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Breakdown of expenses below, in total, we advise our clients to estimate 11% to 12% purchase costs when considering buying a property. Those clients who require a Spanish mortgage should estimate 12% to 14% costs.
Notary Fees – Approx. 600€ (Prices vary depending on Notary)
Land Registry Fees – Approx. 300€.
8% Tax of the purchase price for a Resale property (Property Transfer Tax) in Spanish Impuesto sobre Transmisiones Patrimoniales (ITP). For a property priced at 400.000€ or more the property transfer tax is 9%.
1.5% Tax of the purchase price for a NEW property when bought from a builder/developer (First Registration Stamp Duty). This document fee is in addition to the 10% IVA (VAT) which is payable instead of the Property Transfer Tax. Therefore the total amount payable is 11.5%.
Solicitors Fees – Approx.1,500€. Lawyers have differing scales of charges which can range from 1% to 1.5% of the property price + 21% IVA (VAT).
The mortgage process in Spain is very different to the UK process. There are two main ways to obtain a mortgage in Spain. The first way is a completely new mortgage, negotiated with the bank. The second way is to take over the mortgage already obtained by the previous owner (developer or private seller) of the property. This second method can save money as some of the taxes would have already been paid by the previous owner.
Banks are more flexible now on a complete new mortgage and tend to make a decision on fee charges on a one to one basis. They will offer a better deal for example, If a client has his or her mortgage approved and offers the bank additional business i.e. opening a savings account, having house insurance and life insurance with them etc., and in some cases might waiver the fee altogether.
Mortgage Fees:
Opening Commission - 1% of mortgage amount
Notary and Land Registry fees - Approx. 1,000€
Mortgage Tax - 1 - 1.5% of mortgage amount
Bank Admin fees - Approx. 500€
Home Insurance - Approx. 250€ per year
If you take over an existing mortgage then you will save on the mortgage tax and usually the opening commission as well. Many banks are now insisting that Life Insurance be taken out to obtain the mortgage, so this should also be taken into account when calculating your expenses.
Required documents for Re-sale and New Build property as follows:
Nota Simple: Land Register Certificate.
Escritura: Title Deeds
IBI: Real Estate Tax, annual rates
Basura: Rubbish collection
Last Paid Utilities: Water, Electric, Telephone etc.
NIE Number/s: Vendor's Residence number.
In some cases the following documents will also apply:
A Copy of the License of 1st Occupation.
An Expediente: Certified Document from the local Townhall stating all legal requirements & financial liabilities for a property have been met.
We strongly advise you to retain a Lawyer to act on your behalf to make all the necessary checks on the property ensuring that it is properly registered and free of all charges and encumbrances.
Only with all the above documents in their possession can a Lawyer / Solicitor do the searches necessary to ascertain the legitimacy of a property for sale in Almeria.
You should ask any agent representing a Vendor if they have these documents in place and if the searches have already been made on the property before agreeing to view the property for sale in Almeria. RMB Spain adhere and by law (Consumers Protection Act - Decree 218 - Andalucia) are required to have copies of the ALL the above documents in our possession prior to any property for sale in Almeria being listed with us.
It's always advisable to request copies of paperwork, such as the Nota Simple for your Lawyer / Legal Representative to check before signing anything or putting any money down and prior to making any kind of offer on a property for sale.
Buying any property for sale in Almeria can seem daunting at the best of times, but even more so when that commitment is overseas with an unfamiliar system, language and culture. RMB Spain help guide you through the Spanish property buying process from beginning to end as efficiently and stress-free as possible.
The first step is to appoint a Lawyer or Solicitor to act on your behalf. The Lawyer will carry out searches on the property and advise you on proof of ownership and any charges (mortgages, embargos, etc.) which would need to be lifted before, or at the point of sale.
Once these initial checks have been carried out, a Holding Deposit, also known as a Reservation Fee (usually 3,000€) can be paid to the Vendor (or on occasions to a Lawyer) to secure the property, and a Reservation Agreement signed for the property to be taken off the market.
