This is merely a recommendation to prospective clients about buying property in Spain and also as an indicator of the costs involved in purchasing property here in Spain. This is by no means exhaustive and only here to give you a flavour of the whole process.  If you require the full do’s and don’ts we normally talk through this after viewing a few properties or prior to purchase but presumably now you have got to this stage you have obviously been looking via the internet, talking to friends and reading various publications and have chosen some particular areas that might be of interest.

We suggest that the best way of buying your home in Spain is to complete a shortlist of areas that you think will be of interest, book a flight and car and then go exploring these areas ensuring that you stop at least a few days and nights in each area so that you get a feel for the town or village, take in the atmosphere, talk to other homeowners etc.

In Salobrena we have an excellent hotel which is relatively inexpensive, central  and satisfied many of our clients with 100% customer satisfaction – please take a look at Hotel San Juan.

Prior to buying you will need to set up a bank account, we can recommend local English speaking banks in the area.  It is favourable to do this locally in whatever area you intend buying in as banks offer a very personal service similar to what you would find in the UK 30 years ago.

You will be required to obtain an NIE number – this is a non residence fiscal identification number which you will need in order to purchase a property. Normally the person who is dealing with the conveyance will attend to that on your behalf.  This involves a visit to the local police office which has a foreigner department. For Salobrena and surrounding area this is in Motril.

There are a number of estate agents that say you do not require a professional conveyance lawyer. DO NOT believe them for your own security so appoint a local lawyer to the area you are buying a property in – we can recommend Lawyers or "gestors" (a gestor is similar to a conveyance lawyer in the UK but usually also deals with tax issues, accountancy and wills) but make sure they come with good references – only too often the lawyer is working for the agent and not on your behalf.  All of the people we recommend are 100% honest and are working on your behalf and not ours.

Often when you hear of stories regarding a “bad” sale it is usually because the buyer has tried to cut corners and save money by not using the services of a gestor/lawyer. A lawyer provides legal guarantees that the property being purchased is free of debt. In Spain a debt remains attached to the property and not the vendor – it is therefore paramount that you hire a lawyer to make sure that a clean title is being transferred to yourself and that no debt is attached to the property. All of this is necessary to ensure a clean title deed is being transferred (e.g. taxes, community charges, unpaid service bills, mortgage etc). For this service expect to pay a minimum of €1,200 or 1% of the purchase price – whichever is greater.

When you have found the property you wish to buy, it is at this stage that you require the services of a lawyer/gestor to do the necessary checks. It is also at this stage that you put down a reservation deposit (subject to satisfactory mortgage offer, a survey if required and mutual agreement from both vendor and buyer of a completion date). This can range from a few thousand euros to a 10% deposit so make sure you have finances in place to secure a property – Salobrena homes ask for a €3,000 reservation deposit upon acceptance of a formal offer.

The person dealing with the conveyance on your behalf will be given all the relevant details of the property. They will apply for an up to date “Nota Simple” – this is an extract from the title deed and confirms the owners’ name, a brief description of the property, its location and the square meterage of the property. 

Once  your lawyer is satisfied that his enquiries regarding the property are correct he will then commit both purchaser and vendor to a private contract (contracto privado de compraventa). This document is legally binding and contains the full details of the property including the agreed offer to purchase and date for final completion at the Notary office. From the day the private contract is signed, your lawyer will confirm that all outstanding mortgages, debts etc will be paid prior to attending the public Notary.

It is usual for the purchaser to pay a 10% deposit of the purchase price upon signing of this document. If for whatever reason you pull out of the sale or fail to complete, you will lose your 10% deposit, however if the vendor decides to pull out you will receive your 10% back plus an additional 10% in compensation (contrato de arras).

It is Spanish law that all private contracts are written in Spanish. 

A public Notary is usually a senior lawyer of which all property transactions pass before to confirm their validity. The role of the notary is to guarantee the legality of the sale, to certify the presence of all the papers and people required by law to be present in any property deal, to ensure that property buyers or sellers who do not speak Spanish have a representative with them to translate proceedings, and generally to preside over the signing of the property sales contract and to register the new deeds. If a Spanish bank is involved in the property deal, then the bank representative also attends the meeting to confirm the mortgage which is also signed in front of the notary. Both, the property buyer and vendor (or their legal representatives) must attend the signing of the contract.

Notary Fees

You are generally expected to pay half of the Notary fees – as a general rule of thumb this is about 0.2% of the declared value of the property. The fee is calculated on the amount of land, the status of the mortgage, the size of the property and of course the properties value which is being registered on the new title deed – this fee HAS to be paid at the Notary on the day of signing.

Registration Fees

The cost of registering the property is roughly half that of the Notary fees – you are expected to pay for these.

Legal Fees

This is usually 1% of the purchase price however there is usually a minimum charge of €1,200.

You might have also heard of “Plusvalía” – this is a fee paid by the vendor and not the buyer – it is similar to capital gains tax and is a tax on the increase in the value of the land the property sits on since the last ownership.

Capital Gains Tax

The changes to Capital Gains Tax that came into effect January 2007 is not such good news for long term property owners who purchased before December 31st 1986, as a reduction factor of which was applied in some cases meant no CGT was paid at all.
This total exception was annulled in January 2006 and now long term owners must pay. Their original reduction is still in force; therefore, they will only pay for the percentage of profits gained after January 2006. Nevertheless, they must pay something.

There is good news for non resident property owners as CGT is reduced from 35% to 18% as from January 2007. These cuts were in response to the EU that the rate of 35% discriminated against non resident EU members, as residents were only paying 15%.

The fiscal retention for CGT is also reduced from 5% to 3% for non resident property sales.

Residents now pay 18% increased from 15%, this will cover income from capital assets and interest on bank accounts and profits from stocks and shares.

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