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Buying in Spain
For many years, we from LINK REAL ESTATE INTERNATIONAL have already been known for our absolute smooth and transparent handling of mediation deals. At ours, `Service to customers´ is not only a cliché; rather all our endeavour is directed at the purpose to fully satisfy you - also after purchase.
What do you have to take account of when buying property in Spain? The purchase of property in Spain should shortly be outlined in the following:
1. Purchase of property in Spain
Citizens of member states of the European Union are not subject to any restrictions when purchasing property in Spain. In general, they have the same rights in Spain as locals. If they are registered as proprietor in the land register, they get the same absolute protection with regard to their property - as well as in Great Britan.
2. Handling of purchase
According to Spanish law, there does not exist any obligation in form when purchasing property. Even oral contracts of sale may be permissible and legally valid. Custom in Spain is the conclusion of a contrato privado, a privately written contract of sale.
Privately written contract of sale
The purchaser receives the property by handing over the escritura pública de compraventa, the notarial contract of sale. This official form of contract is pre-condition for entering the registro de la propiedad, the land register. With the privately written contract, all fundamental regulations concerning purchase are arranged. Especially the date is fixed until which at latest the escritura pública de compraventa should have been drawn up and by this the property should be handed over.
Deposit
At the same time of concluding the privately written contract of sale, a deposit is demanded. Common practise are ten percent of the purchase price.
Financing
The time between the conclusion of the privately written contract and the notarial documentation is used to prepare financing if necessary.
Investigation
All our offers have already been checked before your viewing; to be precise we check if there are any mortgages on the property and if there does already exist a right of first refusal for this property. In order to guarantee that you as legal follower will not have to pay for mortgages of the previous proprietor, the presentation of a documentary evidence of the property tax (IBI) and the local tax of the previous year are demanded.
Date with the notary, Escritura, purchase price
Three days before the notarial documentation, the notary demands an extract from the land register. With the sending of the extract from the land register, the property is blocked for five days. If another notary also demanded an extract from the land register for the same property at that time, this would be rejected by the registry with an appropriate hint.
Land register
At the date with the notary, both the purchaser and the seller, have to prove their identity. Thereupon the notary reads out the prepared document and notes that the price of purchase has either been paid before signature the escritura or is paid at that moment.
On the very same day, the notary sends an announcement about the contract of sale to the land registry. A copy of the escritura, he later hands over for the registration in the registro de la propiedad.
3. Costs for purchase and following
The basic rule is: The purchaser pays for everything - even if the law says that seller and purchaser have to come to an agreement about the costs.
Appreciation tax
This is also valid for the plusvalia, the appreciation tax. In this case the law also says that the seller has to pay the tax when this point has not expressively been dealt with.
Therefore the costs for the whole purchase are:
If you put into your calculation additional costs of purchase of ten percent of the purchase price, that is usually sufficient and you are on the save side with your calculation.
Which taxes have to be paid when purchasing?
Apart from the above mentioned plusvalia another tax arises: When purchasing from private individuals (second hand object) the transmisiones patrimoniales, the land transfer tax, at the rate of seven percent, when purchasing from a property developer (new building) the impuesto valor anadido (IVA) , the value added tax, at a rate of seven percent.
Overview of costs
The costs of purchase, applied to the documented price of purchase, are made up as follows:
Land transfer tax 7% or IVA. 7%
Fees for the notary and the registration 1 to 1,5%
The annual following costs, applied to the documented value of the property are made up as follows:
Wealth tax 0,2%
Income tax 0,5%
Property tax 0,4 to 0,8% (depending on the particular object and on the land registry)
We would be glad to give detailled information to You in a personal conversation. Make use of our extensive experience with foreign countries and our professional acting. We are looking forward to a successful cooperation with you.
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