Buying Process
Simple steps to follow to buy a house in Spain.
• Sort your budget: First things first, you have to know how much you can feasibly spend on purchasing your new Spanish property and how much you’ve got saved up already.
• How will you pay? There are a number of options when it comes to paying for your house:
- One-off payment: Paying the total sale price of the property outright to the seller, normally by way of a bank cheque in their name that you hand over when you sign the property deed.
- Mortgage loan Getting a mortgage, either from the bank in Spain or at home, using the property itself as a guarantee against defaulting. Depending on how old you are and certain other circumstances, payment terms can be up to 40 years, with banks normally offering to loan 70% of the value of the house for non residents and the remaining 30% being paid from the buyer’s pocket.
• Decide what type of property you want and where, be it a new construction or second-hand, free or protected, on the seafront or in a city. You should choose the one that best suits your needs and personal situation. Once you find your dream home, you make an offer.
• Contract a solicitor: at this point you will want to have a solicitor to go through all the necessary documentation, title deeds, registry, etc. The solicitor will help you obtain your NIE (numero de identificación extranjera) your non resident tax identification number which you will need in order to purchase the property. The solicitor will also make the switch over of all the utilities into your name.
• Sign the deposit agreement (contrato de arras). This is the first contract that is normally signed and it’s a kind of preliminary safeguard for the rights of both the buyer and the seller, assuring both will enter into the sale agreement. When you sign, you’ll have to pay a deposit on the house, and with this you take on all the rights and responsibilities of a buyer. If you as the buyer later decide not to go through with the transaction, you will lose this deposit but if the seller cancels the sale to you, they will have to return the deposit to you.
• Sign the title deed. This part of the buying process must be done in front of a notary with both the buyer and seller present. The deed must contain a description of the property as well as explaining any mortgages or charges on the house, the final sale price agreed and how it will be paid, plus the taxes and expenses related to the sale. This is also a great chance to check that all the documents are present and correct, like the Energy Performance Certificate, insurance if applicable, and invoices for the latest tax and community cost payments.
• Pay the transaction costs and taxes. The main expenses to be paid when buying a home in Spain are the ITP Property Transfer and VAT taxes, capital gains tax, notary costs, the payment to register your name on the Property Register and any costs related to the mortgage.Please keep in mind that the total of all expenses will be about 12% above the cost of property you choose to purchase.
• Pick up the keys and move in to your brand new home!