Valencia Property Home buyer's guide
It is difficult and exciting at the same time to choose a property
to have your home in Spain. However, choosing the perfect place
is not the end: you have to fulfil some formalities until
title of your new home is obtained.
Lawyer
Always look for the guidance of a Lawyer qualified in Spanish
Law. Using a lawyer is the biggest guarantee to avoid unexpected
surprises. Your lawyer will make a "search"of the
property to be purchased and will also get you the most advantageous
deal possible when dealing with developers or any other vendors.
He will keep you updated on the progress of the purchase and
will provide you with full details on all the financial transactions
and the legal side.
Contract
and deposit
Once you have found the property you have been looking for
through your lawyer or an estate agency, the first step is
to make an offer on the house through your lawyer or estate
agent. If accepted, you will have to pay a reservation fee
to take it off the market and to secure the property whilst
negotiations between the parties’ legal advisors are
held. If your offer is accepted, a private agreement will
be drawn up between your lawyer and the seller, in which the
terms and conditions of the sale are stated such as a completion
date and the conditions of the transactions, which should
usually contain an assurance by the sellers that the property
is sold free of charges, tenants and mortgages. Please note
that properties in Spain are free hold, not lease hold as
in the UK.
Completing
the purchase
Our law firm will prepare the documentation required for the
transfer of ownership. On the appointed day buyer and seller,
and/or their legal representatives, meet at the notary’s
office to sign the official transfer of Title Deed from the
Seller to the Buyer .The witnessing of the accompanying documentation
by the notary acts as your legal safeguard. The change of
ownership will be recorded in the official registry and completes
the process, leaving you safe in the knowledge that your property
purchase is official and free of encumbrances.
All
properties in Spain should be registered with the land registry
where you can obtain the exact details of the owner, the size
of the property and details of any mortgages, debts or judgments
against the property. Only the people or company named on
the title deed have the right to sell the property.
For
anything that involves paying tax like owning a property or
a car, or to work in Spain you need and NIE number. This number
is necessary for all non-residents. Your lawyer will be very
pleased to assist you with this matter and solve any other
query that you may have regarding purchasing in Spain.
Spanish
wills
We recommend that you make a Spanish Will to dispose of your
assets in Spain to avoid expensive and complex legal procedures.
Spanish laws protect family heirs in that they restrict the
testators freedom to dispose of their estate to anybody they
choose.
Cost
of purchase
Generally speaking, you have to budget for costs of approximately
11% on top of your Spanish property purchase price. This will
cover solicitor’s costs, notary public fee, land registry,
stamp duty and VAT. A breakdown of all the costs involved
is provided below.
Property
Tax
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 title deeds value. But if you purchase a newly built property
from developer you will pay a different tax called IVA (VAT)
which is charged at 7% of the selling price - plus 1 % stamp
duty.
Discount Property
Most people know that property in spain has been having a hard time recently and that there are some great deals for investment property around if you look hard enough. But you do have to be aware of the discount property which is being over valued and then discounted by the estate agent. This is not a true discount and buyers looking for a good investment need to be sure they are getting a discount from the true price of the property.
Who
Pays What?
The buyer is responsible for:
Transfer Tax (or IVA plus stamp duty when buying from a developer)
Property Registration Fees
Notary Charges
Lawyer's Fees
The
seller is responsible for:
His own Capital Gains Tax on any increase in title deeds value
Plusvalia Tax
Selling Agent Fees
The
normal custom is for the seller to pay the Plusvalia, if however
the buyer agrees to pay this tax, please remember that it
is registered against the land and you will have to pay if
the vendor fails to do so. This tax is often not demanded
until some time after completion.
Information
supplied by Anderson & Asociados Abogados - Property specialist
lawyers in Spain.
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