Making the decision to buy a home is perhaps the most important we will make in our life. In fact, most people will only do it once. That is why it is such a relevant event that it must be studied thoroughly. For this we must prepare not only with time, but with knowledge that will help us carry out the process successfully. We must also know that we contemplate several options.
What residential property options are there?
We may have made the decision to buy a home and we are wondering what steps we should take. One of them will be what type of home we want to acquire. In this sense, we are not only talking about whether we would like to buy an apartment or a villa but whether it will be new, used or even officially protected. The reality is that all three are valid options and have different characteristics not only in terms of access requirements but also in terms of procedure and taxes. Let’s see what they are:
- New housing. The advantage of acquiring a new home is that both the materials and its features will be modern. With this we understand that it will be a much more energy efficient home than a second-hand one, but also that its maintenance will be less because its state of conservation will be intact. Thus, it is more likely to have common facilities, garden areas or garages. In this way, acquiring one of these homes may be more expensive initially but then the maintenance costs will be lower. On the other hand, these types of homes are subject to VAT, this means that we must add 10% to the price indicated by the developer. This tax “is unique for all of Spain, except for the Canary Islands whose tax is the IGIC and is 6.5%” tells us Arantxa Goenaga, expert lawyer in Real Estate Law and partner of the firm Barcelona Legal Circle. Another interesting issue is that these types of houses are sometimes already built or sometimes not. If they are, only the reservation of the property will be paid and when they have granted us the mortgage we will proceed to the sale. In the event that it has not yet been built, we will talk about buying off plan. In this case, we will also pay an amount as a reservation. Then, for the duration of the construction, a series of fees stipulated by the developer will have to be paid, before the delivery of the house. Apart from this, the autonomous communities charge another tax. It is about documented legal acts. “Here each CCAA will tax according to its criteria, that is,” according to the fiscal policy of each CCAA, “explains Carlos Muñoz de CIM Tax & Legal.
- New housing in a cooperative regime: The main advantage of this type of property is that it is sold at cost price, so the margin that the developer takes is eliminated. This makes it a more affordable option than that of the developer, around 20 or 30% cheaper. Of course, we must consider the margin of the manager, which is between 8 and 12%. Another of the main advantages of this option is that payments can be postponed, in addition to being able to change your mind and have the amounts contributed back. Of course, the withdrawal must be justified and may involve the retention of 5% of the total amount to be returned. Of course, like everything, there are also disadvantages. The first is that the price is not final. There may be a variation of up to 2% due to delays in the work or a miscalculation of construction costs. Another precaution that must be taken before embarking on this project would be to have verified that the company is registered in the Register of Cooperatives corresponding to our Autonomous Community. It is also convenient to know if the land where it will be built has the urban planning licenses granted. This can be consulted in the Property Registry. Another important question is to know that the entrance to contribute for this type of house will be between 20 and 30% for the beginning of the construction works.
- Used housing. In this case, the purchase price will be more affordable. However, we recommend carefully analyzing the state of the house that has interested us since it will save us later costs both in maintenance and renovations. Here, it is also important to know the state of conservation of the farm, to be able to foresee subsequent spills. If we choose to acquire a second-hand home, we should know that once we have made the decision and have been granted the mortgage, we will have to make a deposit contract. This supposes the previous commitment to buy the house. To put it another way, it is the reservation of the property. Normally it amounts to 10% of the agreed purchase value with the seller. On the other hand, this home does not carry VAT but it does carry another tax known as the Patrimonial Transfer Tax and the Documented Legal Act. This is related to the transfer of property and its value depends on each Autonomous Community, although it usually ranges between 5 and 10%.
- Official protection of living. This type of housing is of a public nature so access to it is usually conditioned by a series of requirements established by each autonomous community. The first thing we must do is go to the housing office of the autonomous community in which we reside and ask for the specifications that are required to know whether or not we comply with them. Normally the conditions are due to not having owned a protective home in the past or having a free one at present. You must also be registered in the community in which access to said housing is requested or be registered in the public registry of housing applicants. Finally, most communities establish a family income limit to access this type of housing and also an age limit. As for the taxes of this type of housing, they are usually subsidized by the state, so they contemplate a reduced VAT of 4%.
A great decision
As you can see, there are many aspects that you should take into account when buying a home and this is certainly one of them. Like everything in life there are several options, each with its advantages and disadvantages. There is no wrong decision, only one conscious one at a time. In this sense, the experts recommend that you inform yourself very well about each of the steps and the issues to attend to so that it is a procedure as pleasant as possible.
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