Process of buying a property (the contract)
Once you have found the property of your dreams, a contract will have to be drafted and you need to make provisions for the deposit. The standard deposit is 10% of the purchase price. The deposit is payable upon signing a Purchase/sale Contract or an Option Contract (“Contrato de Compraventa” o “Opción de Compra”), which will include a completion date and transaction conditions which usually contains an assurance by the vendors that the property is sold free of charges, tenants and mortgages. In order to secure and guarantee the prospective purchase, we strongly recommend that a solicitor deals with the drafting of the Option Contract or Purchase/sale contract.

Once both parties have signed this contract and the deposit has been paid, you have secured the property. This is a binding contract for both sides with penalties for breaking it or for failing to honour the terms of the contract.

After you have signed and paid your initial 10% deposit on the property, it is imperative to review the important legal details. Check the receipt for the paid Rates (“Impuestos sobre Bienes Inmuebles” also known as “I.B.I.”), which is the annual real estate tax. This receipt gives the all important “Valor Catastral” the official assessed value of the property, on which your property owners Income Tax will be based. Check with the Town Hall that the I.B.I. receipts have been paid up to date. Any outstanding amount should be requested from the vendor.

Do not buy a Spanish property until you have obtained a current extract of the title from the Land Registry (“Nota Simple”).