Purchase of a Spanish property

Every year Scandinavian Management assist and council several hundreds house buyers on Costa Blanca. We have a tight knit cooperation with well-known estate brokers in the area, banks and insurance companies.

To check when purchasing a new build property

  • Commercial register; Information about the constructor/seller.
  • Municipal; Applying for permits and having them granted.
  • Cadastral; Is the land the property owned by the constructor/seller, and if that is the case; are there any mortgages.
  • Constructor/seller: Ask for a copy of the insurances that the law demands.

To check when purchasing property on blueprint

  • The architect’s blueprints and building permits.
  • “City planning” (Cedula urbanística); to see that the offered corresponds with reality. Are the green belts, tennis courts etc. “commons” for the owners?
  • The seller should guarantee, with insurance our bank guarantee, all à conto payments until the title deed is signed.

Costs when purchasing directly from the constructor

When purchasing directly from the constructor you will pay, beyond the purchase price, 10% VAT to the constructor. Observe that if a garage is part of the purchase the VAT is 10 % for this as well. If you purchase a garage separately, the VAT will be 21%.

Other costs include notary, cadastral and stamp tax* 1,5 %.

Plus-Valia is a Spanish tax and can be compared to a sort of capital gains tax to the municipal (It is the lands value increase from buy- to sale, which is taxed). This tax is to be paid by the seller by law.

To check before second hand purchase of property

  • Cadastral (certificate of ownership); of which defines who the owner is and whether or not there are any mortgages in in terms of bank loans etc.
  • Homeowner’s compound or private housing cooperative; that all fees are paid. If not the buyer will be responsible for payment.
  • Municipal; that the municipal property tax is paid. If this is not paid the buyer might become responsible for payment retroactively even here.
  • The bank; bank loans on the property must be paid and the bank must sign a separate title deed which will be registered in the cadastral. This has some costs associated with it that are paid by the seller.

3% of the purchase price is due to the tax authorities!

When buying a second-hand property, the buyer is required by Spanish law to pay 3% of the purchase price directly to the Spanish tax authorities (as a deposit for the seller’s capital gains tax). If this is not done, the buyer will be responsible for the seller’s capital income tax against the Spanish tax authorities. This does not apply if the seller is a Spanish citizen or PERSON who has a taxable domicile in Spain.

Costs of title deed on a property bought in second hand.

Notary cost, property register and 10% in stamp duty *.

* The information relates to the Costa Blanca, the state of Valencian Community