As in any foreign country, the procedure is very different to that of the U.K., but we have tried to keep it simple in this step-by-step, rough guide. Please remember that this is not definitive and we recommend the use of a fully qualified, Spanish lawyer for your property conveyancing needs.

1) RESERVATION FEE.  Once you have chosen the property you want to buy, we will accept the Reservation Fee of 3.000 - 4.000 depending on the property type. This secures the property for a period of two weeks and takes us to the next step:-

2) SEARCHES IN THE LAND REGISTRY. A search is made to establish who is the owner of the property and to check whether there are any debts, liens or encumbrances, e.g. unpaid mortgages etc. and that everything about the property is legal and correct. If this is so, then-

3) CONTRACT OF OPTION TO PURCHASE. On instruction to proceed, a draft contract is prepared between the buyer and the seller by the lawyer. This establishes the price and the conditions of the sale, including an agreed date to exchange contracts that is, make the final payment and take possession. At this stage a good-faith payment is made of 10% of the total purchase price. (The reservation fee is part of this10%) This sum is non-returnable, which is why the searches have to be correct and clear.

4) COSTS AND TAXES.  The costs and taxes generally add up to about 10% of the purchase price, and are divided as follows:-

  • Property Transfer Tax amounts to 7% of the value stated on the Title Deeds.
  • VAT is applied to new properties at a similar rate of 7%.
  • Notary Fees. These generally amount to about 1% of the purchase price.
  • Lawyer's Fees. Similarly, this will amount to about 1% of the purchase price.
  • 'Plus Valia' Tax. This is a small fee levied by the Town Hall on any increase in the rateable value.
  • Other costs. To register the property in the Town Hall costs 0.5% of the Title Deed value, as does the Stamp duty, also 0.5%.

5) COMMUNITY FEES, RATES, ELECTRICITY BILL ETC. Before the final signing of the title deeds, a check will be made to ensure that all the bills are up-to-date.

6) FISCAL IDENTIFICATION NUMBER. When you buy a property in Spain, you are required to have this in order to make any payments to the Town Hall of Tax Office. This is done for you by your lawyer.

7) TITLE DEEDS. The new Title Deeds will be signed in front of the Notary. By custom, it may be expected that some of the final payment may be made in cash, the rest in a Bankers' Draft. The buyers whose names will be on the new title as the Owners have to be there in person unless Power of Attorney is given to your Lawyer to sign on your behalf. On payment, the new Deed is signed by both parties and the Notary, the keys are handed over and you have possession of your new property.

Following these steps will ensure that you will avoid the pitfalls that you sometimes see on alarmist British TV programmes. Many of these problems occur because buyers either take shortcuts or buy through unlicensed agents therefore, be sure to use Mallorca Hot Property's services, enjoy your Dream Home in the Sun - and avoid any nightmares!

THIS INFORMATION  IS FOR GENERAL INFORMATION PURPOSES ONLY AND MALLORCA HOT PROPERTY ACCEPTS NO RESPONSIBILITY FOR ANY MISUNDERSTANDING OF SPANISH CONVEYANCING

 

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