PROPERTY PURCHASE

It is our aim with this web site to already inform you upfront about important points to take into consideration when purchasing a property in Spain. We will therefore further below explain you the 

Please always feel free to contact us via SKYPE (realtimerealty), normal telephone (+34-952 830 264) or email (info@real-time-realty.com). We are more than happy to explain you any questions in advance.

ONE-OFF INITIAL PURCHASE COSTS OF A PROPERTY ACQUISITION

A) When you purchase a RESALE PROPERTY, meaning from a private person, a property that has already been sold at least once before, you will have the following expenses:

Property transfer tax ("ITP"=Impuesto de Transmisiones Patrimoniales):

Please take into consideration that these taxes are payable on the higher of the purchase price or what the Tax Ministry considers to be the "Fiscal Value" of the property. The fiscal value can be calculated by us for you, so that you know whether or not it would exceed the purchase price and therefore the above mentioned percentages would be applicable on the purchase price or on the fiscal value. 

Notary Fees:
Depend on the value of the purchase and on the amount of pages the Notary Title Deed will have. For a property around 300.000 € the average price is approximately 750 € for the Notary, for a property around 700.000 € the Notary fees can be approx. 1.100 €. For higher prices we always call the Notary upfront to get a more detailed estimate. 

Land Registry Fees:
Depend as well on the value of the purchase and also on which Land Registry is involved, as some towns are less expensive than others. In general terms the Land Registry fees are approximately 70 % of the Notary fees.

Lawyer's Fees:
Depending on the lawyer they are usually between 1 and 1,5 % of the purchase price, plus 18 % VAT.

Bank fees for transfers and bankers drafts:
In the purchase procedure bank transfers from abroad to your new Spanish account will be needed, as well as bankers’ drafts at the Notary appointment. Those fees should be well discussed when opening a Spanish bank account, in order to keep them as low as possible. There are banks who offer accounts with minimum fees for bankers’ drafts and no fees for transfers, yet others are charging high amounts. Therefore please keep in mind that a few hundred euros could be spent on this item and that it is best to negotiate the terms with the bank right at the beginning, when opening a bank account. 

Initial costs for changing water, electricity and telephone contracts:
These costs will be normally deducted directly by standing order from your new Spanish bank account. They can be around 40-50 € for changing an existing electricity contract into your name and up to 150 € for changing an existing water contract, depending on the company in each case. It can also be that your lawyer may charge you some additional fees for handling the changeover of such contracts. 

Once that we have found your dream property for you, we will of course provide you with a detailed list of the one-off initial purchase costs for that specific property. 

These total one-off initial purchase costs would have to be increased by approximately 3 % in case that you purchase the property using a mortgage to part finance the property acquisition. The corresponding bank will give you a detailed estimation of those additional costs for the constitution and inscription of such a mortgage on the property. 

B) When you purchase a NEW PROPERTY directly from the DEVELOPER, (off-plan, in process of construction or already finished, yet still property of the developer's company), you will have the following expenses:

Value Added Tax (VAT) = property acquisition tax in this case
This VAT has been 8 %, yet was reduced in 2011 and is still reduced for purchases until the end of 2012 to only 4 %.
We will inform in our section "News" about any changes of that reduction that has taken place in order to help the developers sell their stock of unsold but ready built properties. 

Stamp duties ("AJD"=Actos Jurídicos Documentados):
1,2 % on the purchase price
These are stamp duties to be paid to the Tax Office of the Land Registry.

Notary Fees:
Depend on the value of the purchase and on the amount of pages the Notary Title Deed will have. For a property around 300.000 € the average price is approximately 750 € for the Notary, for a property around 700.000 € the Notary fees can be approx. 1.100 €. For higher prices we always call the Notary upfront to get a more detailed estimate. 

Land Registry Fees:
Depend as well on the value of the purchase and also on which Land Registry is involved, as some towns are less expensive than others. In general terms the Land Registry fees are approximately 70 % of the Notary fees.

Lawyer's Fees:
Depending on the lawyer they are usually between 1 and 1,5 % of the purchase price, plus 18 % VAT.

Bank fees for transfers and bankers drafts:
In the purchase procedure bank transfers from abroad to your new Spanish account will be needed, as well as bankers’ drafts at the Notary appointment. Those fees should be well discussed when opening a Spanish bank account, in order to keep them as low as possible. There are banks who offer accounts with minimum fees for bankers’ drafts and no fees for transfers, yet others are charging high amounts. Therefore please keep in mind that a few hundred euros could be spent on this item and that it is best to negotiate the terms with the bank right at the beginning, when opening a bank account. 

