THE SPANISH PROPERTY BUYER’S GUIDE 
 
FINDING A PROPERTY
Foreign investment in Spain has become very popular over recent years due to its pleasant, healthy climate and rich culture. Spain now derives more of its foreign income from tourists than any other country in Europe. Due to low European interest rates, it is currently a good time to buy property in Spain.
 
Here at Consulting and Investment Group S.L., we understand the personal needs of each client and
strive to exceed the requirements of each individual. Our main goal is to complete every aspect of the
clients’ desires, not only by selling a property but also providing a new lifestyle.
 
Once you know where you want to live, we suggest you answer the following questions:
 
•   What type of property:  modern apartment, villa, town house or character home?
•   How big does it need to be? How many bedrooms, bathrooms etc.?
•   Do you want a property you need to redecorate or even renovate?
•   Are you looking for something new/old? Furnished?
•   Do you need parking?
•   Do you want a garden and/or swimming pool? Golf?
•   What type of view (if any) would you like?
 
Establish the lifestyle you desire and what facilities attract you the most.  Additionally, a good
agent will assure that they spend plenty of time to get to know you and your special requirements
as well as possible, sharing with you their market knowledge and recent sales.
 
CHOOSING A LAWYER
It is highly recommended, if you are a foreigner or you are not familiar with purchase process, to hire a Spanish and English speaking lawyer to guide you through the process. Lawyer’s Fees are, in general, 1% - 1,5% of the purchase price but it can vary depending on the complexity of the purchase.
 
Having a lawyer, NIE number (a number issued to foreigners in Spain) in place, and valid bank account strengthens a buyer’s position when negotiating as he or she can put down an immediate deposit if an offer is accepted.

MORTGAGE
If a mortgage is required then the company providing the mortgage will conduct an official valuation.
Consulting & Investment Group S.L. understands the banking and financial system in Spain and works with specific banks who offer mortgages to non-residences. As long as the income can be verified, 60% - 90% mortgage can be granted.
 
You can calculate your exact mortgage with our WEB, Mortgage Calculator. 
 
Many developers of new properties are now offering up to 70% over 30 years for non-residents.  Local banks will offer anything up to 60% for European residents.  
 
 NOTARY
The final part is signing the title deeds before a notary, who is a local government official. The lawyer and the head of the notary have checked all documents by this point, before signing the exchange of owner ship.
 
PROPERTY REGISTRATION
The “last step” in property ownership is the property registration.  The layer will then register the details of the new owner in the Spanish property rtegistery.

TAX INFORMATION
 
A. VAT and Stamp Duty
This tax applies only to newly built properties sold for the first time by a developer. The VAT rate for residential properties is 10% of the purchase price. On top of that, an additional 1.5% of the deed’s price has to be added as Stamp Duty.
 
B. Transfer Tax
This tax applies to transactions deemed to be second or ulterior transfers. The rates are different for each autonomous region. In our area, the Junta de Andalucía has fixed them as follows:
 
-  8% for transactions below 400.000 Euros.
-  9% for amounts more than 400.000 Euros but less than 700.000 Euros.
-  10% for amounts exceeding 700.000 Euros.
 
C. Notary and Land Registry Fees
Notary costs depends on the complexity of the deed and the purchase price. It can be estimated to be between 0.5% to 1%  (Land registry Fees may be estimated as 2/3 of the Notary cost).
 
PROPERTY REGISTRATION
The “last step” in property ownership is the property registration.  A private contract of purchase is drawn up wherein the details of the purchase are reflected – the legal description of the property, purchase price, form of payment, date of completion, date of possession, etc.
 
Upon signing the private contract, a payment on account of the purchase price is made which can vary substantially according to the terms of the sale and the date of completion.
 
PRE-CONSTRUCTION RULES
New properties which are unfinished are paid for over the construction period and all payments on account before finishing must be guaranteed by a bank or insurance company.  If the property is not finished by a certain date, a purchaser has the right to reclaim the monies paid, plus legal interests. Additionally, another law obliges the property developer to arrange a ten year insurance policy with respect to any basic building defects with the purchasers as beneficiaries.
 
CALCULATING BUDGET
Here are example costs for a property priced at €200,000 with 80% mortgage:
 
Purchase Price =         200,000
8% Transfer Tax =       16,000
Mortgage Fees =           1,600
Notary Fees =                  900
Registry Fees =                700
                                    _______
TOTAL =                   217,000
 
Mortgage 80% =         160,000
Cash needed =            57,600
 
** Mortgages up to 80% over 20-40 years for around 3% annual interest rate
 
Annual Costs
The local town hall charge IBI which is an annual real estate tax. The previous owner is obliged to give you copies of previous bills. Community fees apply when you buy a property in a community development. These cover things like maintenance, swimming pools, gardens etc.
  
Insurance
Fire insurance is compulsory by law when taking out a mortgage.
Household insurance is available to protect your home and contents.
Life insurance can be taken out to guarantee payment of the loan in the case of death.
 
Utilities
Electricity, Water, Gas, Telephone and internet will be connect to your property by the help of your lawyer. The monthly fees will be taken from your bank account by DIRECT DEBIT.