LEGAL ADVICE



Important points that you should consider

Prior to viewing

Before traveling to Spain, you should ensure that you have sufficient, accessible funds to cover an initial reservation deposit. This amount is commonly 6,000€, but could rise if you are considering a higher priced property.

The reservation fee is almost always paid in cash or by credit card. A cheque drawn on a non-Spanish bank can take about ten days to clear, during which time your reservation is deemed not to have been made.

If you do not have the means to put down the required reservation fee immediately, you run the risk of losing that property to someone else who does.

There are virtually no exchange controls in Spain, which means that whether you are a Spanish resident or not, you are free to obtain a loan or mortgage against your property in any currency and from any bank in the world. Spanish banks are happy to lend to non-resident purchasers provided that you comply with a few simple "rules".

As a minimum you will need to provide copies of:

  • Your latest income tax return (or P60 if you are from the UK)

  • Six months pay slips

  • Your last six months bank statements

  • A breakdown of your assets and liabilities (where this applies)

  • If self-employed, your last two or three years accounts

  • Your passport

  • NIE number

Negotiating the purchase


Once you have chosen a suitable property, the purchase terms and price will need to be negotiated with the vendor. You may wish to make your offer of purchase "subject to mortgage approval", or you may wish to vary final completion dates, or perhaps the method of payment.

Choosing a lawyer

There are many excellent lawyers (abogados) in Spain and many are fluent in English. A lawyer will provide the legal guarantees for the purchase of your property, ensuring that all Spanish legal requirements are met and that the property is bought free from any encumbrances, charges, liens or debts and is up to date in its payment of local taxes and community charges.

Formalizing the offer


Once there is a formal agreement between yourself and the vendor, the next step will be to formalize those offer terms of purchase in writing. Funds should be deposited in local bank account or with you lawyer in order to demonstrate to the vendor that you have a real intention to purchase. It is normal practice in Spain to include with the offer a reservation fee which will reserve the property exclusively for you until the formal exchange of private contracts.

Exchange of private contracts

Upon acceptance of your offer by the vendor, the next step in the sale process is to exchange private contracts of sale or to sign an option to purchase. This may take place within two weeks following the formal acceptance of your offer, however it is more normal to exchange private contracts after thirty days. The private contract, or the option to purchase, will contain all the agreed terms of the offer and sale terms and may also set out the date for final completion of the sale at the notary. It is usual practice at this stage to pay 10% of the purchase price, which normally is non-refundable should the purchaser withdraw from the sale.

Final completion at the notary

A sale is formally completed in Spain when the public title deeds of purchase are signed before a Notary.

The final payment is made from your own funds or from a mortgage and possession is passed to the buyer at this time.

Registration


Once signed, the notary will pass a copy of the title deed to the local land registry.

Your lawyer will also, on your behalf, pay all the relevant transfer taxes associated with the purchase and will handle the formalities of the registration of your title deeds. Final registration of the deed may take up to three months. Similarly, your lawyer can arrange for the transfer of accounts with the local suppliers of utility services such as water and electricity and organize their payment automatically through a local bank if you have not already opened a local account.

The costs involved in property purchase

There are three fees and taxes to pay when purchasing property in Spain. As a guideline, you should budget that the combined total of this amount will be around 10% of the purchase price. The fees are as follows:

Legal fees: min. €1,200- €1,800 or 1% of purchase price whichever is the greater. Value Added (IVA) will be added to the lawyer's fee; this is currently charged at 16%.

Notary fees: the scale of fees is fixed by law and may range from €300-€840, depending on the sale price of the property.

Property Registry fee: as a rule of thumb is 60% of the notary fees.

The taxes are:

Transfer Tax (ITP) is 6% except when buying from a developer or promoter. In this case IVA is either 7% or 16.5%.. The higher rate of 16.5% is applicable when purchasing plots of land, commercial premises or garage spaces.


Plus Valia:

A tax similar to the UK's Capital Gains tax, this is usually paid by the vendor but it may be stipulated in the Private Contract that the purchaser pays. This tax may range from a few Euros to many thousands of Euros on larger properties with large amounts of land. Who actually pays this tax should be discussed in the negotiations and in consultation with your lawyer.

 

TOP OFFER
http://schemas.xmlsoap.org/ws/2004/03/addressing/faultuuid:1351666b-197c-47bc-847b-686517d29493uuid:0da46214-c743-47da-a265-860ce06df83dhttp://schemas.xmlsoap.org/ws/2004/03/addressing/role/anonymous2010-09-03T12:29:18Z2010-09-03T12:34:18Zq0:CountPropertiesCan't perform following service CountProperties. Caller failed to authenticate. Make sure Licence Key is correct. Contact InfoCasa if problem persists.