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Buying a house or property in Spain

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Buying a property in Spain.

Buying a property in Spain has been growing in popularity for many years. A pleasant climate, relaxed lifestyle and reasonable living costs means that buying a property in Spain is a very attractive proposition. Spain recognizes the value of tourism and foreign residents and has made the switch easy, to the extent that Spain has more foreign income than any other European country.

There are many areas to buy a property in Spain and different types of property to buy in Spain, from farmhouses (fincas), apartments, houses to villas. You can buy old properties, new properties or even new developments in Spain.

Buying a property in Spain is of course different to buying property elsewhere, but the underlying principles are the same if you were buying a property in the UK or buying a property in the USA. So always bear in mind that some of the following might be applicable:

View the property more than once.

Location

Budget

Survey the property or have it checked out professionally

Check ownership and debts on the property

Costs associated with buying a property in Spain.
As well the purchase price of the property, there are other costs that must be considered when buying a house in Spain.

Transfer tax (IVA), which at present is 6% on a second-hand property and 7% on a new one

1/2% stamp duty

Change of deeds - approx 300�

Notary charges for copies of the 'escritura publica', costs depending on the contract price

Sometimes the buyer also pays the sellers fees. Check this at the point of enquiry.

Once you have purchasd your Spanish property you will also have ongoing costs:

IBI which is an annual real estate tax

If you buy a property in a shared development you may have a community charge to cover things such as maintenance, swimming pools, gardens etc

Wealth tax, payable annually, based on the value of the Spanish property

Property owners income tax based on your income from the property if you rent it out.

Legalities of buying a property in Spain
The seller of a second-hand home should provide the following documents:

The title deed of the property.

Receipt of payment of the real estate tax for the last year.

Receipt of payment of the tax on the increased value of Urban Land.

Certificate that any community charges (if applicable) have been paid up to date.

Latest copies of domestic bills so that you can take over the services such as electricity and water.

The seller or developer of a new property should provide you with:

Deed of declaration of new construction

Occupancy permit

Certificate of rateable value of the property

Before the property purchase proceeds there is an agreement drawn up between the buyer and seller identifying the two parties and set out the terms of purchase. It is important to seek legal advice before signing this and you must be committed to the property as there will be no rebate on deposits after this point.In the case of the seller defaulting then he has to pay twice the amount. The contract has to be signed in the presence of a notary, in the form of a public deed. The details are then entered onto the public records.

Tax advantages for buying a property in Spain
If you spend more than six months a year in Spain, you are obliged by law to apply for a residents permit.There are however, several tax advantages for residents of Spain that do not apply to non-residents.

Capital gains tax will be charged on any profit on sale of property. This is 35% for non-residents but only 20% for residents. If you are over the age of 65 and have lived in your property for at least three years, you are totally exempt from capital gains tax. You can also bequeath your property to your spouse or children and avoid paying inheritance tax on 95% of the valuation. The inheritor must also be a resident of Spain and agree not to sell the property for at least ten years. Please consult a Lawyer or Accountant for full information.

Currency used in Spain is Euros
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Quick guides
- Buying property in abroad

Currency for buying property abroad

Purchasing a house in Europe

Australian property purchase

Property purchase in Canada

Buying property in USA

Costs invoved in buying a villa or gite in France.

The Euro currency rate could have a dramatic effect on the cost of buying a house or property in Spain
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