egal guide
to buying property in spain
The steps to buying your propertyOnce you have
decided on the property that you want to buy, the process is this:
Nota simple
informativa With this document from the Property Registry (Registro de la
Propiedad), you'll find out if the property is free of debt, if it really belongs
to the seller, and if the description of the property matches what the buyer has
been told (to avoid surprises about missing square meters).
The pre-agreement Between
the seller and the buyer there has to be a contract in place until the public
deed of purchase is ready. It's usually a simple document in which the seller
expresses their intent to transfer the property to the buyer, and the buyer expresses
their intent to buy at the price and conditions agreed upon. At this time, the
buyer also gives to the seller a percentage of the agreed-upon price. Of course,
the buyer and seller may choose another type of agreement if they prefer.
The
mortgage If you get a mortgage, you will become acquainted with an
appraiser (tasador). The bank requires an appraiser to ensure that their loan
to you is safe. You will need to pay for the appraiser's work, usually between
300-500 euros. Note that the tasador by law is a licensed architect, so even if
you don't need a mortgage, but have doubts about the structural integrity of the
house, you might want to hire an appraiser.
The closing The property
transfer must be certified by a notary. The deed of purchase will be given to
the buyer after the notary reads it and the parties present agree to the contents
of the deed. The following must then be presented: proof of identity (or power
of attorney) of both parties, the seller's title of property (a form that reports
the investment to the Central Register), and the buyer's payment. The buyer and
seller sign the contract; beneath their signature, the notary signs using his
firma protocolizada and the deed is ready for taxes.
Taxes For the buyer:
transfer tax(impuesto de transmisiones patrimoniales) and stamp tax(impuesto de
actos jurídicos documentados). If the seller is an individual, the
buyer pays a tax of 6% (7% in some regions) of the price specified in the deed.
If the seller is a real estate developer and the building or land to be built
on represents a first-time transfer, then the buyer pays VAT tax instead, meaning
7% for housing, 16% otherwise. If for housing, you have to add a stamp tax, in
this case reduced to 0.5%, depending on the region (for Madrid it's 1.5%). Some
special conditions apply for the Canary Islands. For the seller: a local
tax called the plusvalia With a copy of the deed in hand, the seller must
go to the City Hall (or wherever local taxes are paid). After filling out the
form, the seller will receive in the mail a notice of how much they have to pay.
This amount is calculated based on the number of years the property was held,
and on the property's valor catastral. Be aware that each town has a different
procedure regarding payment of this plusvalia. It's best to ask at the notary's
office about this payment. Property Registry If you want to be sure
that your rights to the property are fully protected, you must register your title
at the local office. (Some small towns don't have an office, some big cities have
many -- check the original deed of the seller to find out which office corresponds
to you). You will be charged a standard fee (about .4% of the first 6010 euros,
going down to .02% for over 6,010,121 euros).
Faqs How can I find out
the market price of a spanish property? The seller wants the declared price
to be less than what I'm actually going to pay. Should I do this? If I'm
buying a spanish property can I save on taxes by creating a company? What
information should I get from my spanish property agent? Are spanish property
agencies regulated? When I sell my house in spain, are there any required
inspections? What is the trend in property prices in Spain? The content
on this page was kindly provided by Strong Abogados. If you need legal advice
or help with property, employment or company law in Spain please visit their web
site at www.strongabogados.com | 