Purchasing a new build property

NEW DEVELOPMENTS

Unlike when buying a resale home, when buying a new home from a promoter you do not get charged 8% transfer tax but 10%VAT.

You will also need to pay an administrative tax or stamp duty which calls ‘impuestos sobre actos jurídicos documentados’ /IAJD of 1, 5% on the sales price.

Purchasing new build property

Privately or from a promoter

Payments for off-plan property are made in instalments depending on the various stages of the project. In the same way as with resale homes, you need to pay a holding deposit in order to reserve the property and to ensure it is taken off the market.

Apart from this sum (€5000 or a multiple of this amount) you often pay 20-30% at the start of the project (deducted by the amount of the first deposit).
Further payments will take place when the main structure will be done and when windows and doors will be installed.
A certain percentage will be left until completion.

Payment terms vary from promoter to promoter and the type of project (construction period, sale price, project stage…)

It is important to have a bank guarantee. This is to ensure that the development will be completed in case the developer goes bankrupt.

New build residential properties in Spain are sold with a 10-year building guarantee for work done by the developer. This only covers defects arising from initial construction faults, the developer cannot be held liable for damages caused by third parties, construction management or a force majeure (storms, floods…)

Purchasing costs for you as a buyer

There exists 2 situations:

10% VAT
When you buy a plot from a promoter who is also going to build the property.
When you buy a new home from a property developer.

21% VAT
When you only buy a building plot – without construction – from a trader or promoter and you will have the construction done by another party.
When you buy commercial premises or, for example, a garage without a residential dwelling.

1.5% stamp duty
In the case of a new build or off-plan property (which means that the property is still under construction), you also pay 1,5% stamp duty (NOT in the case of resales).

1% solicitor’s costs incl. VAT
(if you work with our Solicitors, normal charges are 1% excl. 21% VAT)

Notary costs amount to approximately 1.000€- 1.200€

Land registry inscription fees are around 500-600€.

If you need a mortgage, there are aditional costs -to the above mentioned – as there are mortage costs, opening fees with the bank (depending on the bank) and valuation costs.
Since 2019 notary fees, landregistry fees and stamp duty taxes of the mortgage is paid by the bank!

Document checklist:

Building permit: Licencia de obra.

The municipal authorities issue this document if you are building or renovating on a building plot zoned for development (Urbano.) If the plot is situated in rustic land you are not allowed to build!

Please note: planning applications are valid for a fixed period with a start and completion date! A planning application which expires, will not be automatically renewed or extended. This depends on the current building standards and laws.

Unfortunately, a lot of innocent and gullible customers still have the wool pulled over their eyes as far as building permits are concerned. It is important to make sure that all legal documents are present and in order. It is not always easy to check this and this is therefore best done by your own attorney. You should definitely not rely on the promoter’s or seller’s attorneys to do this for you!

Completion of the project: Documento de final de obra

This document is drawn up by the chief architect and technical architect after completion of the project. This document will later be submitted to the electricity company (Sevillana) so that they can legally supply the residence with electricity.

Licence of first occupation: Licencia de primer ocupación

This document is supplied by the municipal authorities, i.e. a technical civil servant. He or she will check if everything has been done in conformance with the licence which was issued and Sevillana will also request to see this document.

New Build Declaration: Declaración de Obra Nueva

This document is issued by the notary with a certificate of the chief architect that lists any modifications made to the property.

This usually concerns constructed areas, improvements, shrubberies and trees,…
To have this registered in the Land Registry, you will need to hand in this document once the work is completed.

Different types of architects in Spain:

In Spain you always need 2 architects: a technical architect (Arquitecto técnico, aparejador or perito) and a chief architect (arquitecto superior).

The arquitecto superior creates and compiles the dossier. The dossier consists of the basic project (proyecto básico), implementation project (proyecto de ejecución), specifications and list of materials (memória de calidades).

Once this document is complete, it is submitted to the local college of architects (colegio de arquitectos) in Málaga. Here the dossier is checked for technical and structural details only. Every page and plan in this dossier is stamped (visado). After approximately 3 weeks, the dossier is returned to the architect and submitted to the Urbanisation Department (Urbanismo) of the local council municipal authorities.

Architect fees in Spain are significantly higher than those in Belgium or the Netherlands. They are calculated in accordance with statutory fees of the college of architects (these are adjusted annually). Fees are linked to the amount of square meters of floor surface of the new development. As a rule, the fee of an architect is about €55/m²: the technical architect asks for approximately another 30% of the chief architect’s fees.

Example: new build 200m²

* All fees are calculated dependent on the individual project: size, duration, complexity .