How to buy a home in Spain
Which are the steps that I must take if I want to buy a home in Spain?
Preliminary recommendation: First of all, a recommendation for all those who want to buy a home in Spain. The purchase of such a property implies a series of complex decisions and steps, for example the payment of the corresponding taxes or the verification of all legal aspects concerning the operation. By having the support of a real estate agency, you will make sure that every detail receives the required attention and you will avoid the possibility of unpleasant surprises. Some people choose to buy their home by their own means, but we recommend that the buyer use the services of a real estate agency. Among all the arguments in favor, there is a hardly arguable one: the buyer pays absolutely nothing to the real estate agency. We repeat: the services of the real estate agency are free for the buyer. Thus, when selecting our ideal home, what could be better than being accompanied by a personal property finder who does not charge us for his/her services?
Choosing my real state agency
Once we have made the decision to benefit from the expertise of a real estate agency in the process of finding and purchasing our ideal home, we will ask ourselves: what is the best real estate agency in Marbella or the Costa del Sol, for example?
Real estate agencies specializing in an area, with a strong local presence, have the ability to offer their clients a wide variety of options that will meet the required criteria. These agencies have a deep knowledge of the different zones and developments within their area of expertise and can efficiently inform and guide their clients, with considerable savings in time and effort. Alarcon Estates | Coldwell Banker Global Luxury is a real estate agency specialized in the area of the Costa del Sol, including Marbella, Estepona and Benahavis, home of elite urbanizations and areas such as Marbella Golden Mile, Nagüeles, Sierra Blanca, Puerto Banus, La Zagaleta, El Madroñal or Finca Cortesin.
Choosing my ideal home with my real estate Personal Shopper
Browsing through a well organized and informed website provides us with considerable information about the urbanizations and properties available in our area of interest and allows us to pre-select some of them. Now, nothing like a visit to our selected properties. When a buyer comes to Alarcon Estates| Coldwell Banker Global Luxury, we become his/her real estate Personal Shoppers: we select properties according to the desired criteria, we organize tours to several of them, we explain every detail and advise our clients so that they can make their choice with all the information in their hand.
Verifying the legal situation of the property
Before signing any contract, we need to verify that everything is in order from the legal point of view. Only an expert lawyer can certify that all legal aspects have been addressed in an adequate manner and that we can rest perfectly assured of this when acquiring a real estate property. This is one of the benefits of dealing with a real estate agency: all steps are taken through a single interlocutor. Alarcon Estates works with a number of collaborating lawyers based on the Costa del Sol, who accredit a wide professional experience and the fulfillment of the strictest ethical and deontological criteria. Among the lawyer’s work, we highlight the following:
- Obtaining a certificate of the property in the Property Registry. The certificate specifies who owns the property and whether there are any charges on it, such as mortgage loans that have not yet been paid.
- Checking in the town hall that the property has the corresponding building license and habitability certificate.
- Checking that the owner(s) have paid all housing services, such as water and electricity, municipal taxes and community expenses. For this, he will obtain the corresponding certificates and/or invoices.
Obtaining documents and fulfilling requisites to buy a home in Spain
Foreigners who wish to acquire real estate in Spain need to fulfill a series of requirements, which will depend on their legal situation in our country. These procedures can be carried out by the lawyer. We highlight the following:
- Opening a bank account in a Spanish bank.
- Proceedings for obtaining the Foreigners Identification Number (“Número de Identificación de Extranjeros, NIE”), necessary for any legal action in Spain, including the purchase of a home.
- Proceedings for obtaining the residence permit —if necessary— or certificate of non-residence.
- Power of attorney: in case the buyer cannot or does not wish to be present in the fulfillment of legal proceedings, he/she may grant representation power to the lawyer so as to do so on his/her behalf. The lawyers with whom Alarcon Estates | Coldwell Banker Global Luxury collaborates will inform our clients about the steps and the implications of this possibility.
Reserving my ideal home
We have already made our decision regarding the property that we want to acquire and now we want to reserve it. We have two ways of doing this, placing a deposit and signing an earnest money contract (“contrato de arras”). An earnest money contract and a deposit do not have the same implications. Let’s see the difference.
- Placing a deposit: on the Costa del Sol, it is customary that the deposit to reserve a home amounts to €6,000. If the buyer changes his mind and decides not to carry out the transaction, the seller will retain the deposit, as a compensation for the damage caused by the temporary halt of the selling process. In case the seller backs out, he would be obliged to return the signal to the buyer.
- Earnest money contract (“contrato de arras”): When signing an earnest money contract, a deposit is placed as well to reserve the property, but there are two important differences. First, the amount of this deposit is usually 10% of the sale price; second, it not only obliges the buyer to complete the transaction, but also the seller. Moreover, if the seller changes his/her mind and decides not to complete the transaction, he/she will have to give the buyer twice the amount received as a deposit (that is, 20% of the value of the house).
As we can see, an earnest money contract is a more secure way to guarantee the purchase of a property. If we choose to place a deposit, the amount will be lower, but the buyer will find it easier to reverse the sale if, for example, a better offer arises. By signing an earnest money contract, this will be much more difficult. If I have found “the home of my dreams” and I want to make sure that it will be mine, my best option is the signing of an earnest money contract. It should be noted that, in both cases —deposit or earnest money contract— we speak only of amounts delivered on account, which will be deducted from the price of the home at the time of the sale. An earnest money contract does not imply a greater disbursement at the end of the operation.
Preparation of the earnest money contract or delivery of the deposit: the lawyer will be responsible for drafting the corresponding documents, earnest money contract or receipt for the deposit.
Signature before notary
We have reached the decisive moment, the signing before a notary of the deed of sale (in which Alarcon Estates also accompanies all its customers). Our lawyer has previously sent to the notary all relevant information concerning the deed of sale. According to the law, the seller is in principle bound to pay for the costs of granting the deed, while the buyer must pay the expenses of the first copy of this deed. However, the law leaves to the parties the option to agree and distribute these expenses as they wish. In practice, it is customary for the buyer to take responsibility for all the expenses of the notary’s office, which is why he/she usually chooses the notary. In any case, Alarcon Estates provides its clients with a list of the main notaries in the area, with an extensive professional background, so that they can make their choice.
Payment of taxes
Once the purchase has been signed, each part must pay their corresponding taxes. Alarcon Estates | Coldwell Banker Global Luxury, through the specialized lawyers with whom we collaborate, provides its clients with all the necessary advice so that they can rest assured that they have complied with the Spanish Treasury.
When it comes to paying taxes, we have to differentiate between new homes and second-hand ones. In the case of a new home, the buyer has to pay Value Added Tax (VAT), in its reduced modality (10%). In addition, in both cases —new and second-hand homes— the State taxes the signing of legal documents, in this case the purchase deed, and this tax is paid by the buyer. Therefore, the buyer of a home in Spain pays the following taxes:
— New housing
- Value Added Tax (VAT).
- Tax on Documented Legal Acts (“Impuesto sobre Actos Jurídicos Documentados”).
— Second-hand housing
- Tax on Documented Legal Acts, in the modality known as Tax on Onerous Patrimonial Transmissions (“Impuesto de Transmisiones Patrimoniales Onerosas”).
You will find detailed information about these taxes in the section Expenses in the purchase of a house in Spain.
Registration of my home in the property registry
We have already signed the deed of sale of the property. However, it should be noted that contracts signed between the two parties —buyer and seller— have legal effects between them, but for a deed of sale to be valid before third parties, it must be registered in the Land Registry. This procedure can be done by our lawyer. The registration costs are exclusively paid by the buyer and are stipulated by law, according to a scale that will depend on the value of the property.