How To Buy A Property In Spain

Monday, May 18, 2020

In the previous article here we explained what factors to consider before investing in rental properties in Spain. Now you will find out the exact procedure involved in purchasing a property in Spain.

If you are a first time buyer the process may seem complicated, because there is quite a few requirements in the Spanish law, but step by step and your desired property will soon be yours.

Contact an agent

Evidently the first step is finding a property, and what better and faster way to do this than by contacting a reputable estate agent who has numerous listings and will surely do their best to help you find the property you have in mind.

Make sure your agent know exactly what kind of property you are looking for. Whether you are looking to purchase your dream beachfront villa to spend the rest of your life in, or looking to invest into real estate and buy a property you intend to use for short or long term rental. Your agent must be informed of the purpose of purchase, preferred location, property type (villa, apartment, townhouse etc), specific requirements (orientation, private garden with pool etc) and most importantly what budget you have available.


If you've found the perfect property matching all your criteria and of course budget, then happy days! The next step is to reserve your property and take it off the market.

You will be required by law to sign a reservation contract which confirms your interest in the property and immediately takes the property off from all listings. This contract must also include the vendor's signature.

The reservation contract includes all terms and conditions of the sale as well as the following details:

-Full name of buyer

-Full name of vendor

-Property Address

-Agreed Price

-Estimated signing date for Private Purchase Contract (PPC)

-Estimated signing date for title deeds

-Additional information (for example regarding furniture inclusion)

This contract will also stipulate the deposit which must be paid at this point, usually to the agent and is commonly €6,000. This amount will be deducted from the sales price upon completion of the remaining paperwork.

Signing a Private Purchase Contract (PPC)

With your future property reserved you are another step closer to holding the keys of your property. The next step is to sign the PPC which is a very important milestone for each buyer as it signifies full commitment on your part.

As soon as your lawyer has completed his/her due diligence and all other legal affairs are in order, you will be ready to sign the Private Purchase Contract which outlines the terms and conditions of the purchase and specifies an exact date for signing the last element of paperwork - the title deeds at the notary.

At this stage, you must also be prepared to pay a percentage of the purchase price upfront in addition to the reservation fee we already mentioned earlier. For this payment you can expect to be 10% for resale properties and up to even 30% for a new build property.

It is very important that you have organised a budget to finance the property by the time you sign this contract. Whether you simply have sufficient funds available or require getting a mortgage loan.

We must advise you that if you pull out of the sale after signing the PCC for any particular purpose, you will lose the 10% you have already put towards the property. On the other hand if the vendor pulls out at this stage, you will be fully reimbursed and also receive an additional 10% as compensation.

Signing the title deeds at the notary

Going into the final phase of purchasing your property in Spain, you must sign the title deeds known as the escritura pública in Spanish – before a notary. This is done to inscribe the property into the land registry and legally transfer ownership of the asset. To be exact, you the buyer or your lawyer is required to visit the notary twice: once at least a day before the title deed signing and then again to sign the deed.

As you might have guessed, this final phase also holds associated costs, including fees for the notary, administration, legal representation, land registry inscription and a transfer tax. However on the good hand, thanks to improvements in relation to Spanish mortgage law, your bank is now obliged to pay all the stamp duty and land registry costs, as well as 50% of all notary and administration fees, if you have a mortgage loan in place.

If you are a cash buyer looking to buy a resale property, be prepared to set aside 10%-10.5% of the purchase price at this stage of the process. If you have a bank loan, you can expect to save around 3%, thanks to the levies we already mentioned above. However on the other hand for new build properties, this percentage rises to around 13.5%, regardless of whether you are a cash buyer or buying the property with a mortgage.

The keys are yours!

After the whole bureaucracy is done, you will leave the notary with a document serving as a copy of the title deeds (the official document can take up to a month to be lodged) - so you can verify that you are the new home owner of your property and can go ahead with setting up bills etc.

As you can see, step by step and your desired property is now yours and you can move into your dream home or prepare your new property for short or long term rental and make your investment pay you back.

Need a partner on site?

At Lux Estate Capital Group we specialise in investing in real estate in Spain. We purchase luxury properties in the best locations in Marbella with high rental potential and transform them into profitable rental businesses with their own client base, branding and more, which we then sell to private and corporate investors. If you're looking for a cash flowing investment in real estate speak with us.

If you're looking to purchase a property to live in we can also help you find a suitable property within our luxury property sale department - Lux Estate with numerous private villas, modern apartments and more. Don't forget if you have any other query we will surely be able to assist you when dealing with vendors or others, with our team of experienced professionals including lawyers, developers, architects, agents and more.

We hope this article helped you and now you know more about the process involved when purchasing a property in Spain. We also look forward to do business with any of you in the future.

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Monday, May 18, 2020