BUYING A HOUSE IN SPAIN
Buying a house in Spain can be a time consuming and stressful journey, because every country is different. Looking for a house in Spain is not the same as looking for a house in The Netherlands, Belgium or United Kingdom.
Below you´ll be provided with a complete explanation of the process of searching, buying and owning a home; and we will mostly focus on the northern Costa Blanca, which is where we mainly operate.
SEARCHING FOR A HOME
Every country has its own important protals, such as RightMove in the UK, Funda in The Netherlands and Immoweb in Belgium, which are usually the ones with the most complete and accurate information. In Spain, we also have multiple portals, where you can start your journey, as this is where most people and agencies post their houses.
If you decide to look on a portal, here you have what we consider the top 3 in Spain:
These portals are all very useful to get a general idea of the prices of the homes, but for the final decision, we recommend to work directly with an estate agent, because portals have some downsides such as:
- You may often see the exact same property with different info, photos and prices because multiple agencies post their available properties on it. Don´t get too confused and find yourself an estate agent in the area to help you with your needs.
- Sometimes there are out-dated properties on portals that have already been sold.
- You don´t get all the info regarding the house such as the location or address, which makes it hard to locate the zone of the house. We recommend you get in touch with an estate agent and arrange a meeting to visit the home.
You finally managed to get through the process of searching for a home, you have decided what type of home you want, where you want it and how much you´re looking to pay for it.
Time to get the buying process going! We recommend you find an estate agent that fits your needs and that you can trust. Then this agent in question will assist you with the whole process from start to finish.
The agent knows the area, the market, the procedures and has a local network that makes it possible to find the best options for you.
Assistance finding and buying a home won´t cost you anything, so why do it yourself instead of reaching out to a professional?
If you´re looking for a home at the Costa Blanca, HERE you have a complete selection of properties in every area that we mainly operate in, such as Moraira, Javea, Benissa, Benitachell and Calpe.
Once you have found the home you are interested in, the negotiation process can get started. Now it´s time to take your agent´s advise on the correct market value of the home and the negotiation strategy, even if at the end of the day, it´s up to you, what you believe is a right price and what you think is acceptable.
At this stage of the process, or possibly before that, it is also time to make contact with a lawyer or a gestor. Both of them perform the same activities in principle, but we always advise not to save on quality and to opt for a lawyer. Unlike in the Netherlands or Belgium, a lawyer is indispensable when buying a house in Spain. This is mainly because the notary plays only a minor role in Spain. Still a crucial one. He witnesses the signing of the deed of sale after he has established who owns it and has checked the identity of the parties. But that is it. He does not investigate the house for, for example, outstanding debts, mortgages or seizures. Even the registration in the property register does not fall under the duties of the notary. These are matters that a lawyer takes on.
Once agreement has been reached on the price and any other conditions, a reservation contract will be drawn up first. This is a short contract with which buyer and seller confirm immediately after price agreement that they have reached an agreement. The buyer is asked to pay a reservation fee as a deposit, which is usually between € 3,000 and € 6,000. The seller undertakes to remove the property from the sale and not to start new negotiations. The reservation contract also stipulates a period within which the purchase contract must be signed. The buyer has time to do his research (or have it done) in the specified period and the content of the more extensive purchase contract is discussed. This is usually 2 to 3 weeks.
Unlike in the Netherlands or Belgium, reservations for financing (Guidelines for Mortgages in Spain) and building inspection are not common. These are generally not accepted as a reason for a free cancellation of the reservation contract. It is of course possible to have a Building Technical Inspection carried out. We can help you with this.
Your lawyer or gestor carries out the necessary investigation into the home. He requests information from the land register and the property register (which are two different authorities in Spain), from the municipality, from the tax authorities and from the utility companies. A common problem is that the current owners have built things up over time that have never been registered with the Land Registry and / or property register. A lawyer will discover this and advise you to ask the seller to register things before the transfer takes place. Usually registration is quite possible and this does not have to stand in the way of the purchase. This phase of the process will also be used to prepare for your upcoming status as a homeowner in Spain. You will need to apply for a NIE and open a bank account. In both cases your lawyer will be able to assist you. Find more info about NIE on this article.
The purchase contract must usually be signed within 2 to 3 weeks after signing the reservation contract. The purchase contract must describe all conditions that have been part of the agreement. When signing the purchase contract, the buyer must immediately make a deposit of 10% (minus the previously paid reservation fee).
On the agreed date, all parties appear before the notary, selected by the buyer. You will be accompanied by your buying agent and your lawyer. If necessary, the deed will be reviewed and explained. With your lawyer you have also prepared the payments that are still made in Spain with the help of checks. After signing, checks and keys are exchanged and you are the new owner of the house!
In addition to the agreed purchase price, you must take into account a surcharge of approximately 12% to 13% of Additional Costs (including 10% transfer tax and 2% to 3% for notary, registration fees and lawyer). For new construction, an additional 1.5% tax is added (stamp duty) and sometimes the costs for connection to water and electricity are charged separately. When taking out a Mortgage, one-off costs are also charged for mortgage tax, opening costs at the bank, notary fees and costs for the mortgage advice.
During ownership there are various costs that you should take into account every year:
- IBI. This is comparable to the property tax or a municipal property tax.
- Rental value fixed. This is paid through the income tax.
- Basura (waste tax).
- Gas water and light.
- Property, fire and building insurance.
- Maintenance of swimming pool and garden (private or through service costs).
Buying a house in Spain naturally also entails responsibilities. After transport at the notary you are responsible for paying local taxes, contracts with utilities and maintenance. Your lawyer will assist you with registering with the municipality and transferring contracts for gas, water and electricity. With regard to the maintenance of gardens and swimming pools, for example, there are numerous companies available that can offer their services. We are happy to help you further with this.
The Costa Blanca is a very popular location for tourists (and with good reason!), Renting out your property during the holiday periods is therefore a realistic option. For example, buying a house in Spain could result in a sustainable investment with a long-term return. An extensive infrastructure is available with regard to the rental of holiday homes. You can make a choice from outsourcing a number of services in which you yourself remain closely involved with the rental (and thus of course save on management costs), or for total outsourcing. You need a Registration number for the rental. You can request this yourself or have it run through your gestor.