COSTS OF BUYING A PROPERTY IN SPAIN

People buying a property in Spain should have a lawyer. It seems obvious, yet it is surprising how many British people try to save cost by not doing it, when they would never consider not doing so at home. As well as looking after your interests on the purchase of the property, they also handle other bits of bureaucracy that arise both before and after the purchase. They make easy and stress-free things that can otherwise seem a bit daunting and may well involve queueing outside government offices. (With the added risk of spending a long time waiting in the wrong queue!). Their charges are usually reasonable.

BUYING THE PROPERTY:

Your lawyer will ensure that clean title and proper deeds ("escritura") are obtained and that there are no outstanding debts against the property. Mortgages, for example, are usually cleared on the day the deeds are signed, the bank sends a representative to collect the balance owed and produce the paperwork for cancelling the mortgage. Notwithstanding the occasional horror story that gets into the press, problems are rare. Many rural properties do not have deeds, as Spaniards often bought and sold between themselves with private contracts or inherited property without declaring it. In these cases, our lawyer gets down to work, to ensure that the buyers get proper deeds, a process that can take a couple of months. The lawyer co-ordinates with the notary for preparing deeds in your name - the notary being an official of the State. His job is to check the name of the sellers and buyers and that they are correct on the deeds, check the contents of the deeds, read out the deeds to the buyer and seller before signing, advise both parties of their legal obligations and certify that the deeds have been signed and the money paid. As most British people do not speak Spanish, an interpreter is necessary - and what often happens is that the notary gives the buyer a draft of the deeds for translation by the interpreter before actually formally entering the notary's office. The process is quite simple - but it is also a pain! The notary's offices are often packed so there is a lot of hanging around. Buyers frankly tend to be in a bit of a daze, crowds of people, lots going on that they don't understand, sign here/sign there - and it is a relief when it is all over and they can go off with the sellers - and me - and have a drink and some tapas. But the buyers should have a lawyer!
Despite reports to the contrary, it remains an almost universal practice to put a price in the deeds which is lower than the real one - which is, of course, why the tax is so high!

PAYING FOR THE PROPERTY:

On resales, the normal is a 10% deposit on the day that the purchase contract is signed and the balance of 90% on the day that the deeds are signed.
On new property, payments are staged:  so much on signing the contract, so much at different stages during building and so much on satisfactory completion. Subject to any clauses to the contrary in the contract, the deposit is lost if the buyer does not complete - and the seller must return to the buyer double the deposit if he does not complete.

REGISTERING THE PROPERTY:

Your lawyer will take the deeds for registering at the appropriate Property Registry.
Registration can take anything from a couple of weeks to some months, depending on which Property Registry. On the day of signing the deeds, or more likely the day after,  your lawyer can give you a copy. When you get the "proper" deeds back from the Property Registry, you will find them to be impressive looking bound documents, covered in stamps.

EXPENSES:

Lawyer:  Might charge anything from about € 500 up to about one or two percent of the value of the property. The lawyer we recommend, if clients ask us to, charges a flat € 600. She will do all the legal work in connection with the purchase and will also get the electricity, water and rates in your name, get your NIE numbers (identification number for foreigners), arrange your Spanish wills (recommended that you do a will covering your assets in Spain) - and a host of other things that come up before and after purchase.
Notary: Cost fixed by official scale, depending on various factors but will often be between € 300 and € 800.
Transfer Tax:  If you buy from a private seller, as opposed to a developer, there is a transfer tax of 7% on the value shown in the deeds, payable at the Property Registry. In theory, this is on the full amount of the transaction, but in reality the sellers will usually either not sell on this basis or they will put the price up. Despite reports to the contrary, this remains an almost universal practice - and, of course, that is why the tax is so high.
Property Registry Fee:  Apart from the transfer tax, a fee must be paid at the Property Registry. It is often similar to the amount charged by the notary.
Land Tax:  This is a tax on the notional increase since the previous sale in the value of the land on which the property sits. It can vary considerably, but is usually small - and frequently ends up not being paid.

OVERALL COST:

If you add everything up, the total expenses will often come to about 7% of what you actually paid for a property - but it is better to be on the safe side and think of 10%.

     ALL IN ALL, THE PROCESS OF BUYING A PROPERTY IN SPAIN IS SIMPLE  AND USUALLY QUITE RAPID

VILLAGE HOUSES, FARM HOUSES (CORTIJOS),  CAVE HOUSES, NEW HOUSES,
LAND, ESTATES (FINCAS) IN JAEN, ALMERIA, GRANADA.