the purchase process guide
step by step process to buy in Spain
Buying in Spain? This guide will walk you through each step and answer many of your questions.
Step 1 - Apply for a mortgage
How much can you borrow?
Maximum 70% if you pay tax outside of Spain
Maximum 80% for Spanish taxpayers (70% on second homes)
The value of the loan will be based on the property valuation or the property price, whichever is lower.
What documents do the banks require?
- Copies of your Passport / NIE (for all parties that will be on the mortgage)
- Your most recent tax declaration or P60
- Your last three payslips
- Details of other properties you own including any potential rental income
- A bank statement of the last 6 month
- An Experian credit report
Who can apply?
Anybody can apply for a loan in Spain over the age of 18, regardless of where you earn your income, pay taxes or live.
The amount you can borrow depends on your income – debts. Most Spanish lenders will not lend money if your combined outgoings (mortgages & loans) add up to more than 40% of your total net (after-tax) income.
We have an in-house risk assessment team, that can help you understand what you can borrow. Get in touch here
What is considered as income?
Banks in Spain will only accept income which can either be shown on a tax return or comes from earnings from a property with rental agreements in place.
there is no charge to apply
Step 2 - Reserving a property
Removing a property from the open market
To reserve a property and take it off the market, you will need a lawyer to negotiate a contract with the agent or seller’s lawyer.
Foxes are a legal company and have in-house English & Spanish speaking lawyers who can negotiate the contract and ensure you are protected.
How much is a deposit
Most agents will accept 3,000 Euros, although for properties over 300k they may ask for 1% of the purchase price?
Is the deposit refundable?
The following are reasons why a deposit would be refundable:
- Subject to finance. You can include a clause that in the event you cannot purchase due to issues with a mortgage, the deposit can be refundable.
- Valuation. If the valuation on the property is below the asking price, you can get a refund or negotiate the price.
- Legalities. If there are any legal issues with the property, debts, licencing issues etc
Each of these clauses should be included in the reservation contract. If they are not included then your deposit may be at risk.
How long is the reservation process?
Generally, it will take 4 weeks to perform all the legal checks, complete the property valuation and ensure you have a firm mortgage offer in place.
The timescale to perform all these tasks will be negotiated and agreed in the reservation contract by your lawyer.
Step 3 - Property Valuation
If you are purchasing the property with a mortgage then a valuation will need to be performed by a 3rd party company which the bank accepts.
The amount the bank lends will be based on the valuation, if it is lower than the purchase price.
Valuations can take between 7-14 days to complete, our team can request this on your behalf.
Step 4 - The Purchase
Contrato de Arras (Private Purchase Contract)
The Contrato de Arras is a private purchase contract between you and the property owner.
You will be required to pay 10% of the purchase price upon signing to the owner.
Once signed you and the owner are locked into the purchase.
If you do not complete on the purchase then you will lose the 10% and your original deposit. If the owner does not complete the sale, then depending on the contract terms you would receive a full refund + a further 10% or whatever was negotiated.
How long does the purchase take?
From start to finish a property purchase in Spain can be completed within 6-8 weeks.
However, there are many reasons why a purchase may take longer and every purchase is different.
Our advice would be to budget for around 12 weeks from start to finish.
What are legal checks?
- Check the title/ownership of the property
- Check that the property has all the relevant licences
- Complete and/or check the private contract detailing the terms and conditions of the sale of the property
- Complete purchase before a public notary, either on your behalf or with you in person (this may incur extra costs depending on location)
- Register/Check cadastral
- Check cadastral and land registry for any discrepancies
- Tax Registration
- Check for debts – community, utilities, townhall sanctions
Do I have to visit Spain for the purchase?
No, if you have a legal representative with power of attorney they can be there for the signing of the purchase.
Need more help? speak with one of the team
Use the calendar to choose a day that suits you. You will then have the option to book a time that suits you best.
Mortgage & Legal help, you can trust
We do not charge you for the advice we give, we only charge you if we present you with a mortgage with all the relevant financial details, costs and terms.
Our service is 100% transparent, if you do not like the deal on offer then you are under no obligation to use our services.
We are a fully registered finance & legal Spanish company.
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