What do I need to buy in Spain?

What is Needed when Buying a Property in Spain?

And how much will I be paying?

Power of Attorney (POA)

Firstly, we will be going over what is exactly needed when buying a property in Spain. To begin, we always recommend making a Power of Attorney (POA). The power of attorney is a handy working tool for lawyers that are guiding you through the process of buying a property in Spain. It allows us to act on your behalf whilst you’re back in your own country.

A power of attorney is based on clauses. Clauses can be added or taken out, so this power of attorney is up to you as the client to take or add as you wish. When SGM draw up a POA we usually put in these specific clauses; Buying and Selling in your name, opening, or closing bank accounts, applying for a mortgage, applying for the NIE numbers, naming your fiscal representative, contract or change contracts of water and electricity, sign public or private documents and obtaining your digital signature.

NIE Number

Crucial and obligatory, we will need to get your NIE number. An NIE number is your fiscal number here in Spain which is obtained at a National Police station. The NIE number is an individual number for the rest of your life. If no POA is given, then you will have to go to police station in person. With the POA we can go and do this for you, which saves you time and hassle.

Bank Accounts

Bank accounts in Spain to buy a property are not necessary if you are in the EU and if your respective country already deals in EUROS. All payments towards the property need to come out of the account of the buyer and afterwards the direct debit can be put in the account of your respective country if it is in EUROS. If the respective country does not deal with EUROS it is obligatory to open a bank account in Spain which is something we can do with the Power of Attorney.

Costs

Regarding the costs of buying a property in Spain. It’s important to distinguish between new build properties and resale (pre-owned) properties.

First, we will be talking about the new build properties. It is safe to say that on top of the sales price a percentage of 13-14% should be added. If we break this down, it comes down to 10% of IVA (VAT). And the other 3-4% consists of Notary fees, land register fees and the AJD tax. The AJD tax is a tax on notarial acts to be paid to the public administration through the different autonomous regions depending on where the property is located, the amount can vary between 1 and 2%. On top of these costs, you also must pay for the Power of Attorney and the NIE number and the registration of the NIE numbers. Again, all these costs add up on top of the sales price to about 13-14%.

With a resale property the breakdown is a little different. To start the 10% is not IVA (VAT), instead it’s called Property transfer Tax. This is a tax that varies between 6 and 10 % depending on the regulations of each autonomous community; in the Valencian community it’s 10% and 8% in Murcia for example.
Apart from the property transfer tax, the rest is the same; Notary fees, Land register fees, the AJD tax and the NIE numbers.

Mortgage

If you apply for a mortgage here in Spain, the costs will naturally be a little bit higher. It’s also worth knowing that if you’re getting a mortgage here in Spain, you will have to go to the notary two separate times. The first time is to go over the conditions of the mortgage and this is approximately 10 days before the signing of the deeds.

If there is a power of attorney in place, we can obviously do this for you and you can just come to Spain, collect the keys from us and enjoy your property under the sun here in glorious Spain.