Below you can find a short introduction to some of the most important initial financial elements of buying an off plan property in Spain. We can highly recommend seeking further advice about both the financial and legal areas of buying a property in a new development (see also Accom Services).

Mortgage Loan
If you need a loan to finance the purchase of a new property in Spain you will first of all have to decide whether you want to finance the purchase with the mortgage provided by the promoter or you prefer another Spanish bank or a bank in your own country.

The mortgage offered by the promoter is the easiest way to finance the purchase but it is not always the best. Many times the conditions are not very favourable and the mortgage is set as a percentage (normally between 60-80%) on the initial purchase price and not on the value of the property at the moment the property is handed over. As the price increases during the construction you will in many cases be able to get a higher percentage by using another bank which will make the final valuation of the property before the handover.

A mortgage in Spain is secured in the property and are long-term loans about 20-30 years. To obtain a mortgage the bank will normally ask for copies of your passports, either payslips or proof of savings, sale contracts and copies of the title deeds. Apart from this the bank (if it is not offered by the promoter) will need to send a “tasador” (a professional appraisal) to set the market value of the property.

If you are interested in further information about mortgage loans or other financial issues please Contact Us.

Payment Process
The payment process when buying off plan properties is similar in most developments. If you buy at least 6 months before the hand over the payment process is like this:

When you have found a property you are interested in you will first have to pay a deposit which is normally about 3000-6000Eur to take the property off the market.
A month after this payment you will have to sign the private contract and also pay between 10-20% of the property price.
During the construction of the property you will have to pay monthly or quarterly payments reaching a total of 10-20% of the price (in some cases theses payments are due according to different stages of the construction of the property).
The outstanding amount is thereafter due to be paid upon signing the title deed or can be taken over as a mortgage.

When buying a property in a development that is nearly finished it is custom to only make two initial payments – a deposit of about 6000Eur and then 20-40% when signing the private contract and then the outstanding amount or mortgage upon signing the title deed.

Other Initial Costs
Apart from the price of the property there are some other initial costs the buyer has to pay when purchasing a new property in Spain.
The initial cost of buying a property in Spain is about 10% of the total price. Below you can find a short description of the different cost involved in a property transaction.

To buy a new property the buyer has to pay VAT and a stamp duty, which is 7.5% (7% VAT and ½% stamp duty).
The buyer will also need to pay for the new official title deed ‘la escritura’ stating who is the owner of the property. This is made by a public notary and the price is about 500€ depending on the price of the property. All properties in Spain also have to be registered in the ‘Registro de Propiedad’ and the deed need to be changed into the new buyers name, which costs about 400€.

Apart from the above obligatory costs there are other costs, which will increase the total amount.
It can always be recommended to seek legal help and advice from an independent lawyer before you sign the final contract. The cost of this assistance is about 1% of the property price.
If you need a mortgage loan to finance the purchase there is normally a 1% application fee charged by the lender (this is 1% of the mortgage, which is about 0.7% of the total price).