Legal and Finance
Purchase process of a new build property
The purchase of new-build residential properties (villas, townhouses, apartments) in Spain exists in 2 modalities:
1. off plan,
2. after the completion of the construction.
Buying off plan means that the reservation of the property can happen even before the start of construction works. The purchase contract is usually signed when the works have already started.
The purchase of a completed new build means buying a property already built and ready to move into.
The benefits of buying off plan are as follows:
1. the possibility of choosing the best property for being first;
2. the best price (usually as the construction work progresses, developers increase the prices);
3. the possibility of adapting the house to your needs and wishes (if the developer allows it and the works have not yet started or are not yet too advanced).
In comparison, the benefits of buying a completed new build are the following:
1. the possibility of seeing the house before buying;
2. the absolute certainty that the property is already built;
3. possibility to use the house immediately.
A foreigner buying a property in Spain needs to take the following steps:
1. obtain a foreigner’s identification number (NIE) – it can be done either in Spain, or at the diplomatic representation of Spain in person’s country of residence;
2. open a bank account in Spain to make all the payments during the purchase process and then pay the taxes and monthly expenses related to the property.
The purchase process begins with choosing the property.
To choose the property one needs to know the available budget and the type of property they are looking for (a villa, a townhouse or an apartment).
At first we will send to you several options by email to choose fromas and as the next step we either visit the projects in person together with you or we show you the property through a videocall in case you cannot visit us.
Apart from the technical and visual characteristics of the property, it is important to verify that the developer is the owner of the land plot where the house is built and that the developer has the construction license to build the property. If buying a finished new build, it is important to check if the first occupancy license has been issued.
If buying off plan with advance payments during the construction process, it is important to check that the sums paid until the signing of the purchase deed are guaranteed.
When you have chosen the property, the developer provides a reservation contract to be signed. Together with the signing of the reservation contract, one pays the reservation sum (normally EUR 6,000 – EUR 10,000 + VAT 10%, but the amount may vary). Usually the developers prepare the contracts in several languages (Spanish – English; Spanish – French; Spanish – Russian) to adapt to foreign buyers.
If you buy the property off-plan, usually within a couple of months after the signing of the reservation contract or when the construction works have already started, the private purchase contract is signed. During the construction process, if duly agreed, the buyer pays the installments of the purchase price of the property.
When the construction work is finished, the developer has obtained the first occupancy license and is ready to deliver the property to the buyer, the public deed of purchase is signed before a notary and the buyer makes the remaining payment of the purchase price in a form of a check. At the same time, the developer hands the keys of the property to the buyer. With that moment the buyer is considered the owner of the property, being subject to the rights and obligations that may arise.
To finalize the process of acquiring the house, the expenses related to the purchase transaction are paid (approx. 2% of the amount of the sale, including notarial expenses) and the new owner in registerd in the Property Register. Simultaneously the new owner concludes contracts in respect to the water, electricity and gas supply, etc. with the respective providers and respective authorities are informed on the ownership change for the real estate tax (IBI) purposes.