The steps to buying a house in Spain

In the search of the property of your dreams there are various criteria where your home must meet. In addition to the general characteristics of the home it is important that you should ask to yourself, what further needs are important and if it is within the capabilities of your budget.

  • Want an existing building or a new construction?
  • What is the purpose of the home ? (vacation, (semi) permanent residence, investment or rent)
  • What type of home do you want finca, apartment or villa?
  • What location do you have in mind ? (sea, center, landscape)
  • What budget do you have available and what amount you can invest with or without mortgage?
  • How is your health and what facilities are needed ? (Elevator / staircase / access facilities)

On our web site Select Homes Spain we provide you with a comprehensive overview of houses and apartments on the Spanish Costa's. By means of the search function it allows you to enter your own wishes to a large selection of homes. If you wish to make personal contact to discuss your needs you can make known this via email, phone, or our specific wishes form. We are always willing to contribute to your quest.

Probably the most important point to mention here is primarily the site visit. Normally 3 days. It is the only way you can convince yourself of the property and its environment. Important to us here is the comprehensive and individualized attention. This includes, quite understandably, a to your needs tailored sightseeing.  To realize this principle we do in general no group inspections, so you can be sure of your personal consultation.

Once you have decided on the property that you want to buy, the process is as follow:

Preliminary check on the property

With a Nota Simple from the Property Registry (Registro de la Propiedad), you'll find out if the property is free of debt, if it really belongs to the seller, and if the description of the property matches what the buyer has been told (to avoid surprises about missing square meters). 

The mortgage 1

In the process of buying an existing property in Spain, the mortgage is going to take the most time, so we start to work immediately. First, you go about retrieving all the documents that the banks ask for. Then they can pre-approve you, and you can safely sign the pre-agreement and pay the down payment, knowing that you can cover the money required, and be ready for the closing on the date stipulated in the pre-agreement.

The pre-agreement

Between the seller and the buyer, it's best to have a contract in place until the public deed of purchase is ready. It's usually a simple document in which the seller expresses their intent to transfer the property to the buyer, and the buyer expresses their intent to buy at the price and conditions agreed upon. At this time, the buyer also gives to the seller a percentage of the agreed-upon price, typically 10%. The typical agreement in Spain (called contrato de arras) is if the buyer backs out of the contract, they lose the deposit; if the seller backs out, they have to pay double. Of course, the buyer and seller may choose another type of agreement if they prefer.

The mortgage 2

Once the bank has a copy of the pre-agreement, they hire an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. The bank will only give you a loan equal to a determined percentage of the appraised value of the house. Note that the seller or broker needs to be available so that the appraiser can get in to see the property. At the closing, you will be charged for the appraiser's work, usually between 300-500 euros. Note that the tasador is by law a licensed architect, so even if you don't need a mortgage, but have doubts about the structural integrity of the house, you might want to order an appraisal.

The closing

The property transfer must be certified by a notary. The deed of purchase will be given to the buyer after the notary reads it and the parties present agree to the contents of the deed. The following must then be presented: proof of identity (or power of attorney) of both parties, the seller's title of property (a form that reports the investment to the Central Register), and the buyer's payment. The buyer and seller sign the contract; beneath their signature, the notary signs using his firma protocolizada and the deed is ready for taxes.

Taxes

For the buyer: transfer tax (impuesto de transmisiones patrimoniales) and stamp tax (impuesto de actos jurídicos documentados).

If the seller is an individual, the buyer pays a tax of 6% (7% in some regions) of the price specified in the deed. If the seller is a real estate developer and the building or land to be built on represents a first-time transfer, then the buyer pays VAT tax instead, meaning 8% for housing, 18% otherwise. If for housing, you have to add a stamp tax, in this case reduced to 0.5%, depending on the region (for Madrid its 1.5%). Some special conditions apply for the Canary Islands.

For the seller: a local tax called the plusvalia (sometimes it is agreed that the buyer pays this tax).

With a copy of the deed in hand, the seller must go to the City Hall (or wherever local taxes are paid). After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property's valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia. It's best to ask at the notary's office about this payment.

Property Registry

You must register your deed at the local office. This guarantees that your ownership rights to the property are fully protected. (Some small towns don't have an office; some big cities have many -- check the original deed of the seller to find out which office corresponds to you). You will be charged a standard fee (about .4% of the first 6010 euros, going down to .02% for over 6,010,121 euros).

In all phases of the realization of your dream, as well as afterwards, Select Homes Spain is here for you. The execution of the necessary formalities with authorities as well as supporting help by a desired financing of your dream object belongs to our service achievements. We take the work from you, so you can enjoy your new home in the sun.

Specific wishes

Do you have specific wishes or requirements? Send us a list with your wishes and we will contact you as soon as we find a property that fulfills all your wishes.

Contact us with your wishes