Buying Residential&Commercial Property Spain

Residential tourism on the Costa del Sol continues to grow at a healthy rate.

The latest forecast from the "Federation Andaluza de Urbanizadores y Tourismo Residential" (FEDUR) is that an estimated 1 million European families will buy a home here over the next 5 years. There are now over 3 million tourism homes in Spain, 1.1 million of them owned by foreigners. Andalucia hosts about 70% of these homes and 50% of the provinces revenue derives from residential tourism. In Torremolinos alone, over 70% of homes are designated as residential tourism. The airline Easyjet carries 45,000 passengers into Malaga Airport each week, 10% are looking for property on the Costa del Sol.

When embarking on the exciting venture of choosing a new home in Spain, there are many things to learn and keep in mind:

Apart from the actual cost of a residential or commercial property or lease, you will need to allow 10% of the purchase price to cover extra fees for the cost of acquiring a residential property or freehold business property. This sum will cover the solicitors fees (1% of the purchase price plus IVA), land registry fees, notary fees, stamp duty and value added tax (IVA). First Choice Spain can direct you towards a lawyer specialising in property transfers.

When you have chosen your new home or freehold commercial business property, a contract (Contrato de Comptraventa) will then be drafted ahead of your deposit payment, normally 10% of the purchase price. A seven-day ‘Reservation Fee' of 2% can be accepted pending the transfer of the full 10% deposit within that period.

The deposit is payable on signing the contract which will state the completion date and all conditions to be observed. It will carry a statement from the seller that the property is free from all debts.

It is very important for you or your lawyer to check the legal aspects and conditions in the contract. There must be a receipt showing that the IBI (annual real estate tax) has been paid for all preceding years. This will show the ‘rateable value' of the property (Valor Catastral). The local Town Hall will levy a yearly 0.7% tax on the rateable value of the property. This can vary slightly according to the location of the property.

Property Owners Income Tax (IRPF) is the owner's income on the property and is calculated from the base of 2% of the rateable value.

Wealth Tax (Patrimonio) is paid once a year and is calculated on the declared value stated in the deed (Escritura). It is charge at the rate of 002% if the value is under 150.253 Euros. A resident has exemption on the first 102.172 Euros.

Buying a commercial property can be by acquiring either the freehold or the lease. With a freehold commercial property, you buy the land, the building(s), the deed and any company business contract that may apply to the property. With a lease contract, you will take over the rental agreement after paying a lease transference price to acquire the business i.e. the seller’s asking price, which will include tax and agents commission. This payment will cover the value of the fixtures, fittings, furniture and equipment etc. owned by the tenant, plus the goodwill existing at the time of the purchase. A lease is normally issued for a stated renewable period – usually five, ten or fifteen years.

It is essential that you obtain as much specialised advice before you enter into a contract to buy or lease a commercial property or business, particularly if you have never owned one in Spain before. At First Choice Spain we can arrange for the existing contracts and licenses for the property and business to be verified either by our appointed legal negotiator (gestor) or by a solicitor/lawyer (abogado) appointed by the buyer.
0034 952 817 369
0034 616 249 972
0034 650 600 496

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