Many people are dreaming of having a second home in Spain. It’s beautiful landscapes, amazing cuisine, rich culture and warm weather has always been the reason why most of us get so attracted to Spain.
Buying a property can become a complex procedure if you don’t know where to start. Our agency specialises on helping expats finding their perfect home so the purchase process goes nice and easy. In this article we would like to share the information on how the procedure looks and what taxes to pay.
Where should I search?
There are several real estate web-sites where you can search for properties, one of them is Idealista. Most of the ads are announced by agencies, so you’ll see very few directly from owners. The process of contacting the agencies will be challenging as first of all not everyone speaks English and secondly they are pretty slow when it comes to scheduling the viewings. Want to see something the same day? Just forget about it and try to be patient. “Mañana” is not a myth.
If you are not willing to go through this stress or just have no time, another way to look for a place is to hire a personal shopper who will do everything for you, you’ll just need to come to the right place at a right time or to ask them to do a video tour if you are not in Spain. Delonix Agency will be happy to help you with that.
I found a place, now what?
Step 1. Make an offer
Let’s say you found a property of your dreams but it’s a bit out of your budget or you believe its market price is lower than advertised. Depending on the price, you can usually negotiate up to 5-10% of the sum. In order to make an offer you would usually be asked to make a reservation of 1%. Imagine the agency previously mentioned your offer might be accepted but you need to do the reservation to confirm your seriousness, what you need to do in this case is to write a letter by email mentioning the desired price and explaining why you believe it’s a fair amount, sign the document the agency gives you and make a transfer. Then wait for the owner to answer, usually less than a week.
Before making any payment for a pre-owned home we recommend asking the agency to provide with documents confirming the building had passed technical inspection and there are no major damages to the building, also that the actual owner doesn’t owe anything to comunidad (neighbours community).
Step 2. Arras
Okay, your offer got confirmed. Now the agency will prepare the Arras contract, it’s a private contract between owner and you where clear sale conditions and timeframes are stated and where you confirm your willingness to buy the property paying 10% of the total price, the owner on the other had confirms their willingness to sell it to you on the day agreed in this document. In case one of you decide to not proceed with the deal for personal reason, the client looses 10% and the owner has to return the client what he paid + another 10%.
Step 3. Notary
So all went well, and now you need to sign the deal, to finally get your keys. If you don’t know any notary, the agency will offer you one or two so you can choose.
If you don’t use a mortgage, before coming to the notary you will need to request a check in your bank for the rest of the sum you need to pay, the payment must be done via Spanish bank and only. When signing the deal, you are expected to bring the check and pay notary fees. Notary fees range approximately from 0.1% of the declared price of a property (400,000+ euros) to around 0.4% (for properties < 100,000 euros). If you use a mortgage then you will have to pay Notary fees on the mortgage deeds as well.
And of course you’ll need to pay Taxes. In Catalonia these are:
- 10% VAT – if you buy a brand new property
- 10% ITP (Property Transfer Tax)- if you buy a pre-owned property (5% if you are under 33 y.o. and it’s your first home)
- 500-700 euro register fee if you buy a land
Step 4. You are the owner
Congrats! You finally got the keys and now became the owner of your dream house. “Do I need to pay anything else?”. The answer is yes. Get ready to pay IBI (the property tax) every year, community fees, and your regular water, gas and power bills. And of course mortgage if you got one.
As you can see the process is not that complicated but can be a bit stressful for someone who is not familiar with the Spanish Law. Luckily we can take your stress away, contact us if you are looking to buy, sell or rent your property in Barcelona. 😉