Initial costs for changing water, electricity and telephone contracts:
These costs will be normally deducted directly by standing order from your new Spanish bank account. They can be around 250-300 € for setting up a first private water contract as sometimes the installation of a metre is also charged, that often does not exist yet, due to the property being completely new, and up to 150 € for setting up a first electricity contract. It can also be that your lawyer may charge you some additional fees for handling the setup of such contracts. 

Once that we have found your dream property for you, we will, of course, provide you with a detailed list of the one-off initial purchase costs for that specific property.

These total one-off initial purchase costs would have to be increased by approximately 3 % in case that you purchase the property using a mortgage to part finance the property acquisition. The corresponding bank will give you a detailed estimation of those additional costs for the constitution and inscription of such a mortgage on the property. 

YEARLY RUNNING COSTS OF A PROPERTY

Local rates (IBI=Impuesto de Bienes Inmuebles)
These are urban rates you pay once a year to the Town Hall for their general services, roads, infrastructure, etc., they offer to their residents and non-residents. 

Rubbish Collection Fee ("Basura")
These are paid once a year on in two instalments over the year, depending on the Town Hall the property belongs to. 

Community Fees
If you purchase an apartment, penthouse or townhouse in a Community of Owners you have to pay your share of the maintenance fees of the communal areas, like pools, gardens, walk-ways, lightning, etc. But also if you purchase a villa you normally have to pay community fees to the General Community of the urbanisation for the maintenance of the streets, their lightning, cleaning, etc. In both cases it depends on the decision of the owners in their Annual General Meeting how those fees are paid, whether in one instalment for the whole year, semestral instalments or quarterly ones. 

Income-Tax for Non-Residents ("Renta")
Just for the fact of having a property and possibly getting some income through it you are obliged to present every year before the 31st of December a Spanish Income Tax Declaration for this tax. It is calculated by timing the cadastral value by 1,1 % and the result again by 24 % in case the cadastral value has been revised before 1994.
In case it has not been revised before 1994 the amount is calculated by: cadastral value x 2 % x 24 %. We can inform you about which of the two rules you would have to apply as it depends on the Town in which you purchase the property and whether or not the cadastral value has been revised after the 1st of January of 1994.
The cadastral value is a value stipulated by the Town Hall and a lot lower than the real property value and also lower than the fiscal value. It is to be found on the Local Rates receipt (IBI-receipt).
It is important to know that this is the only tax you cannot set up standing orders for it to be paid automatically by the bank. The tax declaration has to be carried out by you or your lawyer once a year for your property. The Tax Ministry so far also does not send any letters out to remind you of this obligation. 

Wealth-Tax for Non-Residents ("Patrimonio")
In the past this tax was also a "Wealth"-Tax to be paid. Its amount depended on the declared purchase price in the title deed. It was abolished, but the new Government elected in Spain in November 2011 stated already that they may be thinking of introducing it again. Whether such new tax would then affect Non-Resident's properties as well we do not know at present, but we will keep you informed in our section "News" on this website.
This would also be a tax for which you would have to make your own tax declaration, without receiving any notification, as explained above for the Income-Tax, in case it will be introduced again.

Water, Electricity, Telephone
These obviously depend very much on the use you make of these services. Nevertheless each contract has a minimum charge, whether or not you really have consumption for those services or not. An electricity contract can have approximately 40 € monthly minimum payment or higher, depending very much on the contracted voltage. Water in general terms is cheaper, but again depends on whether you purchase in a community where the water for the garden is paid through the above mentioned community fees or whether you decide for an individual villa where you would have to irrigate your garden on your own costs.

A landline from the main telephone provider Telefónica including ADSL can also cost between 40 and 60 € minimum charge a month, plus phone calls that are not included in that ADSL-package. There are new providers on the market nowadays that offer telephone solutions where you have a small individual antenna and only pay for the consumption of ADSL and telephone in the time that you are really using it, which can be a much cheaper solution. 

Household Content Insurance / Building Insurance
When buying a property within a building that is part of a Community of Owners, parts of the building will be insured by the general building insurance the Community of Owners will have. Nevertheless you need your own insurance for the household content inside your property. In addition insurance companies are clever to avoid payments where they can. Therefore it is also important to insure CERTAIN PARTS of your property with a building insurance. We recommend talking to a specialist with enough experience to explain to you in details what will be covered already by the existing insurance of the Community and what you should insure yourself. 
In case of purchasing an independent villa both household content AND the building should be insured by yourself.
We are happy to recommend you trustworthy insurance brokers who can assist you in these aspects. 

