Closing a property purchase agreement in Spain

Contracting a property purchase agreement in Spain: key factors to consider

Buying property in Spain can be an attractive prospect for both investors and those looking for a second home or holiday destination. However, this process requires a careful approach and understanding of the specifics of the local market. Here are the main factors to consider when concluding an agreement to purchase real estate in Spain.

Study of the real estate market

Before making a decision to buy, it is worth studying the real estate market in Spain in detail. This includes:

• Analysis of real estate prices in different regions.
• Evaluation of market trends and future forecasts.
• Comparison of housing costs in different cities and districts.

Legal aspects

Concluding an agreement to purchase real estate in Spain requires compliance with certain legal procedures:

• NIE (Número de Identificación de Extranjero)*(moa) Identification number of a foreigner, required for all legal transactions in Spain.
• Due Diligence*(moa) Verification of real estate documents, including proof of ownership and absence of debts or encumbrances.
• Engagement of a lawyer*(moa) It is recommended to hire an independent lawyer who specializes in real estate to ensure the legal purity of the transaction.

Financial aspects

Budget planning and consideration of all expenses – key aspect of buying real estate:

• Purchase price*(moa) Compare prices for similar properties in the selected region.
• Additional costs*(moa) Includes taxes, notary fees, registration fees and legal fees.
• Mortgage*(moa) If you are planning to take out a mortgage loan, it is worth researching the mortgage conditions in Spanish banks and getting pre-approved.

Tax aspects

Purchasing real estate in Spain is subject to various taxes:

• Property transfer tax (Impuesto de Transmisiones Patrimoniales)*(moa) Depends on the region and is between 6% and 10% of the real estate value.
• Value added tax (IVA)*(moa) 10% for new properties.
• Annual Property Tax (IBI)*(moa) Property owners in Spain are required to pay this tax every year.

Selection of real estate

After preliminary research and financial planning, it is necessary to carefully approach the choice of a specific object:

• Location*(moa) Choose an area that suits your needs and desires.
• Property type*(moa) Choose between apartment, house, villa or other housing types.
• Property condition*(moa) Assess the technical condition of the building and the need for repairs.

Execution of the agreement

When all the preparatory stages are completed, you can start concluding the agreement:

• Reservation* (moa) Signing the reservation agreement and making a deposit (usually 10% of the cost).
• Purchase contract (Contrato de Compraventa)*(moa) After all checks are completed, the main purchase contract is signed.
• Notarization* (moa) Final signing of the sales contract in the presence of a notary and registration of the agreement in the land registry.

After purchase

After completing the deal, there are several steps to take:

• Property registration* (moa) Registration of property rights in the land register.
• Connection of communal services* (moa) Organization of connection of electricity, water, gas and Internet.
• Payment of taxes* (moa) Payment of taxes related to the purchase and ownership of real estate.

Conclusion

Conclusion of a real estate purchase agreement in Spain – it is a complex process that requires careful preparation and compliance with all legal and financial aspects. A careful study of the market, consultations with lawyers and financial planning will help to avoid possible problems and ensure the successful completion of the transaction.