1 / The Reservation Contract

Reservation contract between the seller and the buyer to take a property off the market

and pay a reservation deposit between 6.000€ and 10.000€ depending on the value of the property. This reservation deposit can be paid to the estate agency or to your solicitor's account.

2 / Checks before signing a Buyer-Seller agreement: 10 to 15 days after the reservation contract

1.         Who owns the property

2.         Registration in the land register

3.         Properties free of fees and charges

4.         Town planning and municipal rules

5.         Preparation and signing of the purchase-sale agreement with a payment of 10% of the purchase price (10% minus the reserve paid previously)

3 / Notarial act and possession: 3 to 6 weeks after signing the purchase-sale agreement

Signing of the deed of purchase and sale before a notary. At this stage you pay the balance of the payment to the seller and take possession of the property. Congratulations, you are the new owner.

TAXES and EXPENSES

- 7% transfer tax

- Notary fees: Notary fees depend on the nature of the purchase and the number of pages contained in the deed of sale. All notaries charge the same fees for the same concept. They vary from 600€ to 2,800€. You get an advantageous price for being a Parapar client if the signing takes place with our associated notary.

- Land Registry fees: between 50% and 70% of the notary fees.

NOTE: In the case of a purchase with a mortgage, notary and land registry fees will be applied and stamp duty of 1.5% will also be applicable on the amount of the loan.

- Legal Fees (optional) 0,8 % of the property price +21% VAT: minimum 1500€ +21% VAT

Also included in these fees are:

1.         Power of Attorney: You can establish a power of attorney in favor of Lawyer Cristóbal Díaz Jiménez or if you prefer myself Xavier Sierra Lacam to act on your behalf in Spain during the purchase procedure. This power of attorney allows us to sign all necessary documents on your behalf. The cost is approximately 100€, but FREE with Parapar. We recommend this approach, which is much more convenient for you and for us.

2.         Obtaining the NIE if necessary: Tax number needed to buy in Spain, open a bank account, etc.

3.         Changes of ownership with: municipality, homeowner association, water, gas and electricity suppliers. 

Other costs to be taken into account after the purchase

Income tax

If the property is not rented, the tax payable is obtained by applying 1.1% of the cadastral value and then 19% on this amount if you are an EU resident or 24% if you are not an EU resident. The cadastral value is normally lower than the price that appears on the property deed, look at the IBI receipt.

            Example: for a property with a cadastral value of 100.000€ you have to pay 100.000 x 1,1% = 1100€ x 19%= 209€ to pay. 

If the property is rented out, the rate is 19% if you are an EU resident and 24% if you are not an EU resident and is applied on the net income, rental income minus deductible expenses (co-ownership, insurance, mortgage interest, municipal tax (IBI) and rubbish, maintenance, cleaning, lawyers' fees, 3% annual depreciation). These costs are only deductible for EU nationals who must provide a certificate of tax residence issued by their country's authorities.

Wealth tax

For residents on their worldwide assets and for non-residents with assets over 700,000€ in Spain, tax between 0.2 and 2.5%. If resident in Spain, the worldwide wealth is taken into account and a deduction of 300,000€ is applied for the main residence.

Also highly recommended and making a will in Spain

The testator may choose the application of the law of his/her nationality to govern his/her succession. Your Spanish will will make the process of succession and inheritance of your Spanish assets quicker, easier and less expensive. Approximate cost of the will is 200€.