Once you have decided to buy a property in Spain you should follow the two Golden Rules:
1. Choose an Estate Agent.
2. Find a Lawyer to Advise and Assist you.

The Estate Agent
Once you have chosen the right Estate Agent with experience and knowledge of the property market, he will help you to find a suitable property. The agent will show the finest selection of property advising as to the best areas to invest in, comparing prices and qualities.

You should ask for details of the outgoings payable every year to maintain the property, namely the Annual Real Estate Tax (1131), the community fees, the charges for rubbish collection, the water rates, the electricity charges and the Property Income and Wealth Tax in respect of the property you wish to buy.

When you have made a decision as to the property you want to buy you will be asked to make immediate payment of a Reservation Deposit, thereby ensuring that the property is not sold to another purchaser. You will then have a period of between 10 and 15 days to exchange contracts but before doing so, you should seek proper legal advice.

Legal Advice and Assistance
Prevention is always better than cure. From now on until and after completion of the purchase, the lawyer will take care and assist you in all the different steps involved in the transaction. There are many excellent English-speaking Spanish lawyers in Spain. Choosing the right lawyer is your guarantee that Spanish Legal requirements are met, that the property is registered in the vendor's name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities. Your lawyer will negotiate and discuss the purchase terms with the seller's lawyer. The terms should not be limited solely to price but should cover in detail all your requirements like the completion date, the form of payment, etc...

Once you have appointed your chosen law firm they will explain the procedure involved in buying in Spain and the associated costs. The next step after paying the reservation deposit is to evidence the terms of purchase in writing. At this stage the lawyers will draw up the private contract. It is customary to pay a deposit of ten per cent of the price on exchange of contracts, which is not normally refundable if the purchaser defaults. Conversely, if the vendor fails to perform his obligations, you will be entitled to the resolution of the contract and claim damages or either demand the obligatory fulfilment of the contract. Before your lawyer exchanges contracts he will have completed his searches and investigations in the Land Registry in respect of the property.

Finally on the day fixed for completion your lawyer will go to the Notary Public to sign the Title Deed, making the final payment to the vendor who will simultaneously pass over possession of the property to you, handing you the keys. At this stage the sale is completed. Immediately after completion, the notary will fax details of the title deed to the local Land Register to inform them of the identity of the new owner so as to prevent the property being sold twice. In this way the Notary and the Land Register act together to protect and guarantee your interests. You will then have to pay the relevant taxes and have the original title deed submitted to the Land Register for registration of your title. Your Lawyer can also arrange for the transfer to your name of utilities and services such as water and electricity and organise their payment through a local bank.

The purchase of the property will involve the following expenses.

The Fees :
Ø  Notary, who charges according to a fixed scale. His charges may range from € 340 for a property price of € 120.202 to € 601 for a property price of € 601.012.
Ø  Land Registry, as a rule of thumb, 40% of what the Notary charges.

The Taxes :
Ø  If you are buying a re-sale property you are obliged to pay Transfer Tax (ITP) at 7%.
Ø  If you are buying a new property or a property in the course of construction from a promoter, developer or habitual trader, then you should pay VAT (IVA) at 7% plus Stamp Duty at 1%.
Ø  The VAT (IVA) rate increases to 16% if you are purchasing plots of land, commercial premises or garage spaces.
Ø  Plusvalia is a tax levied by the local Town Hall based on the particular area where the property is located, on the surface area of the land, on the catastral value and on the date of the previous title deed. This tax may range from a few thousand pesetas to as much as several million pesetas on larger property with a lot of land. By law the vendor is obliged to pay this tax but it is common practise for the parties to negotiate on who is to assume this liability.

Finally bear in mind that your lawyer will charge fees for his professional services, that normally will range from 1 % to 2 % of the price plus VAT (currently at 16%).