The next document is the contract of sale. It is concluded between the seller and the buyer. Compiled in triplicate. It sets out in a simple form about the unwillingness of both parties to make a purchase and sale transaction; it also stipulates the terms and price agreed between the buyer and the seller. Further, the buyer leaves a small deposit for the property (usually no more than 10% of the total cost of housing) in order for this object to be withdrawn from sale. From that moment on, it is reserved for the buyer.

After the procedure for processing the main documents, the buyer selects the form of payment:

You can pay the entire cost of the object at once, including 10-11% of additional costs upon purchase (real estate tax, lawyer and notary fees). Payment is made only by bank transfer: since 2012, cash payments for large purchases are prohibited in Spain!

You can pay in installments (10,20,30%), including 10-11% (the same tax, payment for notary and lawyer services).

You can also take advantage of a mortgage loan. Our many years of experience and cooperation with many Spanish banks allows any non-resident of Spain to apply for a mortgage.

Currently, most Spanish banks offer very favorable terms for loans: 50-60% of the value of the object and for a period of 5 to 30 years at 4-4.75% per annum. If the buyer decides to take advantage of the mortgage, then this aspect is also included in the contract of sale. However, he will be able to receive the registered original of the Bill of Sale only after the full repayment of the loan. Until that moment, the Bill of Sale will be in the bank in which the loan was issued.

As a rule, obtaining a mortgage takes about a month (sometimes a little longer: it all depends on the terms of the loan and the documents provided to the bank).

The most important document in the transaction is the Escritura Publika, which is prepared by a notary (the process takes 1 month). Escritura is signed in the presence of a Spanish public notary by both parties - the buyer and the seller.

After signing all of the above documents and obtaining a mortgage, the last step remains: registering the property in the Property Registry for the new owner (Registro de la Propiedad). This procedure takes from 1 to 3 months. After that, the buyer receives the registered original of the Bill of Sale - Escritura Publika. From that moment on, he is a full owner of the property and receives the keys.

In general, the cost of buying real estate does not exceed 10-12%. They consist of the following mandatory payments:

  • real estate tax (VAT): when buying a new home, VAT (IVA) is paid in the amount of 8% (if the value of real estate is up to 400.000 euros), 9% - from 400.000 to 700.000, and 10% - over 700.000 euros on the cost of housing ( since January 2013); when buying a resale property, VAT (I.T.P - transfer tax) is paid in the amount of 8% (8% for purchases up to 400,000 euros and 9%-10% over 400,000 euros); when purchasing land and commercial facilities, VAT (I.V.A) is paid in the amount of 21%;
  • registration in the property register (Registro de la Propiedad) - 0.5%;
  • notary expenses - up to 0.5%;
  • lawyer's fee - about 1%