Buying
"Off plan" properties
Many new properties in Spain are sold 'off plan' which means that the developer may not have started the construction or the building process may be in the very early stages.
If you decide to purchase a property 'off plan', payment will usually be made by stage payments, and the amounts will vary from developer to developer.
To reserve a new property you will normally be required to pay a €3,000 Reservation Deposit in order to take it off the market. A Reservation Contract will be issued giving brief details of the property, the price and the payment terms. It is normal in Spain for the Lawyer to ask for 50% of their fee at the outset of this process.
In addition to the purchase price there is also a 7% tax payable on all re-sale properties, paid on completion.
Approximate purchasing costs for new or re-sale properties are:-
| IVA (vat) | 7% |
| Stamp duty | 1% |
| Lawyer | 1-1.5% |
| AJD & ITP tax | 1% |
| Notary | 600€ |
| Land registration | 600€ |
| A Spanish will | 150€ each |
Land Registry
All property in Spain is registered here and details are stored of who owns the property, the exact size of the property, and if there are any mortgages, etc. on it. Only the people named on the Title Deed have the right to sell the property.
If you require a mortgage the extra costs in total amount to an additional 2%
Taxation
Spain has long been associated with tax evasion and its famous cash economy. This culture is now changing and it is imperative that you have an understanding of Spanish taxation, double taxation benefits and wealth taxes.