Once you have found the ideal property on the Costa del Sol, the next step is to draw up a “Reservation Contract”
A reservation contract is used in Spain as a standard procedure to reserve a property for a specified period of time whilst your lawyer conducts the *Due Diligence”
Typically, the reservation contract would set out the basic terms and conditions of the purchase and would then be approved and signed by both the buyer and the vendor. This is a temporary reservation document only. Such a document would include:
Full name of buyer and vendor
Price of the property
Date to sign a “private purchase contract”
Other special conditions
Deposit amount placed to reserve the property, typically of 6,000 Euro deposit will secure the property while the “due diligence” is being conducted by the buyers lawyer. This reservation deposit is fully refundable in the event that your lawyer should discover any legal impediments pertaining to the said property.
Should you continue with your purchase after the due diligence the 6,000 Euros will be used towards the purchase price.
The next step, as stated in the reservation contract, is to sign the private purchase contract which is a contract between the buyer and the vendor, again typically setting out the terms and conditions of the contract. The contract will be prepared by your lawyer and will contain:
A legal declaration from the vendor that he/she is legally positioned to sell the
The exact address and dimensions of the property and its features as set out in the “referencia Catastral” Government registration of the property.
The completion date and hand over of the keys etc The agreed terms and conditions as agreed buy the consumer and the vendor
The additional buying costs in Spain might vary to a total of 10% to 13.5% with the following breakdown:
-10% IVA (VAT) on NEW properties, 8% to 10% IVA (VAT) on re-sales depending on price category.
-1% Notary and registration fee (Notarization of property cost)
-1% Legal fees (profession fee charged by your selected lawyer to conduct the Due diligence
-1.5% Stamp Duty Tax ( A tax charged to make all documents legally effective)
If you should require a mortgage, you should calculate an average of 1- 1.5% cost for the opening fees and taxes of a mortgage with a local Spanish bank.