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The buying process
In a typical Spanish sale you’d pay an initial
deposit, usually of around £2,000. You sign a
preliminary contract, the ‘compra venta’, and
pay a proportion of the purchase price of at least
10%. This legally binding contract clearly states
the date of completion. At completion, all the
parties (or their designated representatives)
go to the notario’s – the public official appointed
by the Spanish government to witness the signing
of all legal documents - where the title deeds
(escrituras) are signed. At this point you pay
the balance of the purchase price and all fees
and taxes, including 7% of the purchase price
on new properties or of the declared value on
re sales. Then all transfer taxes and fees are
paid to the tax offices. Next the notary will
register the transfer of ownership at the land
registry. ‘Plus valia’, a tax on any increase
in the value of the land, is levied in some areas.
This registration may take a while; you can ask
for a copy of the records from your notary, it’s
called "copia simple".
Buying costs and taxes
Solicitor’s (abagado) fees are usually 1% of the
purchase price. This includes advice about the
contract, investigation of title, reporting on
enquiry results, arrangement for payment of taxes,
arrangement for completion and registration. Notary
fees are around £200 - £450. Land Registry fee
is around £250. Surveyor’s costs, bank charges
are variable.
When living in Spain
Other costs and taxes may include:
Urbanizacion and Community Fees – covers the running
and maintenance costs of shared facilities such
as gardens and swimming pools. Costs vary considerably.
Local taxes - All non-residents have to pay wealth
tax, ‘Patrimona’. 0.2% is typical.
Property tax – the local town hall charge IBI
(tax Impesto sobre Bienes Inmuebles) on owned
property - an annual real estate tax. This varies.
Insurances – Fire insurance is compulsory by law
when taking out a mortgage. Comprehensive household
insurance is available to protect your home and
contents. Holiday Homes Overseas specialise in
insuring homes abroad; this way you can bypass
local insurers. Otherwise, ask your home insurer
if it offers a deal to insure a property abroad.
Water and electricity – utilities have a standing
charge and are similar to costs in the UK. Tax
on rental income – tax is paid on the declared
income from the property and your rental income
must also be declared to the Inland Revenue in
the UK. Basura – in some areas you will have to
pay the Basura (for rubbish collection) separately,
in other areas it is included in the IBI.
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