You should allow approximately 10% of the purchase price for the expenses of purchase, this is necessary for the following reasons:
1. Resale property ITP tax (Impuesto Sobre Transmisiones Patrimoniales) 6,50%
2. New property 7% IGIC plus 0,75% stamp duty
3. Lawyers fees
4. Notary fees
5. Property registration fees
6. Water and electricity connection
Your lawyer will peruse the option contract and ensure that the terms and conditions are reasonable and legal. Deposits vary but are usually 10-20% of the purchase price for a resale property and around 20-30% for a new property. It is advisable to make arrangements for a deposit to be available on the island during your visit so that you can secure a property should you so wish. In most cases the seller will accept that the balance of the deposit will be sent within a few days of your returning home. The option contract will contain the following information:
1. Details of buyer and seller
2. A legal description of the property
3. The purchase price
4. The form of payment and currency to be used in the transaction
5. The completion dates and penalty clauses if these dates are not met
1. Ensuring the title of the deed (Escritura).
2. Ensuring the title of the property is unencumbered by making a search for debts at the registrar's office.
3. Checking that all I.B.I. (local council's rates) have been fully paid up to date.
4. Collecting the most recent electricity & water receipts.
5. Checking that the community payments are up to date if purchasing a property in complex or building that has communal areas or pool, there is a small monthly fee payable for their maintenance.
6. Arrangements of paperwork for the Notary appointment.
7. Representation at the signing of deeds in front of the Notary.
8. Collection of the deed (Escritura) from the Notary.
9. Payment and calculation of the property both in the Registrar and the local Council.