Alarm connection fee
If your property has an alarm system in order for somebody to come out and immediately check what is happening in case it goes off, you need to connect it to one of the several alarm companies that are operating on the coast. Normally there are certain companies more present in certain areas and it makes sense to look at their estimate for a yearly connection fee, as they have their security guards controlling the area and driving around the streets of the urbanisations they mainly cover, so that they are the quickest to be present in case the alarm goes off. 
Normally the price for an apartment can be around 400 € a year depending on the amount of alarm sensors you have. In more sophisticated systems for villas with internal and external alarm sensors we would always ask for a detailed estimate. 

Once that we have found your dream property for you, we will, of course, provide you with a detailed list of the yearly running costs for that specific property.

STAGES OF THE PURCHASE PROCEDURE

In this section we would like to give you a brief overview of the different stages of a property purchase in Spain. 

1) PROPERTY SEARCH

We are simultaneously members of the two biggest and most established Multiple Listing Systems (MLS) for agents on the Costa del Sol. This enables us to offer you not only our own directly listed properties, but also to search for the right property for you within the wide range of 45.000 properties listed by approximately 800 agents with whom we collaborate.

Approximately half of this database you will find uploaded and for your use under "PROPERTY SEARCH" in the main menu of this website, with a search engine, allowing you to see some of the results that may suit your requirements. Nevertheless we cannot upload all the information of properties we have currently available and will always carry out a detailed search in the whole database. 

Please do not worry that a property purchase may become dearer for you due to us collaborating with other agents. In case we do not find the adequate property for your wishes and requirements amongst our own listings, but within the properties one of our collaborators has listed, the commission the owner will pay has previously been agreed with that agent. It will not be increased and we just share the normal commission 50/50 between the two agencies. This way of collaboration will not make the property a single Euro more expensive. It only increases our chances to find the best suitable property for your requirements.  

When searching for the right property for you in such a vast amount of properties, it is of UTMOST IMPORTANCE to us that you explain us as detailed as possible what you are exactly looking for, what you requirements and wishes regarding the property are. The better we know what you are exactly looking for, the better our search result and offer of suitable properties for you will be.

We therefore have elaborated a detailed questionnaire we can send you by email or alternatively we can speak about this via SKYPE (realtimerealty) or normal phone (+34 952 830 264). Once that we know your requirements inside out we will then be able to provide you with a list of only suitable and really interesting properties, start the search from there and refine it more and more through your collaboration with feedback and your opinion about the properties we send you.

In case we have not yet pre-elaborated one of our property videos, as explained under "ABOUT US", we can then take a video for the most interesting options for you or you can visit them in Real Time together with Mrs Katja Range, talking to her directly over SKYPE whilst she is in the property, transmitting you its video you will see in real time, without having to move from home and being able to ask her all your questions there and then. 

We understand our work as helping you with our vast experience and product knowledge to come to a short list of ONLY SUITABLE properties for your personal requirements, before you make the effort of coming to Spain and have a personal look at those properties, in order not to waste any of your precious time. 

2) OFFER AND RESERVATION DOCUMENT, PAYMENT OF RESERVATION DEPOSIT

Once you have found your dream property we will elaborate an offer document with the terms and conditions under which you would like to purchase the property. It will definitely state that you will take over the property FREE of any debts, charges and encumbrances. Apart from the offered price this document should include the maximum date in which you will be able to sign the private purchase contract and pay the corresponding amount and also the maximum date for completion of the property purchase at the Notary (see further below). 

This offer and reservation document will be passed over to the owner and if he accepts the offer and conditions he will counter sign it as proof of reservation. At this point you will have to pay a reservation deposit (depending on the value of the property it could for example be 3.000 / 6.000 € for apartments or 10.000 / 15.000 € in case of villas). 

3) NIE NUMBER AND SPANISH BANK ACCOUNT

For any property purchase in Spain in order to carry out the process and also later pay the corresponding taxes, it is necessary for foreigners to apply for the NIE number = "Número de Identificación de Extranjeros". It is a simple identification number for foreigners, which does not mean at all that you are now a tax resident or anything similar in Spain. They simply need a unified form of identification number for foreigners, as the passport numbers are different in all countries and do not fit and are not acceptable in the Spanish computer systems when it comes to paying the taxes on the property purchase, for example.

