Professional advice
It is important to seek
professional advice from a
local solicitor (Abogado).
Their standard fee for the
purchase of a property is 1%
of the purchase price plus
VAT. Using a non-local
solicitor will be more
expensive. The Spanish legal
system is very different
from other European
countries and, to avoid
misunderstandings,
disappointments and possible
fraud, it is essential to
seek expert professional
advice from the beginning.
Should you not have a local
lawyer, we will be willing
to recommend a trustworthy
one to you.
Process Of Buying a Property
The contract. Once you've
decided on a property, a
contract is drafted and you
need to make provisions for
a 10% deposit. The deposit
is payable upon signing the
contract (Contrato de
Compraventa), which will
include a completion date
and the transaction
conditions which usually
contains an assurance by the
sellers that the property is
sold free of charges,
tenants and mortgages.
Once both
parties have signed this
contract and the deposit has
been paid, you have secured
the property. This is a
binding contract for both
sides with penalties for
breaking it or for failing
to honor the terms of the
contract.
After you
have signed and paid your
initial 10% deposit on the
property, it is imperative
to review the important
legal details. Check the
receipt for the paid IBI,
the Impuestos sobre Bienes
Inmuebles, the annual real
estate tax. This receipt
gives the all-important
Valor Catastral the official
assessed value of the
property, on which your
property owner's income
taxes will be based. Check
with the local town hall
that the receipts have been
paid. Any outstanding
balance may be requested of
the vendor (this will done
by the lawyer).
Do not
buy Spanish property until
you have obtained a current
Nota Simple (an extract from
the title) from the Registro
de la Propiedad.
Payment and Signing of Deeds
The next stage is to
complete the purchase at the
Notary's office, usually,
within a month or so, you
will be ready to make the
final checks before signing
the "Escritura Publica de
Compraventa" (title deed) in
the presence of a Spanish
Notario (Notary) who
certifies that the contract
is officially made. The
notary does not certify that
all statements are true,
only that the parties have
sworn to them. There you
will be required to pay the
balance of the purchase
money, taxes and Notary's
fees.
Notary Charges
These are collected by the
Notary for preparing the
deed and presiding over it's
signing. His fee is fixed by
law, is on a set scale
according to the property
value, and whether the
property is mortgaged or
not, is not normally more
then 1% of the purchase
price including VAT.
Please
note all professional fees
including the notary's and
land registry's charges are
subject to 16% VAT.
Property Registration
All property in Spain should
be registered in the
Registro de la Propiedad
(the land registry), where
you can obtain the full
details of the owner, the
exact size of the property
and full details of any
mortgages, debts or
judgments against the
property will normally be
registered. Only the persons
or company named on the
Escritura Publica, the title
deed, have the right to sell
the property, unless a
notarised power of attorney
has been given to the third
party.
When the
title deed is signed, you
will automatically become
the new owner. The final
step is to have the 'Escritura
Publica' registered in the
Property Registry Office as
soon as possible to prevent
a mortgage or other charge
being registered against the
property, while it is still
listed in the name of the
seller.
Property Registration Fees
Property Registration fees
is charged by the property
registration office to
inscribe the new deed into
your name. These are based
on the official registered
value of the property. The
length and complexity of the
deed and other factors are
also considered. The fee
does not exceed 1% of the
registered value.
It is not
advisable to try and do this
yourself unless you are
experienced and speak
Spanish fluently.
Taxes
Property Transfer tax or IVA
(V.A.T.)
Which of
these two taxes is levied
will depend on the type of
property you are purchasing.
The property transfer tax is
levied on resale properties
and is charged at 7% of the
new escritura value
(purchase price).
If you
purchase a newly built
property from a developer
you will pay a different tax
called I.V.A. (V.A.T.) is
charged at 7% of the selling
price plus 0.5% stamp duty.
Plus Valia (local municipal
tax)
This tax is based
on an officially assessed
increase in the value of the
land since the last time the
property was sold. This can
be quite small if purchasing
an apartment, but expensive
on a villa with a large
plot, which has not changed
hands for years. Find out
the exact amount from the
town hall. Do not confuse
this tax with the seller's
capital gains tax on his
profit on the sale.
In
practice "who pays what" is
negotiated with the final
selling price and this must
be stipulated, as well as
listing the
contents/fittings to be
included in the sale, when
the owner accepts your final
offer (in writing).
Who Pays for What
In accordance with Spanish
law:-
The buyer is responsible for
:
The Seller is responsible
for:
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