It is advisable at this stage to apply for an NIE number (foreigner identification number), open a bank account and leave Power of Attorney (if this is required) with your Lawyer before leaving Spain.
Within 30 days of signing the Reservation Agreement, you will need to sign a formal and much more detailed contract. This should include completion dates, inventory, and paperwork anomalies to be resolved prior to completion etc. At this stage you would usually make a payment of 10% (minus the Reservation Fee of 3,000€) of the final purchase price. For example; a property purchase price of 200,000€, 10% is 20,000€, less 3,000€ reservation fee equals 17,000€ to pay.
Upon receipt of this money the Vendor is legally bound to sell it to you at the agreed price and within the agreed timescale. If the Vendor defaults for any reason, then they must pay you back twice the money that you have paid them (in the example used above that would be 40,000€).
The completion and signing of Title Deeds will take place before a Public Notary on a date mutually agreed between Vendor and Buyer, usually within three months from the initial reservation.
The balance of the purchase price is due upon signing the Title Deeds, along with the Lawyer's fees. The Title Deeds must be taken to the Tax Office and Property Land Registry within 30 working days of the signing. Taxes and Notary fees must be paid within the same 30 working days. Most Lawyers will retain all of the tax amounts on the day of signing to pay the taxes on your behalf.
We also strongly advise that you ask your Lawyer to draw up an independent Spanish Will to cover the said property.
An NIE certificate (Certificado de Numero de Identificación de Extranjero) is necessary for the purchase of a property in Spain. However, this cannot be applied for prior to finding a suitable property. This certificate must be applied for in person by the interested party at the Foreign office closest to their proposed property purchase (in our case in Almeria city). It can be obtained via the Embassies/Consulates in the UK, but in reality this process is not ideal and takes a lot longer than applying for it directly in Spain.
Spanish law dictates that every non-resident property owner in Spain must pay an annual income tax regardless of whether you rent your property out. This tax is based on a small percentage of the price of the property. We advise you to appoint a Fiscal Representative to attend to all your legal obligations. There are a number of Lawyers, Accountants, etc. in the area who would be happy to provide this service for a small annual fee.
For simple, intelligent tax planning and information in Spain please visit this UK Goverment website
Every property owner in Spain must pay an annual real estate tax known as IBI to their local Townhall. Your Lawyer will request copies of the receipts for this tax from the previous owner to ensure that it has been paid. Once you have completed the purchase of the property, arrangements can be made for you to pay this tax on a standing order through your local bank. A small additional payment is now required for Basura (rubbish collection), also to the Town Hall and payable annually in the same way as IBI above or every three months.
Before signing your Escritura (Title Deeds) your Lawyer will ensure that there are no outstanding debts on the property for electricity, water, telephone, etc. Again arrangements can be made for you to pay for these services on a standing order through your local bank.
Most properties in Spain form part of an urbanisation in which a community of owners exists and every owner is a participant. The owners are obliged to abide by the Rules and Regulations of the community and to pay their portion of the community expenditure. The importance of a community is to control the organisation and efficiency of the estate. Your lawyer will ensure that previous community charges have been paid prior to your signing for the property.
The community is structured with a President, Committee and Administrator, who are elected annually by the owners. It will be their responsibility to determine annual budgets, costs and whatever improvements will be required by the owners for the benefit of the urbanisation. They will also be available for Annual General Meetings, where owners should be present to express ideas and opinions on the organisation and running of the urbanisation and the community.
The community expenses usually include:
• Community and Administrator costs
• Maintenance and cleaning of the pools and communal areas
• Community lighting
• Gardens and communal areas
• Building insurance
• Satellite TV (optional)
• Water (optional)
You may wish to offset your annual outgoings and provide yourself with an income by letting your property at times when you do not want to use it. Please take a look at our Key Holding Services – PROPERTY MANAGEMENT.
Understand the Spanish property system with our Spanish to English Glossary / Keywords for Buying in Spain, useful legal words and their meanings.
Always ensure you're legally protected - CONVEYANCING and know exactly what you're buying for a nominal fee of 70€+IVA for a Structural Survey - SURVEYING