•

Buying A House In Spain

When you buy a property in Spain, you will face a number of associated costs such as a valuation for mortgage purposes, legal fees, stamp duty, etc. Your largest additional costs are likely to come in the form of tax. If you are buying a house from a private individual, the Impuesto de Transferencia de Propiedad - a property transfer tax - will be charged at seven percent of the purchase price. In this case, you should allow for approximately an extra 10 percent over and above the purchase price to meet all additional costs. If you buy a house from a developer, you should allow for total additional costs of around 12 percent, as higher taxes are levied when you buy property from a developer.

Before you go house hunting, it's advisable to:

Get an N.I.E. - your "Foreigner Identification Number". This is a tax reference number for foreigners. You need an N.I.E before you can lawfully carry out any transaction in Spain that has tax implications, such as buying a house or even opening a bank account. Most Comisaria/national (not local) police stations have a foreigners department where you can get the necessary forms. It takes two to six weeks for you N.I.E. to be issued. (You also need an N.I.E. if you want to apply for residence. Becoming a resident can be useful as it allows you to pay less capital gains tax if you sell your property at a profit.) N.I.E. forms can also be obtained from Spanish consulates in the UK. It is recommended that you carry out the process in the UK rather than in Spain. Although it is more expensive to do it this way, you will almost certainly find it is handled more efficiently.
Get an English speaking legal representative - a solicitor - to act on your behalf. Ask other British property owners for their recommendations.

After you have found a property you want to buy, the main steps you need to take are:

Your legal representative needs to check the property registry to ensure that the person selling the property in fact owns it.
If you need a mortgage, your lender will almost certainly require a valuation of the property from one of their approved third party valuers.
The property registry will also show whether there is any mortgage outstanding on the property. Unlike in the UK, mortgages in Spain can be passed on with the property.
Your legal representative will draw up the compra venta - an initial contract to purchase the property - and, at this stage you will normally pay a deposit of around five to fifteen percent of the purchase price. Most sellers will ask you for a deposit of at least 10 percent.
If, after signing the compra ventra, you default on the purchase, you lose your deposit. If the seller defaults on the sale, the seller must pay you double the deposit.
After you have paid for the property in full, you will be given an escritura - a public deed of conveyance. The escritura requires a public notary to confirm that the property transfer is lawful and that transaction taxes have been paid. The notary witnesses the signatures of the seller and buyer on the documents.