Once you find the right property, a reservation document should be formalized with the vendor, in order to take the property out of the market until the due diligence and legal searches are finalized, if you are buying a resale property, or until the Building License is granted, if you are buying an off-plan property.

The signature of this document involves the payment of a reservation amount of approx. 6.000 – 10.000 €, and includes the main conditions of the purchase: the parties, the property, the price, the paying method, the limit date for the signature of the private purchase contract and the limit date for completion.

Properties are sold free of charges and expenses, and all the expenses and taxes of the acquisition are paid by the buyers (taxes, notary fees and land registry fees), except the Plusvalía tax, that is paid by the vendor.

Regarding the taxation applicable to the acquisitions, off-plan properties are subject to 10% VAT + 1,2% Stamp Duty, and resale properties are subject to 7% Transfer Tax.

The Private Purchase Contract (PPC) should be signed after receiving a positive result of the legal searches, or when the Building License is obtained (if buying an off-plan property).

This document involves the payment of the 10%-30% of the price, and establishes in detail all of the conditions of the acquisition and the penalties and compensations in case of a breach of the contract by any of the parties.

As the property is sold free of charges, the vendor is obliged to cancel at his own expense any mortgage or debt before or simultaneously to the signature of the Title Deed.

When buying an off-plan property the developer is obliged to deposit all the amounts paid on account of the price in a special bank account, as well as to hand over to each buyer an individualized bank guarantee, to ensure that the amounts paid on account of the price will be reimbursed if the construction is not initiated or if it is not finalized in time.

Notary Public, against the delivery of the keys of the property and the payment of the rest of the price.

After completion, taxes must be paid and the Title Deed will be registered in the Land Registry. In addition, supplies (water, electricity, wi-fi, …), community of owner’s fees and IBI tax (property tax) and rubbish collection will be changed and direct debited into the new owner´s name.