Cost of buying property in Spain

To cover all necessary costs in buying a property in Spain you need to allow an extra 13% on top of the purchase price. These costs are listed below as a guide:

Stamp duty is charged at either, 10% of the purchase price OR 10% of the rateable value multiplied by 3.7 – whichever is the higher figure.

10% stamp duty

1% Notary fee

1% Registry fee

.05% Legal/other

PRICE NEGOTIATION AND MAKING AN OFFER

As with anywhere in the world, most property prices are negotiable. Once you have found a property you wish to purchase you should then discuss with 123 Javea Villas an offer you want to put forward. This offer will be liaised between the Agent selling the property and the Vendor. 123 Javea Villas have their clients’ best interests in mind and will negotiate hard to achieve the best price.

RESERVING THE PROPERTY

Once a purchase price has been agreed a reservation fee has to be paid. This is usually between 3,000€ and 6,000€ and is held by the acting Estate Agent. This fee is non-refundable if you decide not to proceed. The property is taken off the market for three weeks and is unavailable to other prospective purchasers while a contract is drawn up. If there is anything suspect about the property which was not discovered in the original searches, whether legally or physically, you will be recommended not to proceed and the reservation fee is refunded in full.

NIE NUMBER

This is an identity number for Foreigners (numero de Identificacion de Extranjeros). This is needed in order to buy/sell a property; to open a bank account; to apply for a mortgage; to set up utility connections; to insure a property; to buy/insure/register a car or boat; to work or start a business. We can obtain this for you.

APPOINTING A LAWYER OR LEGAL REPRESENTATIVE 

Before signing anything or paying any deposits you should appoint an Abogado who speaks your language. He is a lawyer who will safeguard your financial interests, generally for a fee of 0.5% of the purchase price, plus VAT (IVA). This is not prohibitive because in return you will have peace of mind.

We can recommend law firms specialising in house purchase and who are multi-lingual. To avoid a conflict of interest you should NEVER use the same lawyer as the Vendor.

The procedures relating to land and property registration are unique to Spain. By using professionals you will avoid the majority of problems and have peace of mind.

PURCHASE CONTRACT

This will be drawn up by your lawyer, but you and your lawyer must ensure that all negotiated items are included. Include every detail in the offer that has been agreed between you and the vendor verbally, including such things as furniture, garden furniture and accessories. The contract should include the following negotiated items:

The purchase price

The method of payment and currency.

The fixtures and fittings

The furniture itemised in an inventory which should be drawn up and signed by both yourself and the vendor.

All of the taxes due and which party is liable for which tax.

The contract should also state that the property is sold free of all debts (including mortgages), collateral and embargoes; that all bills are paid up to date and that the listed items of household equipment are in working order.

Your lawyer will also check:

The Plan Parcial (which shows all the plots) to check if the property is on an Urbanization and that it is legal and registered with the Town Hall;

For plans of any new roads and developments in the area;

That the vendor has the final Escritura Publica (the title deeds). If not, you should rethink about going any further.

That IBI (rates) receipts are up to date;

A certification of valuation (Referencia Catastral); the number should be on the IBI receipts.

To make sure all community fees are paid up to date;

To ensure electricity, water and telephone bills are paid;

That rubbish collection fees are paid. These are usually charged as part of the IBI fees but in Javea they are charged separately. If not paid they are subject to additional fines and surcharges.

When your lawyer has written and endorsed this private contract you must then deposit 10% of the purchase price, which will be forwarded by your lawyer to the Vendor’s lawyer. Only when this is done and both parties have completed and signed the contract does the private contract become legally binding. Your deposit is now non-refundable and the Vendor is bound to sell you the property at the agreed price. The rights of both parties involved are secured. This is an impartial system and works extremely well. The contract will specify the completion date and the penalty for not completing in time. This is usually loss of your deposit.