How to execute a purchase of property in Spain
Over the past decade, property in Spain has been in high demand. During this period, the Spanish property market has experienced ups and downs, as it was significantly affected by the economic crisis in the country. Nevertheless, the popularity of property in Spain, especially in the coastal resort areas and in the Canary Islands, continues to grow. The greatest demand for property in Spain is among the citizens of the UK , Germany, and Scandinavia. The bulk of customers also includes the Russians and citizens of CIS countries. Along with this, Russian vendees rank Spain first in the list of the most popular places for the purchase of real estate in Western Europe. One of the important reasons why the Russians have chosen Spain is the ease of purchasing and registering property. In comparison with other European countries, Spain has the most favourable legislation to potential investors. Both legal entities and individuals can buy property in Spain. In addition, both residents and non-residents of the country have equal rights to buy any types of property: land, commercial buildings and all types of housing in Spain. Purchase process takes an average of 2 to 4 months. Real estate agency ETEN CANARIAS offers its customers the most complete database of property in Tenerife. We have made a step-by-step description of the procedures for the purchase and registration of property in Spain in order to help you to achieve the best result in the optimum time.
The procedure for registration of property in Spain.
- Preparation of applications. At this stage, it is important to submit the most detailed application for fast and efficient selection of suitable property, since the choice of immovable property in Tenerife is wide and diverse. The application should indicate the budget of a potential purchase, the area, and property type, such as a villa, town house, apartment, commercial property, land, and so on. The application also specifies additional requirements, such as the number of bedrooms, availability of the pool, proximity to the ocean, infrastructure, and service facilities. It is also important to note which type of market - the primary or secondary - the property belongs to, as well as the requirements for its state - ready to move in or need for repair.
- Selection of property. Having received the application, our managers select some options that correspond to the client's wishes. We have a complete and regularly updated database of property in Tenerife. Therefore, the more precise and detailed your requirements are in the application, the more productive our cooperation will be at this stage.
- The agreement to provide mediation services between the customer and the company.
- Property viewings. Taking into account the time that suits you, we draw up a schedule of viewings of the properties you like. During viewings our manager will accompany you.
- Reserving the selected property. A property reserve contract is drawn up for the period of 2 months. The buyer makes a deposit of 10 % of the purchase price, which is fixed by the contract of responsible reservation (contrato de arras). According to Spanish law, this contract can be both private and notarised.
- Coordination with the notary of the date of signing the notarial deed (formal sale and purchase agreement) - escritura de compraventa. During this period, prior to the conclusion of the contract, all necessary documents are prepared and the property is given a legal check on the presence of debts or the rights of third parties to it.
- The buyer is required to present a passport and NIE (foreigner registration number). For non-residents in Spain, NIE - which is also a tax number - is a mandatory document for executing the purchase and sale transaction. We help our customers to collect the necessary documents and provide assistance with the obtaining of NIE.
- When buying property in the Canary Islands in the secondary market, the buyer pays the property transfer tax (ITP) in the amount of 6.5 % of its value. In order to buy property in Tenerife in the primary market from the property developer, the buyer must pay IGIC tax of 7 %. In other regions of Spain, VAT (IVA) in the amount of 10% of the purchase price is paid when new housing is bought.
- Extra costs when buying property, including notary fees, mortgage loan (if applicable), documentation, registration of ownership in the property register, and translation services make up 6-8 % of the cost.
- Execution of the contract (Escritura de compraventa). The contract is signed on the appointed day at the notary office in the presence of an interpreter. The buyer gets a certified copy of the contract (copia simple). The original bill of sale is given to the buyer 2-3 months later. This period is necessary for the registration of the buyer as the owner of property in the property register (Registro de Propiedad).