Find a Lawyer
Find a lawyer.
Every now and then someone asks us what we know about property law. Like Manuel from the British t.v. series; 'Faulty Towers' says, ............"I know nothing".
Oh all right, we can tell you the process of buying and selling a Spanish property because we have accompanied clients to the local solicitors' office, in the 'olden days' when we were estate agents!
So our most important tip to you is - find a lawyer or trustworthy solicitor in the country you are thinking of buying property, who knows the job and speaks your language.
It is also better to find a lawyer based in Spain, rather than a lawyer/solicitor from your home country as this could substantially increase your legal fees and will most probably delay the sales process.
A lawyer will check that the property you are interested in is free of encumbrances and debts and that all local contributions and community payments are up to date.
We don't want to bore you, but for those of you interested in knowing the basic process, it is explained here in three stages. Find a lawyer.
Once you have found the right property, the purchase process begins with a reservation agreement, which takes the property off the market and freezes the purchase price. The deposit to pay at this stage varies (anywhere between 3000 and 10.000 Euros), depending on the price of the property, the vendor and the estate agency.
Within twenty-eight days of signing the reservation agreement, the private purchase contract is to be signed between the buyer and the seller (or their authorised representatives). During this time the lawyer should have completed the investigations and searches of the property and will have arranged with the seller for the cancellation of any outstanding debts. It is customary practice at this point to pay between 10% and 50% of the purchase price.
Stage three:Find a lawyer.
A property sale is formally completed when the title deed escritura de compraventa in Spanish) has been signed before a public notary and the final payment has been made. The possession of the property then passes to the new owner. Once the title deed has been signed, your solicitor will pay, on your behalf, all the relevant transfer taxes and will deal with the formalities of registering the title deed. Final registration of the title deed may take several months. Your solicitor can also arrange to transfer the payments of the utility services such as the water and the electricity bills to your name, through your Spanish bank account.
The standard fee of a Spanish solicitor is between 1% and 1.5% of the purchase price, depending on the work involved, plus I.V.A. (V.A.T.) currently charged at 16%. This fee applies whether you are buying or selling.
For the total costs of purchasing a property in Spain click here.
SELLING A PROPERTY: Find a lawyer.
The capital gains tax is due on the sale of a property. The tax is calculated on the difference between the value of the property at the time of its acquisition and the value at the time of its sale. Since January 1, 2007, the tax rate is 18% for residents and non-residents alike.
If the vendor is a non-resident in Spain, the purchaser will need to retain 3% of the purchase price and pay it into the Tax Office Treasury on account of the potential liability to Capital Gains Tax. Your solicitor will inform you about existing exceptions.
Plus Valia (meaning the tax on the increase in land value since the previous sale) is normally paid by the vendor.
We strongly advise you to find a lawyer. ALWAYS use a solicitor/lawyer when you are buying or selling a property in Spain. The 1% to 1,5% of the purchase price is more then worth it, to avoid pitfalls which could cause a lot of stress and cost you a small fortune!
So don't forget; "Find a lawyer, find a lawyer, find a lawyer!"
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