Menu
The steps to follow for buying a property in Spain are the following:
- Home selection and preliminary financial study
- Legal review: verifying that everything is in order
- Open a bank account
- Reservation and purchase agreement
- NIE
- Mortgage loan
- Signing of the deeds
- Payment of taxes and other expenses
- Land registry
- Maintenance expenses
We will be by your side from the first moment, and will guide you through the entire process
IF YOU WANT, WE CAN TAKE CARE OF EVERYTHING WITHOUT THE CUSTOMER BEING IN SPAIN, THROUGH A POWER OF ATTORNEY
1. HOME SELECTION AND PRELIMINARY FINANCIAL STUDY
Grupo Terrasun will help you finding your dreamed home in Spain.
We will pick you up at the airport, show you all the areas and properties that suit your needs, and share our deep knowledge of the market with you.
In addition, if you are interested in obtaining a mortgage loan, we will go to the bank with you, so that they can do a preliminary study of financing, and resolve any questions you may have in this regard.
Once you have found the house of your dreams, we will accompany you throughout the whole process for completing the purchase of your home in Spain successfully. Furthermore, if you wish, we can carry out most of the work independently, acting on your behalf through a power of attorney, which will save you time and money so you don´t need to travel to Spain several times.
2. LEGAL REVIEW: VERIFYING THAT EVERYTHING IS IN ORDER
In Terrasun Group, we always check the legal documentation of all the homes we sell, to ensure that our clients will not have any problems.
Likewise, when signing the property deeds, the Notary must ensure that the operation complies with all legal requirements and will check all the documentation and relevant aspects.
Our team of lawyers will check the legal situation of the properties being purchased and will control every step, checking the legitimacy of the documents to guarantee the safety of our clients when buying their property in Spain.
These are some of the documents checked:
SECOND HAND PROPERTIES:
- NOTA SIMPLE (CERTIFICATE FROM THE SPANISH LAND REGISTRY): Through this document, we will confirm that whoever is selling the property is the owner of it. And also, we will check if the property has any debt or burden. In Spain, real estate must be sold free of charge, unless both parties agree otherwise.
- COMMUNITY EXPENSES AND REAL ESTATE TAX (I.B.I.): We check that the property is up to date with the payment of taxes and community expenses.
- SUPPLIES: The change of holder of the supplies is cheaper than hiring a new registration. For this reason, at Terrasun Group, we check that supplies are active and up to date with payments.
KEY IN HAND PROPERTIES:
- NOTA SIMPLE (CERTIFICATE FROM THE SPANISH LAND REGISTRY): Through this document, we will confirm that whoever is selling the property is the owner of it. And also, we will check if the property has any debt or burden. In Spain, real estate must be sold free of charge, unless both parties agree otherwise.
- FIRST OCCUPANCY LICENCE: It is the license that certifies that the building has been built as described in the technical project and indicates that the building can be used to live in compliance with regulations. This document is necessary because it is the only way to legalize construction and it is also necessary to contract and register supplies (water, electricity and gas).
- INHERENT DEFECTS INSURANCE: It is a compulsory insurance that must be contracted by construction companies and / or developers of a residential building. Thus, they guarantee a response to possible flaws in construction (at the structural level) that may arise during the first 10 years from the completion of the building.
- COMMUNITY EXPENSES AND REAL ESTATE TAX (I.B.I.): We check that the property is up to date with the payment of taxes and community expenses.
OFF-PLAN PROPERTIES:
- NOTA SIMPLE (CERTIFICATE FROM THE SPANISH LAND REGISTRY): Through this document, we will confirm that the developer is the owner of the land. And also, we will check if the land has any debt or burden.
- BANK GUARANTEES: Terrasun Group only works with developers who offer bank guarantees to our clients. These guarantees ensure that all the amounts paid by the customer, would be reimbursed to him, in the case the building would not be finished.
- BUILDING LICENSE: It is the municipal authorization for carrying out the works.
+34 681 294 315
+34 685 919 968 (Whatsapp, Viber)
info@grupoterrasun.com
3. OPEN A BANK ACCOUNT
Opening a bank account in Spain is free and you can close it whenever you want.
Although having a bank account in Spain is not an essential requirement for buying a home, it is recommended, since the buyer can accumulate there his money for the acquisition of the property, and afterwords the payment of supplies, community expenses and taxes, can be automatically deducted from the bank account.
4. RESERVATION AND PURCHASE AGREEMENT
Signing of the deposit agreement between the seller and the buyer, which contains the reservation of the property, its data, its price, the payment schedule and the maximum date on which the deed must be signed.
As a general rule, a house is reserved with 3.000€ or 6.000€, and within 15-30 days, the reservation is completed up to 10% of the price of the house. In the case of off-plan properties, around 40-50% of the Price is usually paid throughout the construction process. And the rest of the price is paid on the day of signing the deed.
In any case, this may vary, since it depends on the agreement reached with the owner or the developer.
5. N.I.E.
The N.I.E (ID number for foreigners) is a personal, unique and exclusive sequential number granted by the immigration Office, for identification purposes. This number does not enable you to live in Spain, but it will be necessary for any financial transaction like buying a property, starting a business, buying a car, etc.
