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Purchase process

Below is a brief outline of the purchase process for each of our destinations, comprehensive information is available with our free, up to date guides. These do not in any way substitute professional legal advice, they do act as a comprehensive, wide – ranging guide to the process.

Purchasing properties in the US

The law relating to purchasing property in Florida is not dissimilar to the UK, as both systems are based on common law.

The sale of Real Estate in the US is always governed by the State where the property is located. The form of ownership is known generally as in ‘fee simple’, we would refer to this as ‘freehold ownership’. When a building is on a development of flats (for example) this is called a ‘condominium’.

Transfer of property ownership (real estate) is completed by deed, not dissimilar from the UK. The whole process usually begins with a written agreement; your lawyer will ensure this agreement is subject to various stipulations, title and deed examination, the necessary home checks and completion dates.

As with the UK, there are costs involved in the purchase of the property. These varies from region to region allow circa 4-6% of the sales price of your property. The type of costs can consist of; application fees, appraisal fees, county tax, credit report, documentation fees, escrow, loan fees and insurance premiums.

Purchasing properties in Spain

Thousands of British people have successfully invested in Spain; the process is straightforward, and with all matters legal, no short cuts or cost cutting when it comes to legal advice.
The process; Nota simple, (Legal description of the property), Mortgage or finance, closing and taxes. *The Nota simple informativo; this is supplied from the Property Registry (Registero de la Propiedad) this shows the property is free from debt, that it legally belongs to the developer/vendor and that the description of the property is correct. The Notary prepares the title deeds (Escritura), and registers the property. The associated costs are Spanish VAT at 7%, 1% registry costs, 1% legal fees and 1-2% in the event of a mortgage. So count on 10/11% on top of the property price.

We recommend that our clients employ an International lawyer with experience of purchasing Spanish property – or an English-speaking Spanish lawyer (Abogado). They make the necessary searches to ensure that the land belongs to the Vendor, is free of charges, and have the necessary planning and building permission and that the Contract is fair and legal. Once the transaction is completed they will arrange for the title deeds (Escritura) to be transferred into the purchaser’s name.

Be aware that in Spain the equivalent of VAT which is levied on property purchases and is currently at 7% will INCREASE to 8% as of July 1st 2010. What better reason to get your property purchase in Spain settled before then?

Purchasing properties in Portugal

Contracto de Reserva (reservation contract) is a short contract where you pay a deposit (usually around €3,000 – which is taken into account with the sales price), this secures the property for between 2 to 4 weeks. Your lawyer gets to work on all the conveyance, when everything is in order you then sign a promissory contract. The checks your lawyer will undertake include: Land registry, debts on the property, that the seller is legally entitled to sell, guarantees, planning, construction, licenses and checks on the contract of sale
An offer to buy is formally drafted by your lawyer; you then create a legally binding document with the seller/developer.

The preliminary/ promissory purchase contract (Contracto Promessa de Compra e Venda) is your legally binding purchase agreement. This is followed by the contract of sale. You may opt to sign a Power of Attorney authorizing your lawyer to sign on your behalf, you may also require a tax number (again your lawyer can arrange this for you) The Notary will prepare the final contract of sale and title deed. Allow 6-7% of the purchase price for associated costs.

Purchasing properties in Cyprus

Cyprus law is based on British law; many of the components of the purchase process are similar. The purchase process includes; the deposit, contract, legal, stamp duty & RETT. All property in Cyprus is Freehold; you own the property and the land it’s built on. In the case of apartments you own your share.

RETT (real estate transfer tax)

The tax value wise is more akin to our stamp duty. Title Deeds are issued in your name after your lawyer obtains the Council of Ministers consent. This is a formality for EU citizens and should take about six months to obtain (we are aware of instances where this is longer, it might well be a positive), it doesn’t prevent you from selling plus you hold on to your money for a little longer! On receiving the title Deed, the RETT is due immediately.
A foot note on stamp duty and legal fees; Please be aware that clients will be expected to pay their stamp duty within 30 days of signing their contract for the purchase to be registered. Also the bulk of the legal fees will have to be paid upfront. The actual stamp duty is on average about £250.

In Cyprus, by law every contract registered with the land registry is protected by ‘specific performance’. Once our client has paid 30% of the value of the property it (the property) is then removed as an asset of the developer. In effect the developer can not sell it, halt construction or illegally amend the contract.

Allow in the region of 11% of the purchase price for associated closing costs.