The Spanish property conveyancing system is different to many other countries, so you should seek advice from an independent lawyer who is specialised in real estate and land law and can speak your own language. In Spain, a property purchase is a process that can be broken down in several steps:
Collecting background information:
The first step is to request a Nota Simple from the Land Registry (Registro de la Propiedad). A Nota Simple is a standardised report describing the property in all its aspects, including:
- Present owners and the percentages of ownersh
- Debts, liens, charges and rights on the property. For example, mortgages or claims for unpaid taxes.
- Any type of rights on the property, like rights of way.
- Boundaries of the property.
- Total area of the land, and of the house, including the area on the different floors.
- Land classification: rural or urban
- Description of the property including the house, and any installations, e.g. tennis court, swimming pool, etc.
- That there are no legal proceedings initiated against the property for contravention of land planning law.
It is important to check that the description in the nota simple is in accordance to the real conditions of the property, as large differences could be the result of non-declared works or illegal buildings.
Since 1st of June of 2013, all properties for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are considering buying a property, the seller is obliged to provide this certificate.
If you want to let your property in Andalusia on a short-term basis (holiday rentals), since the 11th of May of 2016 you must ensure that you are doing so in accordance with Spanish law and inscribe the property in the registry of the Junta de Andalusia. One of the documents requested hereby will be the license of first occupancy.
When the seller is a company, it is important to check for solvency in the Commercial Registry and identify who is the signatory for the company.
If there are community charges, it must be ensured that all payments are up to date. If it transpires that this is not the case, the new owner is responsible for the debts of the last two years. A check must be made that the local municipal taxes (IBI) are paid, all other possible debts are paid, and mortgages are cancelled.
Many lawyers recommend using a chartered surveyor to check the property. This is not obligatory, but it is wise to obtain a professional opinion on the property, before you undertake to buy it.
Private contract:
Unless the property is purchased immediately, the buyer and the seller will sign a private contract to hold the property until the public sales deeds are signed. In practice, it is a contract of intent, which protects the interests of both parties before the deeds are signed. Normally, the buyer will pay the seller or his lawyer, a deposit (a percentage of the final price, usually 10%) in exchange for the right to purchase the property within a specific time. If the buyer breaches the contract, he will lose the deposit, while if the seller breaches the contract, he will have to pay double the amount of the deposit to the buyer.
Signing of the deeds:
The property transfer and, if necessary also the mortgage deeds, will be signed at the notary office. The public notary attests the identification and capacity of both parties, reports on key aspects of the sale, explains the consequences of not paying taxes, etc. The public notary is not a substitute for a lawyer (who will make sure that the correct legal verifications are done and who represents the interests of his client). In case a Spanish mortgage will be signed, a representative of the bank with a valid power-of-attorney will be at the notary office at the signing of the deeds in order to sign the mortgage deeds with the buyer or the buyer’s legal representative. If the seller has a mortgage on the property, the representative of his bank will be there to cancel the previous mortgage.
At the notary the property is officially handed over to the buyer or his representative, this means the rest payment is made by banker’s draft or previous bank transfer to the seller and the seller hands over the keys of the property to the buyer or his representative.
Taxes and Fees
The buyer will have to pay:
For resale properties in Andalusia:
Transfer tax:
From 0.00€ to 400,000.00€ = 8% transfer tax
From 400,000.01€ to 700,000.00€ = 9% transfer tax
From 700,000.01€ and above = 10% transfer tax
This tax can vary in different autonomous regions.
For newly built properties in Andalusia:
VAT of 10% and stamp duty of 1.5% of the price of the property. The stamp duty can also vary depending on the autonomous region.
In the mortgage deeds the amount of taxes to be paid in Spain varies in each region, in Andalucía it is 1.5% of on the mortgage responsibility.
Notary and Land Registry fees, if not otherwise agreed, (notary fees can be agreed).
The seller will pay:
the plusvalía (the local capital gains tax) and
the Central Government capital gains tax. If the seller is not fiscal resident in Spain, the buyer is legally obliged to retain 3% of the property price and pay this amount directly to the tax office on the vendor’s behalf.
Fees for the energy efficiency certificate
Fees of the real estate agency, if any involved.
All taxes must be paid within 30 days from the date of signing the deeds at the notary office.
Land Registry
Finally, the new deeds will have to be registered at the Land Registry. The Land Registry will notify the bank’s legal representative and the notary, if the deeds have any defects. Normally the parties attending at the signing of the mortgage deeds at the notary, grant a power-of-attorney to the bank’s representative to modify the mortgage deeds or clarify any issues related to the terms and conditions where necessary, based on the request provided by the land registry office.
Cadastre
Within two months after signing the title deeds, the change of ownership must also be reported to the cadastral office. This must be made by filling out form 901N.
Change of the suppliers’ contracts to the name of the new owner
After signing of the deeds, the existing suppliers’ contracts (like water, electricity, telephone, internet etc.) and insurance(s) must be changed to the name of the new owner or must be cancelled, if not needed.
Recent Comments