Legal Guide To Buying A Property In The Costa Del Sol

Purchasing Your Property in Spain

This Buyers Guide aims to help and guide you through the entire purchasing process so as to ensure that you buy safely and follow the correct procedures.

Step 1: Finding the Property

Once you have chosen the property that best suits your requirements, the Selling Agents provide you with a reservation document for you to sign in which all the terms of the agreement are set out. Together with the signature of this document, you will need to leave a deposit which will vary depending on the selected property.

This is to officially take the property off the market and acts as an intent to purchase.

At this point we would highly recommend that you appoint an independent Law Firm to represent you in the purchase, this will make the whole process much easier and less stressful for you.

Step 2: Instructing a Lawyer

The Lawyer will carry out all the necessary legal procedures of the purchasing process, including:

  • Determining who the owner of the property is to verify that the vendor is entitled to sell the property.

  • Checking that the property is legally registered in the corresponding property registry.

  • Checking that the property is free from charges & debts (mortgages, seizures, etc.)

  • Checking that the property has been granted the corresponding municipal building permit by the town hall.

  • Ensuring that the legal prescriptions of the planning and building law are complied with. – The study and signing (if required) of private contracts (examples: reservation agreement, purchase contract, etc.) or public ones (example: public deed) which are deemed necessary to execute the purchase operation.

  • The normal procedure is to sign a private purchase contract first, and after a reasonable lapse of time, to sign the public deed.

The Lawyer will then proceed to pay all the expenses and taxes arising out of the purchase on your behalf. This includes registering the public deed in the corresponding Land Registry.

Simultaneously the Lawyer will effect when applicable, the change in ownership of all bills, any taxes concerning the property, and if you wish, arrange the direct debiting of those bills from your Spanish Bank account.

Once the Lawyers have finished their legal checks, the next step would be either:

  • Exchange of contracts (if applicable): Go to Step 3.

  • Completion: Jump to Step 4.

Step 3: Exchange of Contracts

Exchanging contracts is a legally binding stage of the property buying process.

Once contracts have been signed and exchanged you are legally bound to buy the property and the seller is legally bound to sell it to you.

This will depend on the chosen property, but the exchange of contracts is usually accompanied by a payment of 20%.

Step 4: Completion - You get your keys!

On completion day, your Lawyer will arrange for the agreed amount to be transferred and the deeds will be signed.

Completion can be done in person at the Notary, however if you cannot be in Spain you can also give your lawyer “Power of Attorney” to sign on your behalf. You can them move into your new home!

Purchasing Costs

The purchase costs are approximately between 12-14% of the purchase price and the exact amount will depend on various aspects of the purchase.

Fees & Taxes

Approximate Breakdown of Fees & Taxes

  • Government Transfer Tax (IVA): 10%

  • Legal Fees: 1% (may vary depending on law firm and services offered).

  • Notary & Registry Fees: 1%

  • Mortgage Fees (if applicable): 1-2% (may vary depending on the type of mortgage).

In addition to the fees associated with buying a property, you should also take into account the running costs.

Property Running Costs

  1. IBI (local annual property tax).

  2. Basura (waste disposal tax).

  3. Comunidad (community fees).

  4. Garden and pool maintenance in case of an independent villa.

  5. Building insurance.

  6. Utility bills (electricity, gas, water, internet, etc.) Annual running costs usually are around 2-4% of the cost of a property.

    We would encourage you to contact us at LT Construction for any help you may need before and after your purchase we can offer advice and costs on any changes you may wish to make to the property.