The private contract specifies the payment terms for the property, which can differ depending on whether the property is new or a re-sale. For a new property payments are normally staged according to the building schedule and planned completion date. It is common to make 3 or 4 staged payments as well as a deposit at the time of reservation.

Most important in the contract is a clause guaranteeing, either via bank guarantee or insurance policy, the reimbursement of any monies paid in the case of insolvency of the builder or other motives for not completing the property.

Law dating back to 1968 has required this guarantee but there are still certain builders who try to avoid giving it.

In the case of a re-sale the private contract usually stipulates that full payment is made over a period of one or two months, although other arrangements can be made. One other option is that payment can be made in one go at the time of signing avoiding the need for any reservation deposit.

PUBLIC CONTRACT/ TITLE DEED
Once all the sums have been paid the "Public Document" is signed. This is the contract or title deed, which serves as proof of ownership. The title deed is signed in the presence of a notary public with both buyer and seller, or their representatives, present. The title deed specifies the principal terms of the purchase.

In some case the document can be signed even when a part of the payment is still outstanding, provided the fact is mentioned in the document itself. In this case the seller will normally reserve the right to recuperate his property in the case of non-payment of the outstanding portion through a "conditional upon" clause.

REGISTRATION
The sale document or title deed should always be registered at the Land Registry as the best method of proving ownership. The Registry is public and open to anybody. Although the buyer acquires the property as soon as the title deed is signed, registration in the Land Registry can take up to 3 months.

COSTS
The main costs associated with the purchase are: taxes, notary fees, land registry fees, and legal costs. The total cost will vary according to whether the property is new or a re-sale, but as a rule of thumb the total will amount to about 10% of the value of the property.
In addition to the above, on a re-sale, there is a Town Hall tax known as the "plus valia" which legally speaking should be paid by the seller as it is calculated at the time of sale on the length of time that the seller owned the property. However the parties can agree to some alternative arrangement, but the buyer should ascertain the amount and treatment of the sum before finalising the purchase.

MORTGAGE
Non-Spanish residents are entitled to take out a mortgage to finance part of the purchase cost. Lenders will usually agree to between 50% and 60% of the price based on a property valuation. As anywhere else the lender will require proof of the ability to make mortgage repayments and references.
Where the mortgage is required to be registered along with the title deeds, there will be an additional series of costs involved (notary, registry), which add up to about 3 % of the mortgage.

ANNUAL COSTS
These are the most usual annual costs associated with a property:
1. Rates and Refuse Collection
2. Utility Bills
3. Ownership Association Fees: where the property is situated within a complex there will be an owners association dealing with the common areas of the complex. To fund this an annual fee is payable by all owners approved annually at the A.G.M