Buying a new-build home in Spain

There are many benefits associated with buying a new-build home in Spain. You acquire a relatively maintenance-free property, which in the majority of cases has been built using the latest construction techniques. New-build homes are usually characterised by generous amounts of natural light and a well conceived floor plan with optimised living areas. Everything is new and fresh, with a modern touch, and in most cases these properties also feature spacious outdoor areas. It’s not difficult to understand why so many potential buyers are attracted to new-build homes.

Things to consider when buying a new-build home in Spain

There are certain aspects that must be taken into consideration before you decide to buy a new-build home, as there are a number of differences compared with buying an existing property. Below we have listed some important things to be aware of before you decide to buy a new-build home.

QUALITY CONTROL BY THE DEVELOPER
There is a large selection of new-build homes along the Spanish coast. Bjurfors Real Estate only sells properties where the developer can produce the necessary documentation and can show that everything is in order for completion of the project.

A LONGER TIME PERSPECTIVE
A new-build project in Spain can often be subject to delays. The total time perspective is therefore a very important aspect and something which you must be able to accept. A useful tip is to clearly decide when, at the latest, you want to be able to start enjoying your new home, and to be aware that buying a new-build home requires an ability on your part to be flexible in relation to the completion date.

PERSONAL MATERIAL CHOICES
Depending on the developer and the stage of the process at which you confirm your purchase, you may be able to influence the final design of the property to a greater or lesser extent. In the majority of cases you have a greater chance of influencing the material choices in your new home if you reserve the property at an early stage of the construction process, although it is always up to the developer to decide how much you, as the client, may get involved and influence the design of the property. Explain your preferences clearly to your estate agent, so that he or she can present you with new-build projects that suit your needs and wishes.

Bank guarantee, taxes and payment plan when buying a new-build home in Spain

Another important consideration is that, if you reserve a property based on a floor plan, Bjurfors Real Estate makes sure that you receive a bank guarantee in relation to the instalment payments you make to the developer according to the agreed payment plan. This means that, if the developer were to unexpectedly become bankrupt or otherwise not be able to complete the project, you will receive a refund of the money you have invested in the project, as the bank has guaranteed the developer’s performance.

WHAT IS INCLUDED?
Find out exactly what is included in the basic price of the property you are interested in, as this can differ from project to project. We can help you gain an overview of the total price of a complete property that meets your wishes regarding appearance and design, and most of our offices can put you in touch with external suppliers if necessary.

Bjurfors Real Estate will provide you, either directly or via your legal representative, with a complete and transparent calculation that includes all optional extras, taxes and fees.

PAYMENT PLAN
You will also receive a complete payment plan with clear details of the amounts that you must pay, and when. Even this aspect can differ between the various construction firms, although the standard model is that you can reserve a property with a payment of EUR 3,000 – 10,000. The reservation usually applies for one month or, in certain cases, until you have had an opportunity to travel to Spain and perform an ocular inspection of the project, depending on the agreement you reach with the developer.

20-50% of the purchase price is then usually payable when the contract of sale is signed. It is this amount that needs to be covered by a bank guarantee. The structure of the payment plan will depend on the type of property you are buying and the developer you are dealing with. The larger and more valuable the property, the more common it is for the developer to require several instalment payments.

TAXES AND FEES
The final payment is due when the project has been completed and all documentation is in order. At the same time, you must also pay applicable taxes and fees. At present these consist of 10% VAT + 1.2-1.5% in local stamp duty (varies from region to region). It is also at this time that you must pay the lawyer’s fee and the notary and registration costs. The total amount can range from around EUR 4,000 to 1% of the purchase price, depending on where in Spain you are buying your property.

INSPECTION
Before you make the final payment, an inspection (otherwise often referred to as snagging) must be performed. We strongly recommend that you do this in person on location with the developer. The purpose of this inspection is to identify and produce a list of any faults and defects that must be fixed by the construction firm. If a major fault or defect is identified and must be corrected, we recommend that you withhold final payment until the necessary corrective action has been taken. Check with your estate agent or your legal representative if you feel unsure about anything.

BUILDING PERMIT
It is not unusual for the process from reservation to completion of the property to take between one and two years, especially if the developer started marketing the project before the building permit was ready. Sometimes a project is marketed with an estimated completion date, but without a building permit it is impossible to say when the project can be completed. The amount of time it takes to arrange the building permit can vary depending on the location i.e. the local authority. If you desire a property with a more definite completion date, you should always check with your estate agent to ensure that the project already has a building permit.

FINANCING THE PURCHASE OF A NEW-BUILD HOME
If you arrange a bank loan in Spain for the purchase of a new-build home, it is important to find out what documentation the bank requires before they can pay out the loan. Other than the final inspection report, a bank will also often require a housing certificate or occupancy licence that is issued by the local authority. The processing time for this document is usually six to twelve weeks after completion of the property. In other words, in certain cases the documentation required for a loan from a Spanish bank may entail a delay before you are able to take possession of your new home.

Why Bjurfors?

It is particularly important that you choose the right estate agent when you are buying a new-build home in Spain. This is what you can expect if you choose to hire Bjurfors Real Estate:

• Our estate agents have in-depth knowledge of the market and different types of projects
• We perform a general quality control of the developer and the project
• We ensure the production of necessary documentation for each project
• Unless otherwise agreed, we always ensure that a bank guarantee is provided
• We perform a transparent and complete cost calculation for the property, including taxes and estimated fees
• We possess knowledge about material choices, and most of our offices can facilitate contact with alternative suppliers if necessary
• We are there to provide you with guidance and support throughout the entire process

We hope that the above information has provided you with greater insight into the process of buying a new-build home in Spain. If you have any additional questions or require further information, please don’t hesitate to contact the staff at one of our local real estate offices.