We appreciate that buying a property overseas can be a minefield therefore be sure that as our client, every step of your purchase will be managed in a professional and friendly manner.
Once you have chosen the property you wish to acquire, the next step is to enquire on features of the property; plans, terms of payment and extras if any. At this stage you might require the assistance of a qualified Lawyer who will help you and clarify any points and costs involved.
BUYING A NEW PROPERTY
Most developments require the purchaser to make payments during the building process making a final payment upon completion and final handing over of keys and Title to it. These payments in advance range, depending on the development you have chosen, from 30 to 50% of the price, payable during the construction and balance at completion.
It is common that the amounts to be paid in advance be distributed the following way:
– A small deposit of about € 6,000 as a reservation fee to reserve the property for which a receipt will be drafted stating the exact unit, total purchase price and payment terms.
– A further amount is paid at exchanging of the private contracts normally 15 days after reservation.
– The balance up to the 30 or 50% will be paid during construction, distributed in periodical installments.
– Finally the balance of the purchase price is paid at completion upon the signing of the Title Deed.
BUYING A RESALE PROPERTY
– Most vendors will require from 10 to 20% of the purchase price to be paid at exchange of contracts and balance at completion.
– The balance will be paid by the purchaser before a Notary Public where the sale will be formally completed in a Public Title Deed granted by the vendor in favor of the purchaser.
TAXES TO BE PAID WHEN TRANSFERRING A PROPERTY
First of all it is important to distinguish if the property is a first transfer, that is bought from a Developer, in which cas it will be subject to V.A.T., or whether it is a second hand property in which case it will be subject to PROPERTY TRANSFER TAX (IMPUESTO DE TRANSMISIONES PATRIMONIALES, I.T.P.)
The applicableTransfer Tax for the transfer of dwellings including up to two garages, will be the following:
|Up to EUR 400,000.-||8%|
|From EUR 400,000.- up to EUR 700,000.-||9%|
|From EUR 700,000.- and ongoing||10%|
- i.e. a property of EUR 600,000.-
|For the first EUR 400,000.-||EUR 32,000.-|
|For the balance EUR 200,000.-||EUR 18,000.-|
SALE OF PROPERTIES SUBJECT TO V.A.T.
(first transfer of a property from the promoter)
V.A.T. AND STAMP DUTY.
(IVA Y ACTOS JURIDICOS DOCUMENTADOS, AJD.)
The applicable VAT is 10% and the Stamp Duty is 1,5%
The VAT for the acquisition of Plots is 21%
I.B.I. (Annual Rates) and Rubbish collection: This is paid yearly to the Town Hall and the amount depends on the value of the property.