Guide to Purchase a Property
Purchase of property in Spain might result being a difficult task for a foreigner. That’s why we always recommend you to request assistance of a lawyer as no one will instruct you better than a professional.
BLUE ESTATES, offers assistance of attorneys specialized in the real estate area, who can consult you in your native language, resolve your questions and provide you with the best consulting services that you didn’t have any problems when buying residential property in Spain.
In continuation we offer you a guide of steps and recommendations that you should take into consideration when buying property in Spain:
GUIDE BLUE ESTATES. PURCHASE OF PROPERTY IN SPAIN
A). EXISTING PROPERTY
To describe the process of purchase of existing property we recommend to get to know the area, urbanization and the town where you want to buy it. In Blue Estates we’ll give you all the necessary information about the areas. It is important to decide the maximum budget that you’ll possess for making a purchase because we need to understand the type and the class of housing that we can offer you (villa, apartment etc.)
Location and orientation of a property are essential elements when you start the search. Other factors as proximity to the beach, golf course are also factors that will influence you final decision.
Existing properties are often situated in the centre of the towns like Marbella, though we have to deal with the fact that they are quite older.
When the price range, location and the type of a property are decided, we can start our search.
On our web www.blue-estates.com you can find a large catalog of existing properties and in case the website database has none, we’ll find it for you from other sources.
Once you’ve decided the price, location and the type of the property you want – make an appointment with one of our agents to visit the houses or apartments you´ve picked.
A visit to properties will be realized with one of our agents who will explain and give you all the necessary information about them.
When we talk about existing property, it is important to have the information about its antiquity, maintenance costs, service charges, land value tax (LVT), selling conditions i.e. if it’s sold in the same condition as it was seen (with or without furniture), if it’s necessary to make redecoration, full renovation or refurbishment of the real estate apart from all the juridical information which is always available in our office with Abbreviated Information Documents according to the Decree 218/2005 from October, 11.
B). NEW PROPERTY OR IN CONSTRUCTION
In case you decide to buy a property in construction or when it starts soon, besides the price, type and location it´s important to know that purchase of this kind of property may last up to 24 months (depending on the stage of construction) to be able to move in.
Our agents will inform you about all the characteristics of the properties you’ve chosen, especially when it´s going to be constructed from scratch. Normally property developers in Marbella have a pilot house where you can see how it will look like once it´s finished and furnished (as an example), its construction quality, space, bedrooms, living-room, bathrooms and kitchen.
BLUE ESTATES agents will inform you about all the services of new projects and properties in detail, e.g. forecasted maintenance expenses and annual taxes.
The main characteristic of buying property in construction is the process of payment which is carried out the next way:
1º Payments in the process of construction
2º Payment when signing the Notary Deed
Legal information about properties in construction is always available for you in our office.
In BLUE ESTATES we choose the best real estate projects in Marbella and as attorneys we assure you that we will carry out all the legal guarantees.
BLUE ESTATES provides you with professionals for selling luxury villas in Marbella. Our clients confide in our education, professionalism and 20 year old experience. We work hard to materialize your projects, that’s why we always say that our clients are our best asset.
С). BUYING LAND FOR BUILDING A VILLA IN MARBELLA
Purchase of land for construction of a villa or developing a real estate project in Marbella requires specific legal and professional consultation before starting, in the process of construction and up to obtaining the first occupancy license. For this you’ll have to count on the advice of experienced attorneys and architects who will help you to develop the project you want.
In BLUE ESTATES there are attorneys and architects who will carry out the whole project up to the end.
For more information contact us at email@example.com, we’ll be glad to help you!
2º DEPOSIT WHEN BUYING A PROPERTY
When you’ve chosen a property that you want to buy, you will have to clarify at BLUE ESTATES the process of formalization of the deposit document to reserve the property and take it off the market.
The deposit can vary depending on the type of a property and its price. Normally deposit amount varies from €3.000 to €10.000 for properties which cost up to €250.000 and 5% of the selling price of properties with higher price.
Legally, deposit has a function of a pre-contract as a demonstration of the next step – Purchase and Sale contract.
At BLUE ESTATES we recommend to formalize deposit document when you decide to buy property in Spain as a guarantee that someone won´t buy it before you.
