Buying Property Guide Costa del Sol, Marbella income tax property tax lawyers
In order to protect your best interests when buying a property in Spain, it is essential that you engage the services of an English-speaking Spanish Lawyer.
Once you have found your ideal property there are a series of steps to completion:
Land Registry Searches The lawyer will carry out all the necessary searches at the land registry to establish the status of the title to the property and if there are any charges, liens or encumbrances on the property.
Professional and personal advice The lawyer will then advise you of the best way to purchase your property depending on your circumstances. This could be through a national or foreign company, in your private name, jointly with your spouse, family or friends. The lawyer can also assist you with the application for a fiscal number (N.I.E. for non-residents) which is required for any property assets in Spain.
Reserving the Property The vendor will usually require a Reservation Deposit. The amount can vary but is most commonly 6,000 euros. This deposit is non-refundable unless otherwise agreed.
Private Purchase Contract This is similar to an Exchange of Contract in the UK and usually takes place within 14-28 days of the Reservation Deposit. The lawyer will draft the contract stipulating the terms and conditions of the sale. For a resale property it is usual to pay 10% of the purchase price less any deposit already paid. For a purchase off-plan or from a developer the payment would normally be in the region of 20-30% but terms will vary from one developer to another.
Title Deed This usually takes place within a month of the Private Purchase Contract. In Spain, legal transactions take place at the Public Notary. A new Title Deed (Escritura) will be drafted for signature in front of the notary. All interested parties will be present including any finance companies for the buyer and seller, if applicable. Ownership of the property passes to the new owner at this time.
Power of Attorney Sometimes, it is not convenient for the buyer to be present at the Public Notary. The lawyer can sign on your behalf with a Power of Attorney. This can be arranged simply at the Notary on a previous visit or can be obtained in the buyers home country.
Costs In addition to the purchase price of the property, you must take into account:
Transfer Tax or VAT (I.V.A), depending on whether it is a new or re-sale property. Notary and Legal Fees These will depend on the value of the property/transaction. Land Registry Fees & Stamp Duty which is 1% of the value of the property/transaction. Municipal Plusvalia Tax A tax on the increase in the rateable value of the property since the last transaction and paid to local authorities.
As a general guide, when buying a residential property in Spain, you should account for costs of about 10-12% of the purchase price. In the case of a commercial property or land purchase, the costs may be higher if VAT is to be applied. Once you have completed your purchase and your Title Deed has been presented to the Land Registry for final inscription, you lawyer will continue giving you further advice and assistance. As a property owner in Spain, you are also required to make certain tax returns each year, which your lawyer will also prepare for your on your instruction.