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Cost of Buying Property

  1. Always hold the hands of someone that you can trust and who has experience in purchasing in the area before.

  2. Seek the advise of a solicitor or gestor. They will check the deeds of the property and make sure the registered owners are, also if there any loans, mortgages or any encubrances on the property.

  3. Once you have found the right property, you will be asked to pay a reservation deposit to avoid the property being sold by another agent or the vendor. The reservation document must show the purchasers and vendors details, the property address and the amount paid, normally 6000 euros. Make sure this payment is refundable subject to: A. a mortgage (if needed) not being granted by a bank or B. the property has title deed complications.

  4. During the the payment of the 6000 euros and 10 to 14 days the solicitor will obtian a Nota Simple and make enquiries at the registry office to confirm the property is legal, names on the title deeds are correct and that if there are any mortgages on the property or the land.

  5. Once everything is confirmed to be correct and the mortgage has been approved (if needed) the balance of 10% of the declared value, less the 6000 euros is paid to the vendors and a legal contract is signed by both parties, with a date to complete, normally within 1 to 3 months after the contract date. After this contract has been signed, if the purchaser backs out of the sale, the vendor can legally keep the 10% paid. If the vendor backs down the purchaser can claim the 10% backand another 10% for expences through a court of law.

  6. An appointment date for completion is agreed by both vendor and purchaser to meet at the notarys office to sign the deeds and pay the balnce of the declared price, The solicitor or bank manager can make the appointment to complete. The declare price in Spain is not always the full asking price and an accepted amount of 70% is often declared. Tax is paid on this figure at 7% and approximatly 1% is paid to the nortarys office and 1/2% goes to the registration office. The 70% declared value is paid in the form of a bankers draft and the balance is paid in cash to the vendor. If you calculate 10% tax to pay on the 70% declared value, you will have some change left. Solicitors charge from1200 euros, to act on your behalf. If a mortgage is needed, I never use a solicitor or gestor as the banks make certain, ownership and title deeds are in order, before they lend you their money. The balance is paid in cash to the vendor. Remember to allow 7% for purchase tax or 7% I.V.A on new builds. Add 16% tax if you are buying a plot of land from a company and 7% on just a private land purchase.