PolarisWorld Buyers Guide -
How do I buy a spanish apartment, townhouse or a villa in southern spain?

Always use an established real estate agent. This is important to ensure that you get professional advice regarding the purchase process, but also to ensure that you buy a property that is likely to hold its value even if the market goes down, as it did a few years ago. Local markets are very temperamental which means you should look for different real estate agents based in the areas that interest you.

How Do I Buy? To purchase property in Spain is as easy as anywhere else in the world. As it might be different from what you are used to at home, you should always use a lawyer right from the outset. The extra fees incurred are cheap insurance against possible future problems. The following is an example of a standard property purchase procedure. Reservation Agreement Normally the purchase is initiated with a reservation agreement, which takes the property off the market. The deposit to pay at this stage could be anything between 600 Euro - 10% of the purchase price. Normally it is 1% and the agent holds this amount in a client account. Now your lawyer will begin a search of the property, which will show if there are any charges against it. Private or Option? Within a week or two a private agreement or option is signed between the purchaser and seller and at this stage it is normal to pay 10% directly to the seller. The seller and buyer's lawyers, together with the agent, should determine all outstanding debts and rates in order to arrange the payment of these according to the agreement. These could be property tax (I.B.I.), community fees, telephone, electricity, water bills, etc. Title Deed Usually 30 to 45 days after the reservation agreement, the completion takes place in front of a notary, who issues the title deed, or “escritura”. If the purchase is financed with a mortgage the bank representatives are present in order to pay and sign the mortgage. The title deed should then be registered by the lawyer in the corresponding Property register. Notary and Registry The law states that the seller should pay a part of the notary fee and what is known as "plúsvalia municipal". All other costs are to be paid by the buyer. In most sales it is agreed that all costs are paid by the buyer. This is more practical as he will probably remain here and it is likely that the seller may leave the country. The lawyers charge around 1% of the purchase price, but a minimum of 900 Euros. Notary and Registry cost The cost for Notary and registry for a property of: 60.000 is approximately 700 Euros. 150.000 is approximately 1,200 Euros. 300.000 is approximately 1,900 Euros. Plus Valia Municipal This is a council tax that is paid each time a property changes hands. It is complicated to calculate. Basically it depends on the property’s tax value and how long it has been owned by the seller. It usually is approximately between 300 Euros & 1,800 Euros. Transfer TAX or VAT Depending on the party's legal status and the type of the property, there is a 7% transfer tax or 7-16% V.A.T. (I.V.A.). As follows: On first hand homes, you pay 7% V.A.T. + 0,5 % Stamp-duty. On second hand homes, you pay 7% transfer tax. On villa plots from the promoter, you pay 16% V.A.T. + 0,5% Stamp-duty.