After deposit process is finished you will have to sign a Purchase and Sale Contract.
Our attorneys at BLUE ESTATES will edit your Purchase and Sale Contract with all the legal guarantees.
In Spain a Purchase and Sales Contract is a document of mutual obligations of both parties, where one party – the buyer is obliged to pay a stipulated price and the other party – the seller – to prepare a property which is the object of the contract.
A Purchase and sales Contract there should state all the personal data, private circumstances of buyers and sellers, detailed description of the property, its registration information; all the community payments and taxes paid, that the property has no difficulties as debts, mortgage or tenants; as any other analogical circumstances as the terms of property´s transfer, building specifications, form of payment, state of property at the moment of transferring, furniture and equipment specification description etc.
The moment the Purchase and Sales Contract is signed; the payment amount will be between 20-30% of the selling price and the rest of the payment will be made at the moment of signing the Notary Deed.
The Notary Deed is a Purchase and Sales Contract between the parties of the seller and the buyer with the intervention of a notary. To sign the Notary Deed you will have to count on the juridical consultation of an attorney because it requires filling a lot of documents; signing of these documents comply with Purchase and Sale norms of a property.
In case you are a foreigner who wants to buy property in Spain, we recommend you to make a power-of-attorney for your lawyer to let this person carry our all kinds of formalities like receiving and applying for different documents when you aren’t in Spain etc.
5º TAX AND OTHER EXPENSES
Buying property in Spain is subject to tax expenses. To calculate the amount to be spent on Purchase of an existing property we normally estimate 14% of the selling price and 10% – for new property.
The taxes that are charged for buying an existing property are:
1. Asset Transfer Tax
From 0 € to 400.000 € ………….. 8%
From 400.000 € to 700.000 € ……..….. 9%
From 700.000 € and over ………….……. 10 %
2. Stamp Duty Land Tax
3. Value Added Tax (VAT)
For purchase of a new property only Value Added Tax (VAT) is to be paid.
Property registry expenses
Banking or mortgage expenses if applicable.
Attorney commercial fees: Approximately 1% of housing selling price.
In case of professional intervention in the proceedings in court, other fees would be charged.
After formalizing the Notary Deed and paying taxes the Notary Deed should be brought to the Register of Real Property to make a record of a new owner´s data.
The inscription expenses in the Register of Real Property depend on the price of property.
After your property is recorded in the Register of Real Property, the purchase process of a property is over.
Congratulations! Now you are the owner of your own property in Spain!
The annual taxes you have to pay are:
– (LVT) LAND VALUE TAX. This tax is paid to the municipality of the town and will depend on the property´s rateable value. In this rateable value, there will be an applied percentage established by law. It is paid once a year but sometimes the amount is divided into two payments.
– NON-RESIDENT INCOME TAX is a tax paid to the State, when a non-resident person owns a property in Spain.
Rateable value is the value determined for a particular property by the State. It has nothing to do with the purchase price, but its value serves as a base to calculate the tax amount to pay.
E.g.: Mr. NS is the owner of a villa in Marbella that he has bought for €1.000.000. The rateable value of this villa can be half of its selling price i.e. €500000.
To calculate Non-Resident Tax payment we should:
– apply 1,1-2% to the rateable value of the property
– apply 24% to the result
The final result is the amount to be paid as the Non-Resident Tax.
In BLUE ESTATES we have attorneys who can consult you about the annual Non-Resident Tax payment.
DOCUMENTATION NECESSARY FOR BUYING PROPERTY IN SPAIN
NIE (Tax Identification Number of a foreigner)
Is a personal identification number of a foreigner in Spain. It is obligatory for buying a property in Spain. It’s possible to obtain it when you come to Spain or in Diplomatic and Consulate offices of Spain in your country of residence.
Documentation necessary to apply for NIE:
Form (EX-15), properly filled-in and signed by the applicant.
Original and full copy of valid passport, ID card, travel document or registration certificate.
Documents, demonstrating economical, professional or social causes of applying for NIE.
To apply with the help of a representative, a power of attorney is necessary.
Opening a bank account in Spain.
Making a power of attorney for your representative.