Buyers guide

Property Buyers Guide

When you purchase a property in Marbella we always recommend our clients to use a local lawyer who have knowledge in the Marbella area. Please read our property buyers guide below for more detailed information.

The purchase process is slightly different depending on if the property is existing (resale) or an “off-plan” new development. Both are secure processes if done through a lawyer. We can recommend and arrange both lawyers and different mortgage option for you.

Resale:

Step 1: Make an Offer
When you have found a property that you prefer we will advise on a realistic offer.

Step 2: Pay the Reservation Deposit
It is usually advisable to pay a reservation deposit, that average from 6,000 euro for a lower priced property to a larger, negotiable figure for higher budgets. This deposit is to secure the property at the agreed price. Should you then change your mind, for no particular reason, 100% of the deposit can be withheld by the seller. This is to cover the seller’s inconvenience of having missed the opportunity to find another buyer or having started to plan the move himself. Should however, the seller changes his mind the whole 100% is refunded to you.

Step 3: A Private Purchase Contract
This is a legal contract which will be prepared by lawyers, usually within 3 weeks of paying the reservation deposit. It is your commitment to buy the property and normally a deposit of 10% will be required. While preparing the contract the lawyer will conduct searches to establish property ownership, land registry, freedom from debts etc. Once this contract is signed and the money paid, there will be no money refund if you should change your mind, unless the lawyer later discovers a problem with, for instance the property ownership. Should however, the seller changes his mind, the money will be refunded.

Step 4: Signing the Title Deeds
This is called the ‘escritura’ in Spain and is the full and legal title of ownership. It will usually be ready within 2 to 4 weeks of signing the Private Purchase Contract depending on whether there are more extensive searches needed, like when buying land from a number of owners. The signing will be done with your lawyer present and in front of a Notary, an official of the state, who will check all aspects of the purchase and ensure you fully understand and agree to all details. Before signing, the remaining balance has to be paid as well as Notary fees, land registry costs and anything else due.

New Developments:

Step 1: Select a Property
When you have chosen a particular development, we will help you select the most appropriate unit. Whether it is for your own use, rental or re-sale, it is important to consider the cost per sq meter, orientation, views, when the development is complete etc.

Step 2: Pay the Reservation Deposit
The same process as for Resale

Step 3: A Private Purchase Contract
The percentage can vary with the different developments. 30% plus IVA (VAT) is most common. Sometimes stage payments are due at specific points of construction, like when the roof is put on. The lawyer will ensure that bank guarantees are in place so your payments are fully secured. In other respects the same apply as for resale.

Step 4: Signing the Title Deeds
This will take place at the completion of construction, normally 18 to 24 months from start of construction. You will view the property before signing for ‘snagging’. The signing will be the same as for resale. If your strategy is to sell before completion, to realize the profit between the pre-construction price and current price, we will plan the resale with you and the new buyer will do the completion.

Some key tax and cost issues:

It is always important to go through the full tax and ownership options before acting. Here are some basics to keep in mind:

• New constructions carry 10% IVA (VAT) on all stages of payment
• Notary and Registry fees are set by law and according to a sliding scale. Both fees together are app. 1,5% of the purchase price.
• Resale is between 8-10% depending on the purchase price, but it is ITP, a transfer tax. From 2021 and until furture notice from the goverment the transfer tax is 7%.
• IBI is an annual real estate tax, usually 0.3-1,3% of the assumed value of the property from  the town hall.
• Resident in E.U. or E.E.A.: 19% as from 2016.
• Non-resident in E.U. or E.E.A. (rest of the world): 24%
• The rubbish collection fee (basura) is usually between 70 and 200 euros per annum.
• If the property is part of a community, which most apartments, townhouses and some villas are, there will be an annual community fee set by the community committee. This fee will cover gardening, pool maintenance, security, building maintenance, cleaning of the community communal areas etc.