Conveyancing transactions can be a stressful and long drawn out process and more so in a foreign jurisdiction. The process demands professionalism, legality, and procedural approach. For this reason, it is of the utmost importance to instruct highly qualified professionals who speak your language, to assist property purchasers and vendors navigate successfully through the legal complexities of the process of property purchases and sales in Spain.
We aim to simplify the process by supplying clear, practical advice. Our transparent and complete legal research ensures that you will be assisted in making the right decisions at every stage of your property purchase or sale in Spain. You will have a clearer idea if the purchase or sale transaction can easily proceed or if there are certain important matters to be considered and you will have a general quotation of costs, legal fees and any taxes due.
Preparing your purchase
Private Purchase Contract
We will review the private contract for you prior to you signing it, explain its terms and legal obligations to you and advise you on whether or not it is in your interests to sign it.
Power of Attorney
We will ask you to provide us with a Power of Attorney (POA) either in Spain or from the country of your residence, and this will allow us to manage all processes in relation to the property purchase on your behalf.
NIE (Número de Identidad de Extranjero)
All foreign citizens who intend to realise any economic, professional or social activity in Spain must be issued with a NIE, a Spanish fiscal identification number that is mandatory before any foreign citizen undertakes any type of activity in Spain. We can easily obtain your NIE on your behalf from the Immigration Department of the Spanish National Police Force, once we are in receipt of your POA.
Open a Spanish Bank Account
You will need a Spanish bank account to purchase a property in Spain and to pay for any consequent utility invoices. Again, via POA we can open your Spanish bank account and explain any queries you may have in relation to the account.
Financing your purchase – mortgage
If you require financing for your purchase, we are able to assist with mortgage applications. The Bank will require documentary evidence from you confirming who you are, and you fiscal situation in terms of income and debts. The Bank will provide documentation that will clearly outline and confirm the terms by which the loan has been agreed
Our team of professionals will perform an extensive legal research of the property in question and ensure that you are buying a legal and safe property and that your interests remain fully protected.
We will verify for resale:
- The legal identity of the owner of the property you intend to buy
- The land registry extract with boundaries and square metres of your land
- Check if details match: ownership, features of the property
- If there this a mortgage or liens, encumbrances, debt linked to the property
- If there are legal proceeding linked to the building
- Verify that the property has been granted the corresponding municipal building permit and habitation licence (Cedula de Habitabilidad / Licencia de Ocupación) by the Town Hall in question, and respects local urban planning rules.
- Verify there are no environmental restrictions placed on the property
- That the property is free from charges
- That the property is free from tenants
- All utility invoices paid by the previous owner
- All community charges paid by the previous owner
- All previous council tax paid by the previous owner
- Obtain the energy efficiency certificate from the previous owner
We will verify for new build (off Plan) property purchases:
- Obtain a Planning Certificate for the plot from the Town Hall and check for building restrictions on the plot or any potential negative developments to come.
- That the promoter has an individual bank guarantee to cover your payments
- There is permission to develop the plot at the Land Registry
- That the developer is registered in the Mercantile Registry
- That the representative of the developer has the legal power to represent the company
- That the property is free from charges: (mortgages, liens, encumbrances, etc.)
- That the developer has an insurance covering damages caused by structural defects to the building
- That the construction specification or quality specifications are made available to the buyer and included in annexe to the purchase agreement.
Final Breakdown of Figures
Closer to the completion date, we shall provide you with a breakdown of figures detailing all costs and expenses relating to your purchase.
Completing your Property Purchase
All property transactions in Spain are completed in front of a Public Notary, where we will attend and sign the property on your behalf. A Public Notary is a highly trained legal professional, whose role is to verify that all of the documents are authentic and correct, that the whole process goes according to the Spanish law and protects all parties. Furthermore, under Spanish law a Notary’s signature is required to elevate the escritura (public deeds) so that they are able to be inscribed in the Land Register.
Purchase Taxes and Fees
We shall arrange all of the necessary payments in relation to your property purchase
Registration of Deeds with Land Registry
Once the property purchased has been finalised at the Notary, we will register the deeds on your behalf as proof that you are the new legal owner of the property.
Utilities & Services
All utilities such as electricity, water, gas, are transferred correctly into your name so you can start enjoying the property right away. We shall also arrange the future payments of your IBI (Council Tax), and where applicable community fees.
Once you have purchased your property, you will need to ensure that you are aware of, and fulfil, your tax obligations in Spain.
You may be required to pay community fees – this is for the upkeep and general good condition and repair of communal amenities situated on an urbanisation or apartment block. You will have a President who is in charge of the Community and who will contact you directly in all matters associated. There will be an annual general meeting every year. The payment of these fees will be via direct debit from your Spanish bank account.
Planning ahead – making a will, renting your property
Inheritance planning is a smart step to take after purchasing a property as it will act as a safeguard against any eventualities in the future.
If you are considering renting out your Spanish property, you will be liable for tax and there are Regional Tourism obligations to comply with and it is important to be advised correctly.
Selling a property
Debts and Encumbrances
We identify potential debts associated to the property and liaise with the bank to ensure cancellation of any mortgage
Certificates and Licences
We obtain the necessary certificates from the Community of Owners and the Town Hall, including the Energy Performance Certificate and any arrange any licences needed.
We will inform you of the tax payments connected with the sale. Depending upon your fiscal status in Spain will determine which taxes you will be liable for
Non-residents – 3% is retained form the purchase price and this is paid directly to the Hacienda. If you are selling at a loss, we can request to the Hacienda that they refund the 3%. If you have sold and made a profit, then you have to pay a Capital Gain Tax.
Residents – for residents the declaration of the sale is completed in the following year´s La Renta declaration.
Plusvalía – this is a municipal payment levied by the Town Hall. It is calculated on the Catastral value and the number of years since the property has changed ownership.
Capital Gains Tax: When you sell a property in Spain you have to pay capital gains tax on any profit after taking into account all deductions and allowances.
If you are a non-resident you will pay 19% capital gains tax in Spain.If this 3% exceeds the tax due on the gain, a repayment will be made of the excess. However, if the tax due is more than the retained amount, further tax will be due – capital gain.
If you are a resident in Spain you will need to declare your capital gains as a part of your annual tax declaration and the rate you are charged will be based on your overall income.
Final Breakdown of Figures
Closer to the completion date, we shall provide you with a breakdown of figures detailing all costs and expenses relating to your sale.
Completing your Property Sale
We arrange for the signing of the public deeds at the Notary. If we are granted Power of Attorney, we will proceed to the office of the Notary and sign the public deeds on your behalf. If you so wish, we can accompany you and provide any assistance should you require, including translations.
We consolidate all your outstanding tax payments that are connected to the property and sale.
If required, we conveniently close your Spanish bank account using the Power of Attorney, and we can assist you in transferring your assets in accordance with your instructions.