What are the purchase costs for buyers and sellers?
On average, the cost of buying a property in Spain will be in the region of 12% to 15% of the purchase price depending on the purchase price, the complexity of the procedure and the area of Spain in which you are buying.
The notary – 800 euros – The notary charges a standardised fee which varies according to the amount of land, the size of the property and its declared purchase value.
The registry fee – 300 to 700 euros – The inscription of the property in your name in the official property register
The transfer tax – 10% of the declared purchase value
If you purchase a new property from a developer, this tax will be value added tax at 10%.
The document fee – 0.5% to 1% of the declared property value – This is equivalent to stamp duty and is currently 0.5% of the declared property value.
Your lawyer – approximately 1% of the property value. The lawyer will charge you around 1% of the value of the transaction, unless there are some unusual complications. You should ask for a quote.
The tax deposit on sale – 3% of the declared purchase value. If you are buying from someone not resident in Spain, you will deposit 3% of the total purchase price at the tax office in the seller’s name as a guarantee against his future tax liabilities. You pay the seller 97% of the price, and pay the other 3% directly to the tax office. This serves as a guarantee against the non-resident seller’s various Spanish tax liabilities.
What are annual costs ?
Council tax known as suma is paid annually and depends on areas and the value of the property. Typically this amount is much lower in the area where we work than the coast. Many customers comment that the annual tax is similar to one months tax in the uk.
There is also a very small charge for rubbish collection, typically 60 euros
What are sales taxes.
Residents will pay taxes in the following years tax declaration. Non residents will leave a deposit of 3% of the purchase price to cover potential taxes. This will be discounted from the purchase price so that the buyer can pay it, ensuring that it is done.
The municipal tax – In the Sax area this tends to be very low, although on the coast it can range between 10% to 40% of the increase in value of the property. This municipal tax is on the increase in the value of the property since its last sale. It is called ‘plus valia’ and can vary from 10% to 40% of the annual increase, depending on the length of time between sales and the town in which the property is located. I have not ever known this to be greater than 500 euros on a country property.
How do I know that I am not inheriting debts of the seller ?
One of the first documents that your lawyer will request is a ‘nota simple’ from the land registry which will identify any registered debts. A property may have a mortgage, so once identified we can arrange fir the cancellation of the debt prior to purchase. The seller will pay all costs associated with this.
Smaller non registered debts such as utilities and community fees will be checked manually with individual providers.
How can I reserve a property ?
Once your solicitor is happy with the paperwork, a deposit contract of 10% of the purchase price would be drawn up including all conditions agreed in negotiations of purchase. ie price, timescale for completion. It also identifies all parties to the contract and the actual property. If the owners needs to update anything before sale this will also be documented. Once signed by buyers and sellers the contract is then validated with a bank transfer to the sellers account.
What do I need to do once I’ve found a house and the offer is accepted ?
Quite often purchasers are here a limited amount of time so its important to use it constructively.
First open a bank account… We can help. Make sure you bring your national insurance number with you. Also some bank statements, wage slips and passport.
Appoint a solicitor. You may have been recommended one. If not look for one, or we can put you in touch with several local English speaking options.
Prepare for NIE number. Let us try and arrange an appointment. The waiting list is long. We will give you a date, if you cant make it back, then give us authorisation to get it for you. We will need some personal details, copy of passport, and a photo.
These three things are initially very important if you wish to buy, once these are in place your solicitor and us will get things moving.
How do I send my money to Spain ?
For clients who do not have money already in euros, we will also put you in touch with a currency exchange company to get an account set up. They will make the process easy, and save you some money.
What happens if the seller pulls out ?
Once the deposit is paid, if they fail to complete any of the clauses in the contract they are obliged to return double the deposit. For this reason we urge the deposit to be paid as soon as possible once the paperwork is confirmed as be satisfactory.
How long will the purchase take ?
Typically a fast purchase is 1 month, and normal 3 months. This timescale is normally agreed at the negotiation stage. If you are in a rush and a property is empty often 1 month is possible if you have your nie and money ready.
