What is involved in buying new or off-plan properties in Spain?
Share this Post
As with all property purchases you will be required to have an NIE number (Tax Identification Number) in order to complete at the notary.
Further the same advice applies as to re-sale properties that you should ask an independent lawyer to check any deposit contract offered to you by an estate agent or developer prior to signing it. These deposit contracts are usually brief documents which are signed in order to remove a new property from the market. The amount of the deposit can vary, but they are normally in the region of €6,000. It is also important that proper receipts are obtained in order to accredit payments on signing more detailed reservation contracts and the final purchase deed at the notary.
The following documentation will need to be checked by the buyer’s lawyer:
- Proof of title of ownership of the site of the developer. This would be in the form of a ‘Nota Simple’ from the Land Registry.
- Proof of works licence from the Town Hall obtained from the planning department
- Construction specification ‘Memoria de Calidades’
- Deed of declaration of new works ‘Escritura de Obra Nueva’
- Timescales of construction
- Plans of site and those of the electricity, telecommunications and water
- Details of loans and guarantees
- Details of insurance to cover future defects
- Prior to completion the ‘First licence of occupation’ will need to be produced by the developer.
Further to the signing of the initial deposit contact, a more detailed purchase contract will need to be entered into which will specify in detail the documentation listed above and also the staged payments required to by paid directly to the developer by the buyer. These payments are protected by a guarantee, which means that should the development not be completed and delivered to the buyer, the monies made in staged payments will be returned to the buyer even in the event the developer goes into insolvency.
The costs involved in the purchase are that the buyer is responsible for the notary and land registry fees on completion. The tax applied is VAT at 10%, but this is usually integrated in the total cost of the property.
If you are looking to purchase a new or off-plan property in Spain, it is advisable to seek independent legal advice at the earliest opportunity in order to check documentation and negotiate terms on your behalf.