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How to Buy Property in Spain

01.01.1970 03:00

  1. Property selection. Our managers provide professional consultations on all aspects of purchasing.
  2. Visiting the properties with company specialists who live and work in Spain.
  3. Checking the following documents:

    - The private purchase contract (Escritura de compraventa). It contains the following details: the seller and the purchaser info, a legal description of the property, price of the purchase, means of payment, date of completion the conditions of the purchase. It is registered at the Property Register and is the only guarantee of title in Spain.

    - The Land Registry extract (Nota Simple) that proofs that the vendor owns the property and that it is free of charges and there are no debts or charges, on the property.

    - A paid-up receipt for the annual property tax (IBI). The IBI receipt shows the property’s fiscal reference number (Referencia Catastral) and the value for tax purposes (valor catastral).

    - Formal notarised declaration of new building works (Declaracion de obra nueva). When purchasing an apartment or a flat visit local municipality to check the development plan. If you are financing your purchase by way of a mortgage it is important to contact a bank and provide it with all mentioned papers.

  4. Signing a Sale & Purchase Pre-Contract (Pre-Contrato de Compraventa). At this stage a deposit is paid - usually up to 10% of the purchase price. Ensure that this pre-contract agreement is made under an ‘arras’ agreement. In this case if the purchaser retracts fr om the agreement, he will lose the deposit. If the vendor breaks the contract, a sum equivalent to twice the amount of the deposit will be paid to the buyer in compensation.
  5. Getting Spanish ID Number (NIE) - all-purpose identification and tax number in Spain by the time you sign the deeds of purchase before notary - the escritura. The Spanish tax authorities are unable to assess or process annual tax payments declared by property owners without an NIE number. An application for a NIE can be made in person in Spain at a national police station.
  6. Signing the public deeds of sale (Escritura publica de compraventa) before a Spanish Notary. It is necessary to convert this private contract into a public deed to register the property, because a private contract cannot be inscribed in the Property Register and may not be accepted by third parties as proof of ownership of the property. The notary confirms that the transaction is made under the relevant legal requirements and that the necessary taxes have been paid. He also witnesses the signing of the papers. All parties of the contract must be present to sign the public deeds of sale at the notary’s office, including a bank representative if the purchaser is arranging a mortgage. After that a buyer pays the balance of the purchase price and all necessary fees. After the escritura has been signed the notary will give you a simple copy of the escritura - a copia simple. Once this is done the property is yours and you can have your title inscribed in the land register.
  7. Registration of ownership in Land Registry. The notary will send the first copy of the escritura (primera copia) and the receipts for the taxes paid to the Registro. Once the first copy of the escritura has been fully registered it will be allocated its registration number, stamped and returned to the notary, wh ere the new owner can collect it. Usually this process takes a couple of months.
  8. There are some fees and taxes payable on any property purchased in Spain. There is no Spanish law stating what party has to pay the taxes due on any property transaction. Traditionally the seller pays the Capital Gains Tax on the sale and Plus Valia. The buyer normally pays the Property Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) - 7% of the value declared in the contract and notary fees (vary depending on the amount of land, the property size and the price of the property). The property Register will be updated with the new buyer’s details once the transfer has gone through and the charges for this will be similar to the costs for the notary.


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