What is Nie ?
This is a number which is normally issued by the national police and registers you with the tax office. It is needed to purchase and pay your purchase taxes. We can help you if you are purchasing with us. Often there is a waiting list of 2 or three months, so its important to move this forward.
We will advise you of the process
How do I become resident ?
This can be done after purchase or applied for when you apply for the Nie. For residency they will require evidence that you are in financial good shape, and you have medical cover.
Does the property need an energy certificate before purchase can go ahead ?
Yes the buyer must provide one
Does the property need a habitation or second occupation licence ?
In the towns these licences are required to change mains water. The licence should be applied for by you, not the previous owner, as it needs to be in your name to change the utilities. These are very easy to obtain unless the property is not fit to live in.
In the countryside you don’t need this to change the water supply if it is not drinking water. Some solicitors ask for this document, however normally it has no real purpose if drinking water is not available, and electric is connected. For this reason some town halls such as Villena will not even issue the document.
This does not affect the rights to live in your property. Your house should be registered in the property registry as ‘vivienda’ (dwelling) and with catastro and the council tax office. If this is the case you will be able to live in your house without problem.
What is Padron ?
After purchase you should register at the town hall. They give you a certificate which will be needed for various things, ie registering at a medical centre and buying a car.
How do I get utilities in my name ?
As long as utilities are connected we will help set up direct debits ensuring continuation of service.
Sometimes certificates will need to be applied for which we will help you with. Normally in properties within the town an occupation certificate is required. Typically 300-400 euros covers this process.
If utilities are not connected, we can help you with that however the cost is different depending on each case. Both electrical and plumbing installations may need improvements and certifications in order for reconnection to take place.
Do I have community fees, and how do I pay them ?
Typically in apartments and urbanisations there is a community charge that you should pay. We can tell you how much this is, and arrange a direct debit
Is the property connected to the main sewers
In the town along with your water bill you will pay for mains sewerage. Country properties normally have their own system. A tank, or a soak away. Many old properties have the non environmental friendly soak aways. It is possible to change these for a modern day, compliant solution for as little as 2000 euros.
How do I empty my septic tank ?
We can call a company for you who will come and empty the septic tank.
Do I have mains gas ?
In the town mains gas is becoming more common, however in the countryside you will need bottled gas. To have a valid contract and valid insurance you will need to pay for periodic inspections, and update rubber hoses.
Are there good medical services ?
In Sax, Elda and Petrer there are 24 hour medical centres. The hospital at Elda is very good. There are some English speaking nurses and doctors. If you are not covered by social security you should have private medical cover, or pay voluntary contributions for medical care. This in my opinion is the best as it is cheap, and the cover does not underwrite against pre existing conditions.
Do I need an alarm ?
Serious Crime in this area is much lower than the coast. However fitting an alarm provides peace if mind whilst leaving a property un-attended, or indeed whilst youare living there. These days any where in the world you need to be careful, however this area is very safe.
Are bank repossessions a good buy ?
Typically these properties have been trashed, have had utilities unpaid and cut off, and taxes and communities un- paid. The banks will want you to make a rapid commitment and the sales process will be only one month. After which time the bank will not be interested in resolving problems.
For the experienced purchaser and investor with contingency funds for problems these properties sometime can be good value. Other times however what initially appears cheap turns out to be very expensive. Extreme caution and experience is recommended.
We do not sell them due to the masses of problems that can and do arise.
Do you know tradesmen who can help ?
After 14 years we have built up a good group of professional tradesmen who can help with all aspects of reforms, fixes and improvements. As a paid service we can also oversee building works on your behalf.
What do I do with all of my olives or crops. Some people are happy for a local farmer to take over the crop maintenance and harvest, and keep the plot in good condition. Some other clients like to harvest themselves, which involves joining the co-operative. This is very rewarding. We have contacts to help you along the way.
Is house insurance needed ?
We recommend that you fully insure your property and can help you get quotes. As a paid service we can handle claims