BUYING AND SELLING PROPERTIES IN SPAIN

Buying a property in spain is a very important decision and investment which involves large sums of money and a huge legal Spanish system. The are tax, urbans legal matter involve in those transaction that need to be take in mind before.

For that reason it is essential to be assisted by a andalucia lawyer/solicitor. The lawyer will safe the transaction according to the Spanish law and also will save you money.

We have a wide experience in buying property in andalucia, especially in Granada, Marbella, Sotogrande

There are important difference between Spanish and English law. A Solicitor/Lawyer will provide legal guarantees for the purchase of the property, ensuring that

• In Land Registry the property is free of debts, encumbrances, charges, and is up to date in all its payments.
• Title Deeds
• Local Council
• Taxes and cost to be paid in the transaction
• Taxes to be paid in the future.
• Requirement (appliyng for N.I.E number for fiscal purpose).

Once you have chose a property, the purchase terms and price will need to be negociated with the seller. Sometimes the solicitor may also assist the salesperson in difficult and complex negotiations with the owner.

Who is buying the property ?

Yourself , your children, a ltd company,

The process of buying a house in spain may different depending of every transaction but the normal one will be:

Reservation document: normally agreed with the estate agent and for a period of 15 days until you sign a private contract.

Exchange of private contracts or sign an option to purchase. It is very important to ask you if you want to have a binding or non-binding contract. There is also a specific agreement “called arras” may be entered into between the vendor and the buyer, where either party may rescind the contract, the seller returning double the deposit or the buyer losign the deposit. It is customary practice at this stage to pay 10% of the purchase price. Both will reflect all the agreed terms, general and especific condition of the offer and set out the date for final completion at the notary.

Completion before the Notary office: he will check compliance with Spanish law, however, the notary does not check the title to the property, although he will make a check at the land registry immediately prior to the signing of the Title Deeds to ensure that there are no undisclosed charges on the property.

A sale is formally completed in spain when the public title deeds of purchase are signed before a notary, the final payment is made, and possession is taken over by the buyer.

Registration.

Once signed, the notary will fax a note of the title deed to the local land registry. Your lawyer will also pay on your behalf all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds. Final registration of the deed may take up to one month.

Cost involved in purchasing a property.

Estate Agents: rarely below 5%.

Notary fees : the scale is fixed by law and may range from 200euros to 800euros depending of what is agreed and the price of the house.

Registry fees : Normally 50% of the Notary fees.

urrently charged at 16%.

Taxes

Transfer tax at 7% in the case of a re-sale property. When buying a house from a promoter, developer 7% VAT, plus1% of stump duty. If you buying a plot of land, commercial premises or garage spaces the tax is 16%.

Local Tax called Plusvalia

Normally payable by the vendor but it may be stipulated that the buyer pays. May range from 30euros to 1500euros. Who pays this will be discussed in the negotiations and in consultation with your lawyer.

After signature, the first copy of the Escritura must be presented to the tax office within 30 days from the date of completion, so that transfer tax can be paid. Failure to do so will result in a fine.

Selling the house

If you are planning to sell your house it is advisable to go to the lawyer/solicitor in order to protect your interest preparing the transaction and the tax implication of the sale especially the Captial Gain Tax

Buying from a developer

There is a legal requirement for builders which consist in an insurance policy or bankers guarantee, protecting the buyer´s payments agains the risk of the builder becaming insolvency.

There must be a full contract containing all the clauses of the purchase :building specification, planning consent, plans etc.