Innovative property investments
Investment property in Spain
Buying Guide
Buying Process
New builds: reservation
Having found your dream property, the next step is the reservation.
On new properties this is normally 3,000 EUR to 6,000 EUR and usually non-refundable - no planning permission, no reservation.
New builds: private purchase contract
Then 30 days later the Private Purchase Contract will be signed, which is 20-30% of the purchase price PLUS IVA (VAT at 7% - or 16% for land).
The contract will include a schedule of payments, including an estimated date for signing of public deeds and final payment, and potentially a schedule of delivery dates and penalties for delays.
This is the Point of No Return; changing your mind will mean penalties.
New builds: mortgages and stage payments
The property may already have a mortgage that can be taken over - sounds obvious, but make sure it is a suitable mortgage for you and not just one that suited the developer.
From this point until completion there are just stage payments to take care of but make sure the developer has the payments insured as required by law.
New builds: further checks
When nearing completion, your lawyer will do final checks, such as ensuring the property as a certificado de final de obras (architect's seal of approval) and the licencia de primera ocupación (licence of occupation).
Without them, you won't be approved a mortgage or be connected to utilities.
The lawyer will then check on the nota simple (land registry filing) that there are no embargoes or debts, that the developer has done his job and divided the land into the size and quantity of properties he promised (escritura de division horizontal) and check there are no unpaid taxes.
New builds: signing the deeds
The final step is to sign the deeds before a notary; along with a bank guaranteed cheque that the funds are in place (if a mortgage exists or is required then a representative from the lender must be present).
Everyone signs; the property is then officially yours.
The lawyer then submits deeds to land registry for tax purposes and you can then take possession.
Resales: a similar but quicker process
Resales have a similar process except much shorter.
From Private Purchase Contract to completion may be a question of one to three months, with obviously no stage payments to cushion the financial blow.
Key facts
Resales follow a similar but quicker process to completion as for new builds but with no stage payments. The steps for purchasing a new build are:
- A reservation of a non-refundable 3,000 EUR to 6,000 EUR
- Private Purchase Contract (20-30% of the purchase price PLUS IVA (VAT)), signed 30 days later, detailing payment schedule, delivery dates and penalties for delays
- The stage payments are made and final checks undertaken
- Your lawyer ensures the property as certificado de final de obras (architect's approval); has the licencia de primera ocupación (licence of occupation); has no embargoes or debts (via the nota simple or land registry filing) or unpaid taxes and that the land has been divided up into the size and quantity of properties as promised (escritura de division horizontal)
- Completion: the deeds are signed before a notary (including, where applicable, by a mortgage lender representative) and a bank guaranteed cheque presented
- The lawyer submits the deeds to land registry for tax purposes
- You can take possession
- Check if a mortgage has already been taken out on the property and that it is suitable for you
- Check the developer has the stage payments insured in accordance with the law
Downloadable Reports and Documents
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