Undoubtedly, buying your new home in Alicante is synonymous with starting a life project at a key moment. And whether it is for a second home or to live there all year round, anyone interested in buying needs to be fully informed, to know the buying process, its phases, costs and other information that will facilitate the purchase.
A detailed buying guide like the one you have in front of you can be a good tool with which to start this exciting journey towards the home of your dreams.
Financing?
Before you start looking, you should calculate your budget. If you do not need financing, you should have approximately 16% of the price of the house value available for incidental expenses. If you do need financing, be aware that banks rarely lend more than 80% of the selling price of the house. So be sure to set aside the remaining 20% plus mortgage fees.
Also, bear in mind the ancillary costs of the sale and purchase, namely:
- Transfer Tax or VAT (10% in Alicante and variable in Ibiza).
- Notary fees and property registry fees (these are the costs of handling the deed of sale at around 0.8%, which include notary fees and the costs of registering the property in the Land Registry).
- Estate agency fees, if you decide to contract one (variable, around 5%).
- Estate agency fees, if you choose to request these services (variable).
Which location is best for me?
Having already considered the budget and the provision of funds (a subject that we will expand on later), it remains to be seen where you want to live.
The geography of Alicante welcomes you: a destination where you will integrate immediately for its quality of life, its beaches and natural landscapes, its gastronomy and festivals, its emblematic places, its inhabitants and for those spectacular 300 days of sunshine a year.
An infinite number of places to go for walks, do sport or relax await you. You can also enjoy the unique conditions for teleworking, just a stone’s throw from the airport. The most common search channel is the Internet, although you can also take a walk through the areas that interest you and note down the telephone number of a house with a ‘for sale’ sign.
We recommend that you take your time and note down the advantages and disadvantages. There are those who prefer to live on the beachfront, or in an urbanisation with a private swimming pool, or those who wish to live in a village or in the mountains, near schools, golf courses… the variables are many and can be combined according to your profile.
Paperwork, come on!
The house is free, for sale, and it is time to negotiate. It is also time for the parties to reach an initial agreement. It’s time for the paperwork. Before moving forward, make sure the property is properly registered and up to date with payments:
- Check the property’s registered ownership and tax charges. Simply request a nota simple from the relevant land registry. This document includes the description of the property, its location, surface area, share in the horizontal property (if applicable), mortgages that may encumber it, seizures, easements, possible litigation on the property, tax affectations and, in general, any circumstance that affects the property.
- Go to the local town hall and confirm that there are no urban planning problems of any kind.
- Find out whether the property is subject to community fees and how much is paid annually in municipal taxes such as the rubbish tax or property tax.
The first legally binding document is the reservation or earnest money contract, in which the buyer pays an agreed amount (usually 10%) to make the purchase process serious.
By means of this document the parties (buyer and seller) agree on the conditions of the real estate transaction. The buyer will give the property owner a sum of money as a down payment or ‘deposit’, an amount that will remain on account of the final price.
In this contract it is also agreed:
- Maximum period for the formalisation of the purchase-sale before a notary.
- Expenses of the Deed of Sale and Purchase: Although the Law establishes the way in which the expenses of the sale and purchase are to be paid, the parties may stipulate different formulas if they consider it appropriate.
Let’s go to the Notary – it’s getting closer!
The transaction is formalised with the signing of the deed of sale before a notary, in the presence of all the parties or their legal representatives. The purchasers have the right to choose their notary, as they bear the costs of formalising the deed.
The intervention of the notary is to give authenticity to the content of the document, so that what is declared before the notary will be recorded in the deed, which will serve as proof of the fact that motivates its execution and of its date.
The deed is equivalent to the handing over of the property and the amount of the price is handed over to the seller in the presence of the notary. At this point you will have the keys to your new home.
Once formalised, the notary’s office will provide the parties with a simple copy of the deed. The buyer will need it in order to register the utilities in the property (electricity, water, natural gas…).
To be taken into account for Non-Resident buyers
If the buyer is a Non-Resident in Spain, he/she will have to carry out a series of formalities and procedures before formalising the deed before the notary:
- Obtain the foreigner’s identification number (N.I.E.) necessary to be able to formalise the purchase of the property before a notary public.
- Open a current account in a Spanish bank. This account will be used to make the payments for the purchase and the expenses necessary to carry out the purchase, including the payment of municipal taxes, community fees and utilities (electricity, water or gas).
You will also have to ask the bank to prepare a bank cheque which you will hand over to the owner, in the presence of the notary. Obviously, the sums paid in advance when making the reservation or earnest money contract will be deducted.
On the day of the signing at the notary’s office, you must have previously made the various transfers and present proof of payment, as the notary’s office is responsible for paying all subsequent taxes and fees.
With the title deeds in hand…
Once you have acquired the property after signing the title deed, you have to take into account certain requirements from the authorities, such as the payment of taxes, the registration of the title deed in the public registers or the notification of the change of ownership of the property.
The buyer is obliged to notify the competent town hall of the transfer of ownership by submitting an uncertified copy of the title deed so that the town hall can collect the capital gains tax (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana).
Congratulations, you are now a property owner!
