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Buying a Property  For most of us, buying a property is a major investment that is complicated in any country. In Spain, the legalities of property purchase may seem particularly daunting if you are a foreign resident and unfamiliar with both the laws and the language. The procedure is in fact quite simple and Siesta Estates will be able to provide a seamless transaction for both buyers and vendors alike. Use a lawyer This is the first crucial step. Although it is not legally obligatory to use one, we always recommend it. A good lawyer can guide you through all the steps of house purchase, from ensuring that the purchase contract is correct through to negotiating payment terms, taking care of the title search and ensuring that your house is registered in the property registry. Siesta Estates have their own lawyer who will be happy to guide you through the process. Deposit Once you have found your dream property the most important next step is to secure it by paying a deposit. This is generally 10% of the total purchase price which will normally be paid directly to the vendor. This will be paid at the signing of the buy/sell agreement or Contrato Privado Title Search The Nota Simple is the title search and you would usually see two of these. One before the signing of the Contrato Privado agreement and the second the day of completion. This document is issued and controlled by the Registry Office and contains all details of any outstanding debts and any mortgages that have been incurred on this property. We, as a company order a 'Nota Simple' from the outset to validate registry, ownership and property information. Check the Town Hall Property in Spain is subject to an annual municipal tax – IBI and the seller will provide the up-to-date receipts which will state the exact amount of this annual tax, as well as the Valor Catastral, which is the official value of the property. Plus Valia A Municipal Tax known as Plus Valia is assessed on the difference in value of the property now and the last time it was transferred. This varies according to the time elapsed since the last transfer. This is the obligation of the seller to pay although sometimes it is negotiated that the buyer will be responsible for this amount. Your lawyer would advise you if this is the case and negotiate on your behalf. Costs of Purchase It is normal to base you buying costs on approximately 10% of the overall official value of the property. This will cover the Notario fees, the registry of the property in your name, your lawyer fees and 7% property purchase tax. If you are purchasing from a non-resident, Spanish law requires you to withhold 5% of the purchase price which your solicitor will pay to the Spanish tax department, Hacienda, as a guarantee of payment of the sellers Capital Gains Tax. If the tax amount is lower than the deposit, the seller can claim the difference from Hacienda. The Contract or ‘Escritura’ The completion of the sale must legally take place in front of the Spanish Public Notary. This contract must be in Spanish although you would be able to get this translated into English if you wished through an Official Translator. This legal property purchase contract is called ‘Escritura de Copmpraventa’ and is signed by both parties at the Spanish Public Notary who will keep the original copy of the contract in his files. The contract will describe the property and it’s location in detail, as well as the identity of the purchaser and seller. If the purchase is financed with a mortgage, the bank representatives are present to pay and sign the mortgage. The final step is to take your copy of the Escritura to the Property Registry and have it officially registered, at which time you will obtain your Escritura Publica, the title deed. The property is now legally yours… Well done! |
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