Buying and Selling Guide

Dream Spanish Homes: Spanish Property Buyer Guide

At Dream Spanish Homes, we know that nobody likes surprises when they are buying a property; whether in Spain or at home. With this in mind, we have put together a quick guide to the issues and costs you need to consider when buying your dream Spanish property. 
In this page, we give you more information on what to expect around: 
1. Legal representation 
2. Buying from a private individual 
3. Buying from a property developer or bank 
4. Exclusive Dream Spanish Homes Offers 
5. Deposits 
6. Mortgages 
7. Costs: Taxes and legal fees 
We can help you get the right legal representation for your property purchases. With over 15 years experience in property, we have dealt with a number of solicitors we trust to look after our customers; including those fluent in English, Swedish, Norwegian, German and several other languages. 
They can fully explain the buying process and fees as well as answering any questions or concerns. If you are happy to proceed, you will need a Spanish NIE number: we can help you do this. 
Once you have found a property and want to proceed, you can instruct your solicitor to complete the purchase on your behalf. At this point, you can grant the solicitor power of attorney – which we can arrange a notary to handle – which many people choose since it means the purchase can go ahead without flying back and forth to Spain. 
When you are buying from a private individual, you need to factor in the Transfer Tax (Impuestosobre Transmisiones Patrimoniales – ITP), which only applies when a sale is between two individuals, instead of a property developer or a bank. 
If any deposit is paid before completion of the sale, it’s not subject to ITP (pro rata.) However, the full amount of ITP still has to be paid upon completion. In this scenario, there is no VAT to pay and stamp duty is already included in this tax.
The Transfer Tax rate is at the discretion of the autonomous regions, who can choose to apply the general rate or their own rate. The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends on the autonomous region where you buy. We can advise beforehand when you’ve picked the property you want. 
When buying property in Spain, you need to budget for VAT & Stamp Duty, (IVA & Actos Jurídicos Documentados – AJD). These taxes apply for residential properties being sold for the first time, (never previously occupied), or for commercial properties and plots of land.
VAT is a national tax, payable anywhere you buy property (with the exception of the Canaries, which have their own version of VAT).
At present VAT (known as IVA) is 10% of the purchase price of residential properties and 21% for commercial properties and plots of land. Stamp duty (known as AJD), is 1% of the price of the purchase but might go up in some regions, so be sure to check the latest rate.
Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, the deposit is subject to VAT when the deposit is paid. In this scenario, there is no transfer tax to pay.
We are the only agents to give you more. 
Unlike other agents, we care more about the customer than simply making a sale. We are the only agent to provide exclusive offers; such as a free inspection trips, exclusive free golf club memberships, fully furnished properties, air conditioning and even a free car.*
When it comes to customer service, aftercare, transparent fees and exclusive offers, we are the agents that give you more. 
* Exclusive offers depend on the needs of the buyer and availability of the offer at the time of the purchase. Offers can not be redeemed for the cash equivalent. For more information, please see our website terms of service. 
Once you have decided that buying property in Spain is the right decision for you, and have agreed the sale, you are required to pay a deposit of €5,000, payable by Credit or Debit card.
This reserves the property for you and the property is withdrawn from the market immediately.
If standard completion is possible (6-8 weeks), then no further deposits are required. However, on certain occasions, a second deposit is required on properties over €150,000, but this is always something we and the acting solicitor would tell you beforehand. With us, there are no hidden fees. 
We currently have a selection of Bank Repossession properties available, with up to 110% mortgages available from some banks.
The majority of our properties, whether they are re-sale, off-plan or key ready properties would typically see a mortgage offered between 60% to 70%, subject to financial status and credit checks. 
All property prices listed on our website are shown before any additional costs, such as taxes and legal fees; therefore we have made this short guide outlining – roughly – what to include when budgeting for buying a property in Spain: 
• ITP Transfer Tax, (ImpuestosobreTransmisionesPatrimoniales – ITP) 8% on resales and bank repossessions, a charge applied by the regional government. 
• Land registry, notary costs 1% to 2%.
• Mortgage costs, (including stamp duty) and set-up fees are approx 1% to 2%.
• Clients may have other expenses on completion. e.g. first years’ insurance, first quarter’s community fees.
• Solicitor/Legal fees. Typically €1,000 to €1,500 + VAT.
• Stamp duty 2% – On new developer properties or SAREB (Bank) properties.
• However, If the property is purchased direct from the developer, this is taxed by the national government and not the regional government, which means IVA (VAT), and not ITP, applies, which is 10% (not 8%).