Buying a property in Spain proceeds differently than in Belgium. For example, if you are buying a property on the Costa Blanca wish to buy, you will need to arrange a number of formalities. This article discusses the buying process of a property in Costa Blanca step by step.
Consider additional costs when buying property in Spain
Often, additional costs besides the purchase price are forgotten. Thus, there are several costs when buying a property in Spain.
First, there are Spanish taxes on the purchase of a second residence. This is like Belgian registration duties on the purchase of a property. There are also notary and registration fees. You also need to transfer electricity and water contracts. Finally, there are the fees of lawyers or solicitors.
An example: if you want to buy a holiday home in Alicante at a price of 160,000 euros, you can make the following cost estimate.
- Notary and land registry fees: between €1,000-€2,000.
- Water and electricity contracts: between €100 - €600.
- Registration fee: €16,000 (10%)
For new-build properties or a purchase on plan, there are no registration fees. However, in these situations, you will pay 10% VAT and a stamp duty of 1.50% on the purchase price. So new construction projects tend to be more expensive.
In general, there will be 12,50% - 15% on the purchase price at. There are also additional costs if you are going to borrow in Spain.
Read more about additional taxes and fees.
Here are the four steps to apply for a Spanish mortgage.
You have found a property in Spain
Once you have found an ideal property, the estate agent or seller will ask you for a contrato de reserva sign. You will then pay a deposit/first down payment of €3,000 to €10,000 to take the property off the market. If you later change your mind, and no longer wish to buy the property, you will lose the deposit.
Read more about the reservation contract and the first deposit.
Therefore, it is important to have legal support and have the necessary caveats and resolutive conditions put in your contract. If there are then (serious) defects in the property, you can recover the first deposit. Common defects are: building violations, the seller cannot sell, there are debts on the property or urbanisation. If it is a sale on plan, we often see that no bank guarantee is requested. Therefore, allow sufficient time to have the property legally examined.
Important: the buying process is different for new builds or buy on plan.
Find legal support
The notary in Spain does not have the same duties as the Belgian notary. The notary in Spain does not give advice and does not inspect the property. Legal guidance is needed to ensure a smooth and safe transfer of ownership and to examine the property for possible charges and debts.
In addition, it is important to have a lawyer or legal expert look after your interests and draft or review your contracts. You can also give power of attorney to your counsel to handle all formalities, including obtaining an NIE number or representation before the notary.
Find out more about the job of a lawyer in Spain.
Apply for a NIE number
During the legal investigation, you will have time to apply for a NIE number. An NIE number is a personal identification number for non-residents in Spain. This document is necessary to buy a property in Spain. The NIE number is also needed to pay non-residents' taxes or later import a car.
You can apply for a NIE number at the local Spanish police station using form EX-15. Another option is to apply for the NIE number at the Spanish consulate in Brussels or Amsterdam. Allow around two months for this. We can also apply for a NIE number for you with a notarised power of attorney.
Read more about how to apply for a NIE number.
Sign the compromise
Following a positive legal examination of the property in Spain, the contrato privado de compraventa signed. This contract is similar to the compromise. You will pay an advance from 10% within 10 days of signing. You pay the remaining amount within 2 to 4 weeks. It is perfectly possible for you to impose some further obligations on the seller, such as regularisation of a building violation.
Note: It often happens that the reservation contract is skipped and one proceeds immediately to the signing of the compromise. We advise against this because it leaves you with no guarantees about the legal condition of the property.
Using a concrete case, we explain why it is best not to sign the compromise immediately.
Need a Spanish bank account?
The final payment of the purchase should be made through a Spanish bank account. This can be our office's Spanish third-party account or your own Spanish bank account. Your own Spanish bank account is usually only advisable if the local utility companies do not accept direct debits from a Belgian or Dutch account.
Here you can find more information on the Cost of a Spanish bank account and when a Spanish bank account required is.
To the notary
After signing the compromise and opening a Spanish bank account, the effective sale is concluded before the notary. You will receive the keys to the property and a provisional deed on the spot, the copia simple. You will receive the official notarised deed by post later.
Tip: before going to the notary, it is usual to visit the property again and check for visible defects.
Registration of your property in the land register
After you have been to the notary, your property titles should be registered in the property register and land register. This way, you safeguard your property rights against third parties. Note that the notary in Spain will not do this for you.
Are you considering buying a second residence in Spain? Or have you questions about buying Spanish property? Then subscribe to our newsletter or feel free to contact us.
