Buying Your Dream Property Once you have set your heart on the home of your dreams it is important that you have peace of mind with the purchase procedure and we strongly recommend that an independent solicitor is used in every case. Property in Spain is governed by the Land Registry, a legal body responsible for the registration of documents and contracts relating to property ownership. The Land Registry holds details of property ownership, surface area of land and buildings, property boundaries, confirms the absence of outstanding debts and/or identifies any encumbrances or inherent rights which may affect the sale. Purchasing resale property A reservation document is drawn up which will confirm the purchase price and a date for the signing of the purchase contract. A deposit of around 3,000€ is paid and this takes the property of the market for between 1-2 weeks, subject to agreement by both parties. The private purchase contract is signed and this contains all the details of the purchase including names of the vendor & purchaser, details of the property to be purchased, the purchase price and an ultimate date for completion. A 10% deposit is paid at this stage. Both parties attend the office of a notary to sign the public title deed (the Escritura. It is the notary's function to ensure that everything is correct with the title deeds, the registration of the property and that the property is free of any encumbrances or charges against it. The balance of the purchase price is paid the ownership is transferred. Purchasing a new property A reservation document is drawn up which will confirm the purchase price and a date for the signing of the purchase contract. A deposit of between 3,000 -8,000€ is paid and this takes the property of the market for approx 28 days subject to agreement by both parties. The private purchase contract is signed and this contains all the details of the purchase including names of the vendor & purchaser, details of the property to be purchased, the purchase price, date for completion of the building work and handing over of the property; the structure of stage payments, guarantees from the developer regarding stage payments and any penalties for late completion. Once the property has been completed both parties attend the office of a notary to sign the public deeds. The balance of the purchase price is then paid and ownership transferred. It is helpful to be aware of the obligations on new developments including: 10 year insurance against structural defects 3 year insurance guarantee for the proper functioning of technical installations 1 year insurance guarantee against minor faults and repairs. Guarantee of the amounts paid during construction by insurance or bank guarantees The costs for buying a property Transfer tax/VAT - When buying a resale property there is a transfer tax of 7% of the declared value of the property. Notary & Land registration fees - these are calculated as a percentage of the purchase price. Plus Valia (local town hall tax) - this is calculated on the increase in value of the property since any previous change of owner. Rates are set by each town hall. Although legally a charge to the vendor, this cost may be passed to the purchaser by agreement. Also allow for solicitors fees and if taking a mortgage there will be notary & registry fees plus the bank charges incurred. You will need to allow an extra 10-12% on top of the purchase price to cover these costs.