Before you decide on the property you wish to purchase, you should have already have organized the following procedures.

      1.       Appointed a Lawyer

      2.       Opened a Spanish Bank Account

      3.       Applied for a mortgage if required

Once you have had your offer accepted, the following procedures are then put into place.

      1.  You will be requested to sign a property reservation contract which is signed by the buyer and the seller in which the buyer pays 3000 euros. This money is paid to reserve the property that you want to buy and the seller will not sell to anyone else. At this time also a date for completion is required for both parties. 

      2.  2 weeks after making your reserve contract you will be required to pay 10% of the whole property price minus the 3000 euros already paid from the reserve contract. On paying this deposit you will sign the Sales Contract (Compreventa). Your lawyer would have checked the properties Title Deeds (Escritura) and Nota Simple to ensure that the property is of course legal and free of any debts. This deposit is not refundable and these monies would be paid to the seller, however is the seller defaults he would have to pay the buyer double the money. 

      3.  Your lawyer will now prepare the new deeds (escritura) for the property at the Notary Office ready for your completion date (as set out in the reserve contract), this could take from between 3 to 8 weeks.

It is very important that both the buyer and the seller are aware of the completion dates as any delays in the procedure could cost the buyer or the seller compensation fines from the Notary Office.

GUIDE TO COSTS INVOLVED IN PURCHASING A PROPERTY

Resale properties            Transfer Tax (ITP) is charged at 7% of the purchase price

New construction           Value Added Tax (IVA) is 7% of the purchase price and 0.5% Stamp Duty is required

Added Value Tax (Plusvalia) is a land tax which is calculated on the increased value from the last sale. This is usually paid by the seller, but it can be stipulated that the purchaser pay some or part of this money, you will need your lawyer to negotiate this for you. 

Taking into consideration the above taxes plus and your lawyer fees, it is advisable as a rough guide allow about 10% of the property price as your extra costs.