It is imperative that a buyer takes into consideration from the outset, the full closing costs involved in the purchase of a property. These are as follows:
- 1 % (approx) Notary & Property Registry fees – both fees are fixed by an official scale dependent on the price and size of the property or plot.
- Transfer Tax (ITP) on resale property (villas, town houses, apartments, plots, commercial premises & garages sold with the property)
- 0-400.000 = 8%
- 400.000 – 700.000 = 9%
- 700.000 -> = 10%
- 10% VAT (IVA) on a brand new property purchased from a developer (villas, town houses, apartments, plots, commercial premises & garages sold with the property)
- Plots & commercial premises are liable to pay 21% VAT (IVA) when the transaction is made between two companies)
- 1% Stamp Duty
- 1% Lawyer fees
Once we have helped our client to find the right property we will proceed to put their offer to the seller and draw up a detailed “reservation document”. This is a recognized legal document and safeguards the interests of both the buyer and the seller, giving that additional guarantee of true intent of purchase.
- This document is signed by both the vendor and the purchaser (or their respective lawyers who have the relevant power of attorney) and Crown Estates. At this stage the buyer will be asked to hand over a deposit which is worked out in accordance to the value of the property (usually between 6.000 to 20.000 Euros).
- This deposit will be held in the Crown Estates escrow account and the amount will go towards payment of a 10 % deposit of the total sale price. This is payable by the buyer at the next official step in the purchase procedure – the signature of a private contract. The seller’s lawyer will draw this up.
- The buyer’s lawyer will go through the contents of the contract before signature to ensure that it fully protects the buyer’s interests. Said contract defines the closing date to complete the transaction before a Public Notary (usually 30 days, but can be less if the seller and buyer have the respective documentation and funds to hand). It also reflects the fact that the buyer has paid a 10% non-returnable deposit of the total purchase price to the seller at time of signature.
- In the intervening period, the seller will assemble all the legally required documentation, that must be presented at the final signature of the title deeds. The seller’s lawyer will draw up the final sales contract. The buyer’s lawyer will go through the proposed terms of said contract, check that the property in question is free of all debts and encumbrances, and that it fully complies with Spanish property legislation.
- On the date of expiry specified in the private contract, the final sales contract will be signed in front of a Public Notary by both the seller and the buyer (or by their respective lawyers with valid power of attorney). The balance of the agreed selling price will be paid to the seller.
- The new ownership will be registered by the buyer’s lawyer in the Land Registry Office. The buyer’s lawyer will do the necessary paperwork so that all utility bills and local taxes are transferred to the new owner’s name and help to set up direct debit payment where relevant.