Your First Steps
STEP 1.- WHAT PROPERTY IS RIGHT FOR YOU?
Once you have made the decision to buy a property whether it is your first home, a holiday home or an investment property, a lot of time and consideration is necessary to make sure that you buy the property that suits your personal needs and requirements. If you browse our extensive property portfolio, you are bound to find a property that you feel is right for you. However, if you are unsure, please ask our sales consultants who will then advise you and find you your dream home. If you do not live locally, you can also submit a property enquiry detailing your requirements and in turn, we will forward the properties that meet those requirements.
STEP 2.- THE PRICE:
You will have chosen a property whose price falls within your budget. What you must also take into consideration is that there are expenses on top of the sale price. As a guideline only, calculate 10% of the sale price and this should cover all your expenses. This includes I.G.I.C. tax (Impuesto General Indirecto Canario) the equivalent to VAT tax; this tax is only valid within the Canary Islands and is currently at 5%; mainland Spain works under a different tax system but the procedure is the same. The remaining 5% covers notary fees, registry fees and possible solicitor fees. It is of extreme importance to include these additional expenses when calculating your budget. The tax to be applied depends on the type of property you are buying and is calculated on the sale price of your property:
New Property:
5% I.G.I.C.
0,5 - 1% Impuesto de Actos Jurídicos Documentados or AJD (Document Tax)
Resale Property:
6,5% Impuesto sobre Transmisiones Patrimoniales or ITP (Transfer Tax)
Much to your surprise you'll find there is often a surplus that is returned to you once all paperwork has been submitted and payments made.
STEP 3.- PAYING THE DEPOSIT:
An initial deposit is paid to reserve the property of your choice until the private sale and purchase contract is signed. You will normally be required to pay between 3000€ and 6000€ at this stage but this will depend on the vendor's conditions, amount that is then deducted from the agreed sale price. Even though we check the property with regards ownership, debts etc you may want to take out the services of a solicitor.
A solicitor will carry out all the necessary searches on your behalf and make sure that you can proceed safely with the purchase. This is done by requesting a Nota Simple at the Property Registry Office. This document details legal ownership of the property you are interested in along with any debts the property may have. We always recommend you use a local solicitor as opposed to one based in the UK or Ireland as they are well versed in Spanish law as well as local customs and on top of that, they can be in constant communication with the vendor or developer in question and ensure your best interests. It is also possible for your solicitor to act on your behalf by means of Power of Attorney. This means that your physical presence is not a must when it comes to signing contracts, opening bank accounts or taking title of the property in your name.
STEP 4.- THE SALE AND PURCHASE CONTRACT:
Once the deposit has been received and all parties involved are happy to go ahead, a private sale and purchase contract is drawn up. This document commits the vendor and the purchaser to the clauses and stipulations within. It is normally a straight forward contract that simply details the legal obligations for both parties up until handover as well as a description of the property in question.
This document will be signed by both parties in Spanish and even though you may receive a translation, the Spanish version is the legally binding document and the translation serves for information purposes only. It is also common practice for another installment to be paid by the purchaser at this stage, normally around 10% of the sale price. If you are buying off plan there will be more stage payments to be made and the contract will detail the amounts and dates in which these must be made.
