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Buying a construction project

Privately or from a promotor

The payments for a construction project property are arranged according to the various stages of completion. As with buying an existing house, you will need to make an initial down payment to reserve the property and take it off the market.

Apart from this sum (€ 6,000 or multiples of this amount), it is usual to pay 30% at the start (minus the already paid initial down payment). The remaining amount is paid upon delivery.

Payment terms are in fact dependent on the promotor and the type of project (time of construction, selling price, phase of the project ,...)

An important element is the presence of a bank guarantee: in that case construction can be completed even if the constructor goes bankrupt.

Also, contractors in Spain are required to give a 10-year warranty on work they have done. This applies only to defects resulting from poorly done work; they can not be held liable for damages caused by third parties, the client or force majeure (storms, floods ,...)

Costs for the buyer

For a detailed cost estimation: see 'Buying an existing house or building your own'.

A basic rule of thumb when buying a property in Spain is that the additional costs will amount to an extra 9, max. 10% of the selling price. In case you need a mortgage, the total of the costs will be a bit higher: 10 to 11%.

As mentioned above, a re-sale, being the purchase of an existing home, is subjected to a 7% Transfer Tax (Impuesto de Transmisiones Patrimoniales). In the case of new buildings, there are two possibilities; also the name of this tax changes: here it is not called transfer tax but simply VAT (IVA: Impuesto sobre el Valor Añadido). 

  • 4% VAT:
    If you buy a plot from a promotor who also builds the house on the plot.
    If you buy a new home from a developer.

  • 18% VAT:
    If you buy a building plot only - i.e. without house- from a trader or developer.
    In case you buy a commercial building or for example a garage without a house.

  • 1.2% administration fee or stamp duty
    For new houses or construction projects (in which case the house is still under construction), you also pay a 1.2% administration fee. (NOT for resales).

  • 1% legal fees (+ 18 % VAT)


    Notary fees: approx 0.25% of the deed price (variable)

    Inscription in the Property Registry: about 0.15 % of the deed price (variable)

Checklist documents

  • Building permit: Licencia de Obra.
    For construction and renovation on urban land (terreno urbano), this document needs to be obtained from the town hall. For country land (terreno rústico), any building permit or zoning change needs to be approved by the provincial government, in this case the Junta de Andalucía.
    Building permits/applications also have fixed deadlines for constuction start and finish: beware! A building permit/application that runs out will not automatically be renewed or extended This may change, depending on the current building regulations and laws.
    Still too often unfortunately, innocent and often gullible customers take the seller's word about the building permit as gospel. Very important: always check whether ALL legal documents are present. This is not always easy and should be done by your own lawyer, certainly not by the promotor or seller's lawyer!

  • Construction completion: Certificado de Final de Obra
    This document is supplied by the main architect and the technical architect upon completion of construction. The document will later be required for the power company (Sevillana) to legally provide your house with electricity.

  • License to occupy the dwelling: Licencia de Primera Ocupación
    This document is issued by the town hall after a municipal technical officer has checked again that all work has been carried out in conformity with the issued license; this document will also be requested by Sevillana .

  • Declaration of New Construction: Declaración de Obra Nueva
    Document issued by the notary with an attached certificate by the main architect , which describes in an undisputable way changes done on a particular property.
    It mainly concerns built-on area, improvements, plant-on areas, ...
    Normally, this document is used to obtain an inscription in the Property Registry after the works have already been carried out. 

Types of architects in Spain

In Spain, two architects are required: a technical architect (arquitecto técnico, aparejador or perito) and a main architect (arquitecto superior).

The arquitecto superior makes the design and prepares the dossier. The dossier consists of the basic project (proyecto básico), detailed project (proyecto de ejecución) and building estimates and specifications (memoria de calidades).

Once the dossier is ready, it is submitted to the provincial College of Architects (Colegio de Arquitectos) in Málaga. Here the dossier is only checked technically and structurally. Each page and each plan in the dossier is stamped ('visado'). After approx. 3 weeks the dossier is returned to the architect and may be submitted to your town hall's Urbanismo department.

Architect fees in Spain are significantly higher than those of their collegues in Belgium or the Netherlands. They are charged according to the statutory rates of the College of Architects, which are adjusted annually. A factor in the calculation of the fee is the area in square meters of floor space of the building to construct. Generally speaking, the main architect's fee is around € 55/m². The technical architect in turn charges 30% of the main architect's fee.

Example: new construction of 200m ²

  • Main architect = € 11,000
    Technical architect= € 3.300
    Total cost = € 14.300 * 

* Each fee is calculated according to the project: size, duration, complexity.

 

 

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