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| F.A.Q.
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General Conditions |
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THE SIX STEPS TO YOUR PROPERTY
1. Info to check
·Is the property free of charges?
The first step is to go to the Registro de la Propiedad (the land registry) and ask for a Nota Simple of the property you are interested in.
The Registro de la Propiedad will provide the following information:
-Name, adress and I.D number of the owner
-Size of the property
-Any current charges
If your property belongs to a community it is sensible to ask the community admnistrator a certificate stating that all the community payments have been paid.
·Is it affected by an urbanistic plan?
Through an architect you can order an evaluation. It is a certificate made by the Town Hall (Ayuntamiento) in which the urbanistic situation of the property and information about the town hall´s future development plans.
Please notice that only the person whose name is on the Escritura Publica (title deed) has the right to sell the property unless a notarised power of attorney has been given to the third party.
2. A contract to secure the property
Once you’ve decided on a property, you need to assure it by signing the Contrato de Arras (the contract to secure the property) by which you have to make a standard deposit of 10% of the purchase price. You give this deposit as a guarantee that you will buy the property in a completion date.
Among the contract conditions it should be included an assurance by the sellers that the property is sold free of charges, tenants and mortgages (verifying then the information obtained in the first step).
If once this contract is signed you cancel the purchase, you will loose the deposit. However, if it is the seller who breaks the contract, he will have to give you back twice the amount of the deposit. The given deposit will be considered part of the total purchase price.
3. Reviewing legal details
New properties or properties adquired directly from a developer
Developer’s name, adress and inscription date in the Registro Mercantil (Trade Registry)
Plans of the property situationPropety plansLegal
Definition of the property to know exactly what is being sold to make sure that the deeds include the land it stands on.
Propety Registry details: ask for the Declaración de Obra Nueva (the declaration of new construction), together with a copy of the Declaración de Alteración de bienes de naturaleza Urbana (the declaration of alteration of property of an urban nature) in order to demonstrate that the property has been registered for eventual payment of I.B.I.
Copies of the Declaración de Obra Nueva (the declaration of new construction) and the Licencia para la construccion y ocupacion de la vivienda (license for property construction and ocupation) Price and terms of payment
Details of the mortgage subrogation ( if needed)
ContractStatutes of the Comunidad de Propietarios (Community of owners) to know the terms and procedure of the Property Owner’s association and discover if the community has any special rule such as "no dogs".
Second-hand properties
Ownership titles of the owner (title deed…)
Last statement of the IBI, Impuesto sobre Bienes Inmuebles (the annual real estate tax)
A certificate made by the owner’s community estating that all community payments have been paid by the sellerThe latest receipt for the payment of monthly or yearly maintenance charges "cuotas de comunidad" so that you know how much you will have to pay
Nota Simple (an extract from the title)
4. Payment and signing of deeds
You will have to conclude the purchase on the completion date stated in the Contrato de Arras. This step takes place at the notary’s office in whose presence you will sign the "Escritura Publica de Compraventa" (title deeds).
At this point you will also have to make the payments as agreed in the Contrato de Arras, plus notary charges.
Carefully read the contract clauses as well as the rights and obligations for both parties before singning. Note that according to Spanish law, the notary only certifies that the contract is officially made, not that the statements are true for both parties.
5. Registrating the property
Once the title deed is signed, congratulations! you are the new owner of the property. The final step is to have the 'Escritura Pública' registered in the Property Registry Office as soon as possible to prevent a mortgage or other charge being registered against the property while it is still listed in the name of the seller.
6. Who pays what?
BUYER PAYS
Transfer Tax Or (I.V.A. + stamp duty when buying from a developer)
Which of these two taxes is levied will depend on the type of property you are purchasing. The property transfer tax is levied on resale properties and is charged at 7%of the new escritura value in Valencia, and 6% in most of the other Spanish counties. If you purchase a newly built property from a developer you will pay a different tax called I.V.A. (V.A.T.) is charged at 7% of the selling price plus 0.5% stamp duty. If you buy a property from a non-resident person or a company, you must withhold 5% of the purchase price (Withholding tax); The Hacienda make it the buyer's responsibility that this amount is paid to the tax authority in case of any failure by the seller to pay Capital Gains Tax.
Property Registration fees
Property Registration fees is charged by the property registration office to inscribe the new deed into your name. These are based on the official registered value of the property. The length and complexity of the deed and other factors are also considered. The fee does not exceed 1% of the registered value.It is not advisable to try and do this yourself unless you are experienced and speak Spanish fluently.
Notary charges
These are collected by the Notary for preparing the deed and presiding over it's signing. His fee is fixed by law, is on a set scale according to the property value, and whether the property is mortgaged or not, is not normally more then 1% of the purchase price including VAT. Please note all professional fees including the notary's and land registry's charges are subject to 16% VAT.
SELLER PAYS
His own capital gains tax
He will pay 5% to the Hacienda (tax office) on the increase in escritura value from the one estated when he purchased the property to the one agreed for this sell.
Plus valia tax
This tax is based on an officially assessed increase in the value of the land since the last time the property was sold. This can be quite small if purchasing an apartment, but expensive on a villa with a large plot, which has not changed hands for years. Find out the exact amount from the town hall. Do not confuse this tax with the seller's capital gains tax on his profit on the sale.
Notary fees
These are the fees the notary charges for his own work
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