Buyer advice

BUY A PROPERTY IN SPAIN

1.- Before signing the deeds:

• Obtaining a NIE

• Checking the property Registry

• Verification of payment of municipal taxes

• Verification of payments with the community of owners

• Verification of possible debts: i.e - electricity, water, gas...

• Obtaining mortgages and other credits

 

2.- At the signing of the deeds:

• Bring a valid passport

• Provide NIE

• Proof of payments made before signing the deeds

• Proof of the means of payment at the signing of the deeds

• In the case of a non-resident foreigner, a bank certificate of origin of the money.

• The seller must produce the certificate of the community of owners

• Proof from the seller of the last urban tax payment receipt

 

3.- After signing the deeds:

• Withdrawal of the deeds from the Notary

• Payment of taxes within 30 days from the signing of the deeds

• Presentation of the deeds for registration in the Property Registry

• Notification to the Cadastre of the change of owner of the property

• Communication to the Community of Owners of the details of the new owner.

• Procurement of supplies: Electricity, water, gas… 

 

4.- Expenses:

• Notaries.- Approximately 0.25% of the sale price

• Registry.- Approximately 65% ​​of notarial expenses

• Lawyers.- Your use of a lawyer is not mandatory (but recommended), it is usually 1% of the property price plus VAT

• The Spanish legal system guarantees the legal security of the owner of a property. To access it, it is necessary to carry out a series of actions in order to register the purchase of the property in the Property Registry, in such a way that this Registration will guarantee your property right against third parties.

• There are three phases:

1.- Before the signing of the deeds before a Notary Public.

2.- Signature of the deeds before a Notary Public.

3.- After the signing of the deeds.


1.- Procedures before signing the deeds:

• In the event that the buyer is a non-resident foreigner in Spain, they must have a residence card (even if they are a Community citizen) and be registered with the Spanish treasury, paying taxes in Spain as a resident. In addition, they must have their valid passport when signing the deeds and the Foreigner Identification Number (NIE), a document that must be requested at the offices of the Police Station of the area where the property to be purchased is located.

• The NIE is an administrative number issued by the Ministry of the Interior that is essential to settle the taxes inherent to the sale. The NIE must be requested by the buyer, although it is possible to process it through an attorney expressly empowered to do so by means of a power of attorney granted abroad, since the powers granted in Spanish territory are not being admitted to process the NIE on behalf of the buyer. As well as the specific form, it is necessary to provide the original and a copy of the powers of attorney, if posible the original passport and a copy from the buyer (a consular or notarized copy of the passport is valid) and a copy of the document that justifies the NIE (which in this case would be the private contract of sale), although in the case of EU citizens it is not necessary to provide a copy of the contract.

• In the event that the buyer is a foreign company, the corresponding CIF (Tax Identification Code) must be provided in order to acquire a property, there being no significant differences with respect to a buyer. The most significant differences will occur when the owner company sells the property, since it will include VAT to the Price.

Before signing any document that links the buyer to the property, we must make sure that it does not have any debt attached, for this we will request a Simple Informative Note from the Property Registry where the property is registered. In the case of newly-built houses in which it is contracted before the individualization of the different apartments, it can only be requested on the original property, in order to know if there are charges or encumbrances that the apartments or plots will be responsible for in the future.

• It is necessary to check if the property is up to date in the payment of community fees, where they exist and are charged (generally not in the case of newly developed homes), as well as the statement of accounts with the corresponding City Council, in order to ensure that there is no debt in the Real Estate Tax, Garbage Collection Rates or any other rate or tax that each City Council may impose.

• The corresponding procedures must be carried out to obtain mortgages or other credits, if necessary to finance the purchase.

• It is necessary to sign, prior to the signing of the deeds, a private contract of sale, purchase option or deposit, in which the price is set, the specific property to be purchased is determined and the conditions under which it will be carried out (term of writing, distribution of expenses...), clearly determining if the price must include VAT, as is the case of newly built properties, and the applicable rate, depending on the type of property and its characteristics.

 

2.- Signature of the deeds before a Notary Public.

• This phase consists of signing the document before a Notary Public, which allows us to register the property in our clients name. This document must include the conditions agreed for the sale and the following documents must be provided at this stage.

• Valid passport

• NIE

• Proof of payments made before signing the deeds, a legal obligation imposed to avoid money laundering

• Proof of means of payment of the amounts paid upon signing the deeds (checks, bills of exchange, promissory notes, transfers, mortgages...)

• If you are a non-resident foreigner, even if you are a community citizen, you must prove the origin of the total funds of the purchase, both the amounts paid before the signing and those delivered at the signing of the deed. The bank that has issued the funds must certify the origin from a non-resident account, on whose behalf they have been received and for the purchase of what specific property (investment certificate).• Contribution by the seller, a certificate from the community of owners, certifying that the house is up to date in the payment of the installments, although, generally in the case of newly built houses, the payment obligation does not exist until all properties have been sold.

• Contribution by the seller of the last urban tax payment receipt (IBI), whose payment term has already expired, in which the cadastral reference of the property that is being sold appears clearly.

 

3.- After the signing of the deeds.

• Regardless of the tax obligations of the seller, the payment of the municipal capital gain will be taken from their account, it is usual for the buyer to pay all the expenses of the sale, although the parties can agree other distribution of these charges before the registration of the purchase. The procedures after the signing of the deeds are:

• Withdrawal of the notary's deeds. The notarial expenses of the deed of sale usually represent 0.25% of the sale price, although they may vary depending on the number of pages of the deed, the number of sellers and buyers and the number of properties that relate to the sale.

• Payment of taxes within 30 days from the signing of the deeds, before the Office of the Junta de Andalucía located next to the Property Registry corresponding to the property, the rates to be paid are:

• 1% of the purchase price in case of properties with VAT (AJD);

• 8% of the price in case of purchase of real estate without VAT (ITP);

• Presentation of the deeds for registration in the Property Registry corresponding to the place where the property is located. Registration expenses representing approximately an amount of around 65% of notarial expenses.

• Notification to the Cadastre of the change of owner of the property.

• Communication to the Community of Owners of the details of the new owner.

• Contracting of supplies – Electricity, water, gas…

• Lawyers' fees (n the case of using this service) usually represent 1% of the purchase price plus VAT.

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