The whole process of buying or selling property in Spain involves different legal procedures and administrative paperwork, which sometimes is unclear or difficult to understand by an inexperienced person.
The information contained in this brochure
is intended as a general guide to Spanish conveyancing
procedures for those buying or selling a property in Spain.
We hope that the information herein contained will be of some assistance when you decide to buy or sell a property in Spain, buy if you have any more queries or need further clarification, please do not hesitate to contact us.
The solicitor acting for the seller or the buyer should take instructions from the client. Instructions are normally confirmed to the client in writing, together with some information relating to the costs of the particular transaction as well as an estimate for the solicitor´s legal fees.
After completion, the solicitor will deal with filing and lodging the appropriate taxes to the Inland Revenue or Government tax office and then submit the title deed to the Land Registry to have the transfer of the property registered. When the registration of the title is complete, normally 3 months later, your solicitor collects the deeds and passes then to you.
Freehold title means an owner is entitled to absolute possession of the property for an indefinite time.
The purchase of a new property is a more complex transaction than the purchase of an existing one. Additional issues must be taken into account when dealing with new or under construction properties. Particular attention must be paid to planning permission, building regulations consent, structural guarantees, easements and reservations, advance payments securities, compensation for delay and existing mortgages.
We offer the following services:
· Advise you about who should be the
owner of the property to minimise tax and inheritance problems.
What is the Escritura?
This is the title document transferring ownership of the property. Under Spanish law it is necessary for the escritura to be signed before a Spanish Notary Public. We will arrange to this for you.
Who is the Notary?
The Notary is a public official who is there simply to put on the public record the fact that the deed recording the sale/purchase has been signed in his or her presence and understood by the parties concerned.
Where should the money paid?
When the escritura is signed in front of the Notary either the purchase price is, in his or her presence, handed over to the person selling the house or the Seller confirms that the monies has already been handed over. Proof of such payment es then incorporated into the title deeds of the property.
Usually the price may be paid wherever in the world the parties agree.We will advise you as to the implications of this choice.
The person buying the house may attend in person before the Notary, but, if this inconvencient, arrangements can be made for a Power of Attorney to be granted enabling antoher person to attend on their behalf. This must be in the Spanish form and signed in front of a Notary.
Once the purchase formalities with the Notary have been completed we arrange, on your behalf, to pay any taxes due in relation to the transaction.
Yes. After the Escritura has been signed in front of the Notary we arrange for it to be presented to the appropriate Land Registry and for the payment of the Land Registry fees.
About 3 months can elapse before the process of registration is concluded, but as soon as we are notified that the deeds are ready we will have them collected, check them and then forward them to you.
You must also make sure that the property specification is agreed in detail with the builder and that the property will be delivered to you complete with the necessary licence to occupy it as a home.
In whose name should you purchase the property?
There are a number of ways to purchase the property:
§ In your name
Everything depends on your own personal circumstances.
The transfer of freehold properties will normally attract Transfer Tax at rate of 7% of the purchase price. This is a local Government tax payable by the buyer to the local tax office .
In the case of new residential property transactions, there is mandatory VAT to be charged normally at the rate of 7% of the purchase price. The purchase of commercial properties and plots of land will normally attract VAT at the rate of 18%. An additional 1% (Stamp Duty) of the purchase price will be levied by the local Government.
A liability to Capital Gains Tax may arise on the sale of a property. A seller´s solicitor should be aware of the possibility of potential liability and advise the client accordingly. Similarly, a buyer who is purchasing property should be aware of potential tax liability that may be incurred in his subsequent disposal of the property.
Real State Tax/Rates (IBI). This is an annual local tax, i.e. levied by the City Hall which is payable by real estate owners
ISVTNU (plusvalía) Tax. A tax that may arise on the disposal of the property. This is based on the increased value of the property transferred up to the date of the sale. By law, and unless the purchase contract provides otherwise, the seller is liable to pay the tax to the City Hall.
Wealth Tax: Non Spanish residents are required to file a return for this tax on estate owned in Spain on December 31 of each year.
Generally, the total of all fees and taxes, including our own, will amount to about 10%-11% of the value of the property.