Legal Advice

Once you have found a property, the purchase can go ahead. We can recommend lawyers who will explain everything to you in detail but the following guidelines will inform you what happens and of basic costs involved when putting a purchase into place.
You should ask for details of the outgoing payable every year to maintain the property, namely the Annual Real Estate Tax (IBI), the community fees, the charges for rubbish collection, the water rates, the electricity charges and the Property Income and Wealth Tax in respect of the property you wish to buy.
When you have made a decision as to the property you want to buy you will be asked to make immediate payment of a Reservation Deposit, thereby ensuring that the property is not sold to another purchaser. You will then have a period in which to exchange contracts but before doing so, you should seek proper legal advice.

Other Charges

• Notary, who charges according to a fixed scale, their charges may range from 56.619Ptas for a property price of around 20.000.000 Ptas to 100.000 Ptas for property price of 100.000.000 Ptas.
• Land Registry, as a rule of thumb, 40% of what the Notary charges.

The Taxes:

• If you are buying a re-sale property you are obliged to pay Transfer Tax (ITP) at 6%.
• If you are buying a new property or a property in the course of construction from a promoter, developer or habitual trader, then you should pay VAT (IVA) at 7% plus Stamp Duty at 0,5%.
• The VAT (IVA) rate increases to 16% if you are purchasing plots of land, commercial premises or garage spaces.
• Plusvalía is a tax levied by the local Town Hall based on the particular area where the property is located, on the surface area of the land, on the catastral value and on the date of the previous title deed. This tax may range from a few thousand pesetas to as much as several million pesetas on larger properties with a lot of land. By law the vendor is obliged to pay this tax but it is common practice for the parties to negotiate on who is to assume this liability.
• Make sure that you are aware of any potential building around the particular plot you are looking at and remember that "green belt" land in Spain can very often have that status lifted.
• A tumble down house may seem an attractive prospect to modernise but make sure you are aware of all costs, planning permission needed to renovate etc. before making a decision.
• When buying a property still under construction, the developer is legally required to provide an insurance policy, or bank guarantee which will protect your payments in the event of the work not being completed.
• Having your deposit available in a Spanish bank normally assures both the agent and the vendor that you are a serious buyer. Using your discretion is paramount.
• Always bear in mind the investment you are making and that one day you may wish to realise this investment. It is therefore important to look at the re-sale value of the property.
• All legal matters should be discussed fully with a lawyer - either your own appointed lawyer or one recommended to you by your agent. Never be afraid to ask questions and never sign anything unless you fully understand it.
• Finally, bear in mind that your lawyer will charge fees for his professional services normally at 1% of the price plus VAT (currently at 16%).

	To summarise the above, the total cost of all charges and taxes will be approximately 8% - 9.5% of the purchase price of the property.

What Next?

Once you have purchased your property, the next stage will depend on your situation and reasons for buying property.

• If you and/or your family intend to live in the property on a full time basis:-
• If you and/or your family intend to live in the property on a part time basis:-
• If you and/or your family intend to only use the property for holidays:-
• As (3) but intend to also let it when you are not here.
• If the property has been selected and purchased simply as an investment so it either may be sold before completion (in the instance that it is under construction at the time of the purchase) or let out to gain rental income.

Spanish law governing taxation of real estate owned by non-residents of Spain is very complex and before deciding on any course of action it is advisable to consult your lawyer who may in turn recommend a dedicated fiscal advisor. At Costa Tropical Properties we offer a full after sales service and an in-house property management and rental division dedicated to looking after our clients' properties to the highest possible standards and ensuring that competitive rental incomes are gained. Costa Tropical Properties  offer a selection of services to suit your needs;

Management only :caring for your rental properties between your visits
Management/rentals :enabling to secure an income whilst caring for your property
Part management/rentals :for the part of the year you wish to rent out
Premier property management :tailor made by way of personal consultation

	All services include: -Regular inspection checks -Regular security checks -Unique key holding service For further details, please contact us.