1.- RESERVATION AGREEMENT
Normally the purchase is initiated with a reservation agreement,
which takes the property off the market (providing the Reservation Agreement is properly signed). The deposit you pay at this stage could be anything between 10 to 15 % of the purchase price. At this moment, ABACO LEGAL, have checked the registration of the property which will show if there are any charges against it, and the correct ownership of the vendor at the Register office.
2.- PRIVATE CONTRACT OF PURCHASE AND SALE
Within a week or two a private agreement is signed between the purchaser and vendor
and at this stage you pay normally 10% directly to the vendor. The purchaser´s lawyers should determine licence of building, all outstanding debts and rates in order to arrange the payment of these according to the agreement, these could be municipal rates (I.B.I.), community fees, electricity and water bills.
3.- TITLE DEED
Finally the completion takes place in front of a Public Notary,
who issues the Title Deed "escritura". The Title Deed should then be registered by the lawyer in the corresponding Land Registry.
Additional costs to the purchase price.
The law states that the vendor should pay what is known as "plus valia municipal" (a municipal tax every time the property changes owners.
All other costs are paid by the purchaser. However, many vendor´s expect the purchaser to pay for their plus valia municipal and whether or not this is the case should be established from the outset as this may need to be added to the purchase price.
Lawyer's fees for purchasers are usually 1-3% of the purchase price plus VAT.
Notary and Registry fees combined (where there is no mortgage involved) are typically 900 € on a 150.000 € property and 1.200 € on a 300.000 € property.
First-hand (new) homes pay 7% VAT plus 1% Stamp Duty and second-hand homes pay 7% Stamp Duty and no VAT.
For example second-hand property purchased by a private individual:
- Advertised purchase price 200.000 €
- Pay Vendor's 'Plus valia Municipal 1.500 €
- Lawyer's Fees and VAT 2.320 €
- Notary & Registry Fees 800 €
- Stamp Duty 12.000 €
- TOTAL 216.620 €