Understanding the buying process and the costs of buying your Spanish home

The process for buying Spanish property is uncomplicated, so if you take some time to understand the order in which things happen, and the additional costs before you start of the process of buying a property, hopefully you'll be able to avoid any unexpected expenses.

When preparing your budget for the purchase of a property in Spain, it´s important to consider the total expenditure that will be needed to secure your new home and when you will be expected to pay.

Once you have found your perfect property in Spain and negotiated the sale price with the estate agent, you will be required to sign a reservation contract. This commits both buyer and seller to complete the sale. You will be asked to pay a reservation deposit to secure the property at the price agreed between you and the seller. This is depending on the agreement but ranges from 3.000 € up to 6.000 and 10% of the purchase price on signing of contract 15 days time is normal. All advance payments will be deducted from the final sale price upon completion.

The Número de Identidad de Extranjero (NIE)

If you have not done so already, you will need to apply for a Spanish fiscal identification number known as an NIE. You cannot buy a property in Spain without an NIE, and we can apply for an NIE on your behalf even if you are not physically present in Spain.

If a property is to be registered jointly, each person will require their own NIE.

You will also need a bank account in Spain. Applying for a bank account is relatively straight forward and requiring only your residential address, your tax ID from the country you pay tax, and a valid passport to prove your identity.

You will need to appoint a Spanish lawyer who specialises in conveyancing work. Your advisor will work on your behalf to ensure that the essential paperwork is in order, that there are no debts secured on the property, that all appropriate permissions are present, and that everything is in place to allow the sale to proceed without complications either now or in the future.

We can recommend a company who are fully registered and most importantly for the lawyers are registered to the colegio abogados

The costs of appointing an advisor to administer your property purchase in Spain varies, but expect to pay around 1.500€-1.800€ for conveyancing fees.

Your advisor will arrange a date for completion of the sale that is suited to both buyer and seller. This meeting usually takes place around 4-6 weeks after the purchase price has been agreed, but it can be sooner or later depending on the individual circumstances of the sale.

The appointment will be arranged at a Notary´s office with both buyer and seller and their representative. In case you are not able to travel and attend the notary appointment, it is advisable to have provide a power of attorney to your lawyer who will then represent and act in your behalf.This also enables them to apply and collect your NIE number/s.

It is at this point that you will be asked to provide the remaining funds to cover the purchase price of the property, either in the form of an electronic bank transfer or in bank draft. In either case, the funds must be transferred in Euro´s and usually payment in other currencies cannot be accepted. Again we can put you in contact with a fully legal and registered to the Bank of Spain money FX company.

As a buyer, you will need to pay a purchase tax called IPT, or Transfer tax. This is paid to the Spanish Tax Office (Agencia Tributaria) subsequent to completion and amounts to 10% of the property´s purchase price in Valencia region and 8% in Murcia. Other regions in Spain vary from 5% to 12% of the purchase price.

Notary

Notary is a registered legal representative of the Spanish government and operates independently of your interests.

The Notary oversees the completion transaction between you and the seller, ensures that the balance of the purchase price and taxes are paid in full, and manages the signing of the deeds (the escritura). Notary fees vary depending on the purchase price of the property, but typically cost from €1500 to €2,700. for the more expensive properties.

Once the contract has been concluded the Notary registers your property with the Spanish Land Registry (Registro Catastral) in the new owners name(s). There is a fee payable for registration which is generally half the cost of the fee charged by the Notary.

As a rule of thumb, allow an additional 12.5-15% above the agreed purchase price to cover additional expenses associated with the purchase of a property in Spain.

• Conveyancing costs, approximately €1500 plus tax
• Obtaining an NIE, around €200 per person
• Property Transfer tax, 10% of the agreed purchase price in Alicante region and 8% for Murcia
• Notary fees, from €1200 to €2,800
• Property registration fees, about half the cost of Notary fees
• And sometimes a Power of attorney is the simplest way to conduct the transaction and costs around 250€ no longer is a POA from outside of Spain acceptable to obtain NIE numbers.

Costs will differ for new build properties and first registration costs 1.5-2% depending on region, and if you intend to apply for a mortgage you will incur some additional costs also.