The N.I.E. can be obtained at the immigration Office in Spain, or at the Spanish Consulate in your country of residence. This procedure can be done personally or through a duly accredited representative, so if you wish Terrasun Group could get it on your behalf through a power of attorney.
Documents required for getting the N.I.E:
- Application EX15 (Grupo Terrasun will help you filling in it)
- Original and copy of the whole passport
- 2 photos
- Proof of the economic, professional or social interests justifying the application.
- Fee payment
6. MORTGAGE LOAN
Terrasun Group helps you to get the best financial conditions for the purchase of your new home in Spain. In the case of Non-Resident customers, Banks usually offer up to 70% finance, achieving up to 80% mortgage loan in some cases.
In Spain there are three main types of mortgage loans : variable (interest rate is adjusted with the Euribor), fixed (interest rate is fixed), and mixed (a combination of both).
Depending on the financial needs of each client, we locate and offer the most advantageous mortgage solutions from each bank, without any cost for the client.
ADVANTAGES OF APPLYING FOR A MORTGAGE LOAN IN SPAIN (FOR A NON-RESIDENT):
- Low interest rate (around 3%)
- Long loan duration (up to 25 years)
- The mortgage can cover up to 70% of the purchase price (up to 80% in some cases).
- Possibility of early cancellation (Partial or Total)
- Approval of the mortgage loan in approximately 3 weeks
- Foreign buyers of real estate in Spain do not necessarily need a mortgage guarantor.
DOCUMENTS NEEDED TO APPLY FOR A MORTGAGE LOAN:
- International Passport
- I.E.
- Sale Contract
- Income tax return from the last 2 years *
- Employer Letter*
- Credit Report *
- Bank statement for the last 6 months *
- If you are an entrepreneur, you must also provide documentation from the Company *
*Documents must be translated into Spanish. This can be done through a sworn translator in Spain (Grupo Terrasun, will help you with this).
The bank reserves the right to request additional documents.
EXPENSES RELATED TO THE MORTGAGE LOAN:
Since 2019, the Real Estate Credit Law has introduced important news in the distribution of expenses related to the mortgage deed, between the bank (lender) and the client (borrower). Now, most of the expenses must be paid by the bank.
The bank pays:
The expenses of Notary, Registry, Management fee and the Tax of Documented Legal Acts (AJD).
The buyer pays:
1.- The Appraisal of the property. In order to get the mortgage loan, an independent appraisal of the property you want to purchase, needs to be done. The appraisal result may also influence in the amount of loan granted by the bank.
2.- Mortgage Opening Fee (percentage that depends on each bank; It usually varies from 1% to 2% of the mortgage loan’s amount)
3.- Home and/or Life insurance. The bank may require the borrower to contract a House insurance, Life insurance or Payment protection insurance.
If you require further information, please contact Terrasun Group and we will answer all your questions.
+34 681 294 315
+34 685 919 968 (Whatsapp, Viber)
info@grupoterrasun.com
7. SIGNING OF THE DEED
Once all the procedures are resolved, we will set a date for the signing of the deed (that is, the purchase certificate).
In the case of having applied for a mortgage loan for the purchase of the house, 2 deeds will be signed (the purchase deed and the mortgage loan deed).
Before the big day, Terrasun Group will deliver all the necessary documentation to the notary, so that on the day of signing, everything is ready and there are no surprises.
On the day of signing, the notary will read the deed aloud, the buyer and seller (or their legal representatives) will sign it and you will be given the keys of your new home, the Energy Efficiency Certificate and other documentation.
8. PAYMENT OF TAXES AND OTHER EXPENSES
The EXPENSES ASSOCIATED WITH THE PURCHASE OF A PROPERTY vary depending on whether it is a new construction or 2nd hand and depending on whether the buyer is requesting a mortgage or not.
TAXES
NEW BUILD:
- V.A.T.: 10% of the deed value of the property.
- Impuesto sobre Actos Jurídicos Documentados (IAJD): Depende de cada CCAA, varia entre 0,5% y 1,5%.
REVENTA:
- I.T.P.: Depende de cada CCAA, varia entre 6% y 10%
NOTARY
The notary’s expense tends to vary depending on the price of the property, the length of the deed, if the house has attached properties or garages, etc. In general, the price is between 600€-1000€
REGISTRATION
The cost of registration will depend on the place where the property is located, the characteristics it presents and the cost of the purchase. In general, the price is usually between 300€-600€
IN THE CASE OF REQUESTING A MORTGAGE LOAN for the purchase of the home, you will have the following additional expenses:
1.- Appraisal. The price is usually between 200€-500 €.
2.- Bank Opening Fee (Percentage that depends on each bank that usually varies from 1% to 2% of the loan amount.)
3.- Home and/or Life insurance. The bank may require the borrower to purchase home insurance and / or life or payment protection insurance. A Home Insurance usually costs between 200€-400€/year.
9. REGISTRATION
After signing the deed and paying the taxes, the deed is presented in the Land Registry of Spain. Registration usually takes 1 to 3 months.
This is a mandatory process only if you have applied for a mortgage loan to make the purchase. However, it is advisable to always do it, since it will provide the buyer with legal certainty.
We hope that this guide has helped you understand the process of buying a home in Spain. We know it is a lot of information, but please do not be alarmed
We are here to help you in every step of the process
[pdf id=5175]