Congratulations, you have decided to purchase a property in Spain. This is a big decision and many things have to be arranged.
What´s next? Below we explain a number of important things for you.
Finance of Purchase
Prior to the signing of the PPC (Principal Purchase Contract) or making the transfer of a reservation, it is advisable that you have received a Principal Agreement Offer to financing from a lending bank. This gives you the assurance that the loan is guaranteed and avoids delays on completion of the purchase.
Through De Spaanse Hypotheker you have direct access to multiple providers. After our intake interview and analysis of your profile we will go out and look for the mortgage that suits your needs best. It is our absolute priority that this part of the proces is smooth and successful. All this in your own language and the convenience of a single point of contact for all your questions.
Signing of PPC
Once the bank has given the green light for the financing and your lawyer has ensured that all legal documents are in order you can sign the PPC (Principal Purchase Contract), in which all the details of the operation will be laid out.
This is also the moment the 10% payment is done. This amount is determined in agreement with the seller and is part of the purchase price. This payment is non-refundable, so be aware of that all matters are in order prior to the signing of the agreement and making the payment.
Hire a lawyer
Unless you speak Spanish fluently and have experience with the Spanish legal system De Spaanse Hypotheker recommends to contract a lawyer. Thanks to our experience, we have a big netwerk of lawyers and can recommend one when needed.
Requests NIE number
N.I.E. stands for Numero de Extranjeros. For all non-Spaniards (both residents and non-residents) this is an indispensable document. Thinking of buying a home, opening a bank account, a phone contract, any type of insurance, contracting and converting utility contracts, purchase of a a car etc. We will be more thant willing to help yo obtain your NIE number.
Opening bank account and transfer funds for survey
After a Principal Agreement Offer is accepted and agreed with the lending bank, and the PPC is signed, you can transfer the necessary funds to carry out the survey. The account wil be opened at the lending bank or can be transfered into your lawyers escrow ccount. The expences for a survey are approximately 300 – 500 euro, depending on the property.
Costs associated with the purchase of a house in Spain
It is reasonable to calculate aproximately 10% of the purchase price as expences for the puchase.
ITP (Impuesto sobre Transmisones Patriconiales). This transfer tax you pay when you buy an existing House by a private seller. In Andalucia this is 8% of the purchase Price.IVA (Impuesto al Valor Añadido). You pay 10% sales tax on new construction or when purchasing an unregistered home.
AJD (Impuesto sobre Actos Juridicos Documentados). Stamp duty: The tax shall be paid upon signature of a public deed, of notarial documents, registry office documents. The rate applicable differs from one case to another. The cost of the purchase deed will be paid by the buyer and thanks to the new mortgage law the tax for the mortgage deed will be paid for by the lending bank.
This tax must be paid at the Treasury office of the corresponding Autonomous Community within 30 working days after signature of the relevant deed or the contract.
Registration fees. 0.50% – 1% of the purchase price. These are the costs for the inscription of the purchase and the mortgage in the local land registry office.
Fees
Lawyer
A Spanish lawyer charges approximately 1,00% of the purchase price as legal fee.
Notary fees
These costs for the title deed are paid for by the buyer. The rate is based on the purchase price. Take into account an amount between 0.5% and 1% of the purchase price. If you take out a mortgage deed, the lending bank will pay for the expences of the mortgage deed and Stamp Duty related to the mortgage.
Agency fees
When you contract a real estate agent to find a property, the commission will vary between 2,50% and 5% of the purchase price.
Mortgage fee
Spanish banks usually charge a 1,00% study fee of the mortgage amount an opening commission.
Survey / Valuation fee
The lending bank will require to carry out a valuation. This expence will be for the buyer and will cost approximately between 300 – 500 euros.
Setting date for passing the deed at the notary
After the lawyer has prepared the paperwork, the purchase contract is signed, the bank has approved the mortgage application and the necessary funds are transferred to your Spanish bank account, you can make an appointment at the notary to sign the title- and mortgage deed.
Congratulations! You now officially own your dream home!
Suggestion: For the mortgage application to flow smoothly, we recommend you consult a mortgage broker. He will take a lot of work out of your hands, avoid pitfalls and you can enjoy your Spanish property carefree.