We can help you to obtain this NIE number at the local National Police Station. The easiest way is to apply for it when you are here on the coast, as the Police wants to be able to verify that the passport picture coincides with you. Approximately 3 days after the application we can collect the number. It is necessary to have it latest for the Notary appointment. Therefore it would be good to organize it already on one of your trips before the Notary appointment.

It is also important that you open your own Spanish bank account in order to be able to transfer the funds for the purchase from your own account abroad to your own Spanish bank account, to carry out the stage payments here in Spain. Alternatively you can also transfer the funds to your lawyer's clients' account, but by experience our clients prefer to send especially the final big payment for the Notary appointment to their own new Spanish account. You will anyhow need it for the payment of the yearly running costs of the property (explained above) by standing orders.

4) VERIFICATION OF LEGAL DOCUMENTS OF THE PROPERTY and PRIVATE PURCHASE CONTRACT

In the offer document we will have included already that the next stage payment, after the deposit payment, will take place together with the signature of the private purchase contract. At this point in case of resales normally 10 % of the purchase price (minus the already paid deposit) will be handed over to the seller and in case of purchasing from a developer the amount can vary between 20 and 30 % (also minus the already paid deposit). 

Before the signature of the private purchase contract your legal representative or lawyer will have double checked that all legal documents of the property are in place and correct and that there are no debts on it. In case there are any outstanding bills or debts these will either be paid and cancelled before the Notary appointment or retained from the balance payment to the vendor at the Notary appointment and your lawyer will make sure they will be paid. 

You can either be present to sign the private purchase document yourself or it can be sent to you by email, you print and sign it, send it back by Courier Post to your lawyer and then the vendor counter signs it in your lawyer's office and receives the correspondent payment. You can also give either already in Spain a power of attorney in front of a Spanish Notary to your lawyer to carry out the whole paperwork or issue such power of attorney in the Spanish Consulate or Embassy in your home country, but it needs to be translated into Spanish and stamped with the "Apostille of Den Haag".  

5) NOTARY APPOINTMENT

Before the day foreseen for the signature of the final purchase title deed ("Escritura de Compraventa") you will have to transfer the balance of the purchase price, plus the one-off initial purchase costs to your own new Spanish bank account, in case it has been opened, or to your lawyer's clients' account. 

At the Notary everything will be prepared in order for both parties to sign the public title deed of the property and at the same time the balance of the purchase price will be handed over to the vendor and he/she will hand you over the keys to the property. Everything is done at the same time. You will be able to go directly from the Notary to your new property and to enjoy it straight away. 

The Notary is obliged by law to immediately inform the Land Registry that this property has just been sold, the Land Registry takes notice of that sale and this way it is avoided that it could be sold twice. The Spanish laws over the past years have improved very much in order to give utmost security to the purchaser. 

6) PAYMENT OF TAXES, REGISTRATION OF TITLE DEED, CHANGE OVER OF CONTRACTS

The Notary fees and property acquisition tax (explained above) will be paid and the title deed will be registered at the Land Registry. Approximately 4 to 6 weeks later you will be able to receive the original title deed from your lawyer, fully registered in the correspondent Land Registry. 

In the meantime your details will have been given to the Town Hall to change the bills for the local rates (IBI) and rubbish collection fee (Basura) into your name and Spanish bank account, as well as the community fees. The same changeover of contract title holder and new standing order will be carried out for the water, electricity and telephone contracts, so that all services related to the property will be in your new name and where payments can be done by standing order your new Spanish bank account will be used for that. 

FINANCE / MORTGAGE

In case you may want to use FINANCE to purchase a property we would kindly like to recommend you to verify the possibility of obtaining such in advance. Due to the financial crisis banks have changed their requirements to clients in order to approve a mortgage and they can change even monthly.

Since more than 10 years we have been successfully working and collaborating with one of the best independent specialists for organising finance from a big variety of different banks, therefore having a vast experience in what is possible and in which bank she can find the best solution for each particular situation of our clients. 

Therefore, please advise us whether you want us to kindly ask this specialist to get in contact with you to personally talk about this issue with the aim to pre-qualify for a mortgage.

This way both you and us will know exactly what maximum budget you will be able to invest into a property, a detail that is of course of extreme importance to us when starting with the work of a property search. It makes little sense to start searching our whole database for hours, possibly taking videos and you even viewing properties here on the coast if we depend on part finance and do not know yet whether you could really obtain it here in Spain. Yours and our time would be wasted. Therefore we strongly recommend using this facility to pre-qualify for a mortgage, before starting the search process. Thank you.