BUYING PROPERTY ON THE PRIMARY MARKET - 3 STAGES
RESERVATION AGREEMENT
The purpose of the reservation contract (contrato de reserva de vivienda), as its name indicates, is to secure a reservation of a particular property and is the first step in the property purchase process. The client of the real estate agency pays a certain amount of money to the agency's deposit (customarily €6,000). For more expensive properties, the amount can reach tens of thousands of euros. The contract includes such information as the buyer's data, basic details of the property and the payment schedule.
Developer's agreement (generally signed within a month of signing the reservation agreement). It is customary to pay 40% of the transaction value. This is a very detailed contract, to which, in addition to the previously mentioned information, technical plans of the property are attached. Such a contract must also include a bank guarantee. This is a guarantee of the return of funds to the buyer, if the developer for some reason would withdraw from the transaction.
Important!
In Spain, all prices quoted by the developer are net! Therefore, tax must be added to the price.
Contract of purchase - sale (notarial contract). This is a contract in the form of a notarial deed, where, after paying the rest of the funds, the keys to the property are handed over to you. The buyer, in addition to the notarial fees (registration in the land registry, registration of the new owner), is required to pay VAT (IVA - Impuesto sobre el Valor Añadido). The standard VAT rate in Spain when buying a property is 10%, while in Andalusia it is 7%. At that point, you also have to pay the AJD (Actos Jurídicos Documentados - tax on civil law transactions (PCC). This tax covers legal actions made in the form of a notarial deed, commercial or administrative document, and the tax obligation arises at the time of such action. It can take the form of a fixed or variable fee. The fixed fee applies to the sealed paper on which the document is drawn up. A variable fee applies when the subject of the act is subject to registration in the Property Register, Commercial Register, Industrial Property Register or Movable Property Register, in which case it ranges from 0.5 to 2%, depending on the regulations of the Autonomous Community concerned.
DEVELOPER'S AGREEMENT
PURCHASE AND SALE AGREEMENT
