Advantages of buying a property in Spain
A peculiar mild climate, moderate prices and low taxes attract different buyers from all over the world to the Iberian Peninsula. In general, it is Spain, including the Canary Islands and the Balearic Islands.
In Spain, prices for new buildings and properties from the secondary real estate segment may not be too much different. On the other hand, the buyer should take into account that the acquisition of new facilities implies the payment of a larger tax. If they buy housing on credit, non-residents are supposed to pay an amount that covers 70% (in some cases 60-65%) of the value of the property.
Before making a transaction, you have to make sure that the seller has an extract from the National Property Register of Spain. A lawyer will help you check the authenticity of it. Then, upon agreement with the second party, you have to open an account in one of the local banks. Here, you will transfer the agreed sum after a detailed study of the parameters of the property and checking the absence of debts or unpaid mortgage,.
On average, the costs for processing a package of securities will be as follows:
- Value Added Tax (IVA) for the purchase of new housing up to 10 per cent of the total value;
- Tax (ITP) 6 or more percent of the price;
- The stamp tax, depending on the prestige of the district. It ranges from 7 to 10 per cent of the amount.
After the buyer has ascertained the availability of the acquired object in the State Property Register, the parties conclude a special transaction. It is Escritura Publica, which confirms the ownership of the designated Real Estate in Spain.
They draft such a document with the participation of a notary certifying the signatures of the seller and the buyer and confirming the legality of the transaction. The lawyer also registers a new document with the latest information from the above-mentioned Register. The seller receives a money transfer and the buyer becomes the legal owner of the property.
Further, only payment of utility payments ("communadad"), which covers energy consumption, maintenance and repair, and restoration work, is relevant. In addition, you will have to pay the annual municipal tax on housing.
Now, prices have not yet risen after the years of crisis but in the future, their significant growth is going to start. Therefore, buying property in Spain is a profitable investment.