Buyer’s Guide
THE MARBELLA PROPERTY CONSULTANTS GUIDE
1. THE BUYING PROCESS
The process of buying a property in Spain is surprisingly easy and straight forward. MPC will guide you through the process and can liaise with your legal representative to ensure a speedy and secure process.
2. RESERVATION
The first thing when you have found the property you want is to take it off the market, whilst your lawyer makes all the necessary legal checks. This prevents anyone else attempting to buy the property. This is done by placing a €6,000 deposit with your lawyer or into our client account. A reservation form is completed with the standard information and signed by you and the owner of the property. This form agrees the price and the time scale for the purchase. The deposit is fully refundable should any legal or other problems be discovered during the due diligence process. The €6,000 becomes part of the purchase funds for PPC or completion.
3. IDENTIFICATION AND PAYMENT
At this time you will need to provide a copy of your passport, evidence of your home address, details of your legal representative and payment (MPC recommends that the €6,000 be placed with your legal representative).
4. DUE DILIGENCE
Due diligence checks all legal aspects of the property and also checks for any and all debts on a property. The vendor has to pay off all debts, bills, loans etc. before completion can take place.
5. NIE NUMBER
The buyer will then need to obtain an NIE (fiscal number). This is normally done by the buyers legal representative.
6. PPC/EXCHANGE OF CONTRACTS
The next step after the due diligence process is to go to PPC or Private Purchase Contract if applicable. This is standardly used for a resale property or off plan property. This is similar to the UK “exchange of contracts”. Here the lawyers of both parties agree on the identity of both buyer and vendor, show proof that the vendor can legally sell the property, proof that the property is correctly registered with the town hall and the dimensions of the building and land is correct, the date for completion and hand over of keys and agree the terms and conditions of the purchase. This is not done until after a full due diligence report and if a mortgage is required, an offer for a mortgage has been made.
6. PPC/EXCHANGE OF CONTRACTS
The next step after the due diligence process is to go to PPC or Private Purchase Contract if applicable. This is standardly used for a resale property or off plan property. This is similar to the UK “exchange of contracts”. Here the lawyers of both parties agree on the identity of both buyer and vendor, show proof that the vendor can legally sell the property, proof that the property is correctly registered with the town hall and the dimensions of the building and land is correct, the date for completion and hand over of keys and agree the terms and conditions of the purchase. This is not done until after a full due diligence report and if a mortgage is required, an offer for a mortgage has been made.
7. COMPLETION
Completion is done in a Notary office where both parties come (or their legal representatives) and the legal documents and correct provision of funds are checked by a Notary. It is from this point that the buyer assumes all rights and responsibilities to the property.
It is highly recommended that a buyer signs a Power of Attorney for the buying and selling of property with their lawyer. This means the lawyer can sign all forms and deal with all things required for the buyer without the buyer having to be there themselves.
After completion the lawyer then arranges for utilities to be put into buyers name and turned on (a POA will be required for this). A Spanish bank account is required for the payment of utilities as these have to paid by direct debit.
8. ANTI-MONEY LAUNDERING
You will be requested to complete an anti – money laundering form. This is a legal requirement in Spain and across the world for all estate agents. This form asks questions to ascertain the correct identity of the person intending to purchase and the source of the funds used to buy the property.
9. MARBELLA PROPERTY CONSULTANTS
Marbella Property Consultants are fully compliant with all laws and systems in Spain and the E.U. to prevent malfeasance.
BUYING COSTS AND OTHER REQUIREMENTS
1. TAXES
The government and the local authorities have charges that have to be paid on completion. Buying costs in Spain vary from around 10.5% – 13.5% depending on whether a new property or resale property is being purchased. Costs can be higher for properties under €200,000 due to fixed charges.
2. TAX THRESHOLDS
The purchase tax for a resale property is 8% of all value below €400,000, 9% for all between €400,000 – €700,000 and 10% over €700,000. Purchases over €400,000 only pay the higher tax on the difference between thresholds.
3. NEW PROPERTY
A new property, off plan, or a property not sold before pays a flat 10% IVA.
4. NOTARY
The notary charges 1% of the purchase price for all transactions and has a fixed lower fee.
5. LAWYERS
Lawyers in Spain charge 1% of the purchase price and also have a fixed lower fee.
6. STAMP DUTY (APPLICABLE ONLY TO NEW PROPERTIES)
The local authority charges a fee for the registration of a new property of around 1.5%.
7. MORTGAGES
Mortgage costs are additional and should be discussed with the provider or MPC.
