facebook Google Plus twitter Pinterest Youtube english español deutsch français Pycckuй Netherlands Svenska Norsk Contact Hansa Realty

BUYING A PROPERTY IN SPAIN SAFELY

Dear customer, maybe you always dreamed of buying a property in Marbella or somewhere else on the magnificent and sunny Costa del Sol and this is surely the perfect moment to move ahead, due to the current market situation, but of course it is important to do one step after the other.  

Buying a home in Spain is not like buying a car or another consumer product. It needs some specific knowledge of the market. Often this means that different professionals will give you legal, financial and tax advice.

Every day more and more buyers decide to involve their lawyer, their real estate agent or their tax advisor in this process. The lawyer and the real estate agent are the professionals with most experience in this field. It is important to stress that the purchase process in Spain differs significantly from the purchase process in other European countries, such as the United Kingdom, Germany, Holland and Belgium. For this reason, it is vitally important to use Spanish lawyers in the process of purchasing a property.

After all, the purchase of a home in Spain should be the start of a long worry-free holiday, and not the start of a long legal process. This article points out some of the main aspects to be considered. It is important to make clear that we will only focus on the most relevant points here.

Is the seller the owner of the home?

It is essential that sellers have full ownership of the home that they are selling; otherwise, they cannot transfer their property. Before signing a private contract and (usually) paying 10% of the purchase price in advance, we should ensure that the seller is indeed the owner of the property, as specified in the pertinent registers. The real estate agent will require the property title deeds from the seller in accordance with the Spanish legislation and the lawyer will verify these documents.

Is there a mortgage on the home? 

In our firm’s everyday practice, it is not unusual to find purchasers who are surprised to discover a mortgage belonging to the previous owner. They decided to make the purchase without a lawyer, who would have checked for any encumbrances on the home before the signing of the purchase deed. 

Are there any tax debts associated with the property?

 

There are various encumbrances that are not only associated with the seller, but also with the property itself.

IBI (property tax) – rubbish collection – tax on non-residents

The municipal property tax (IBI), the tax on rubbish collection and the non-resident tax tend to be a common problem. For example, Mr Smith is not a resident, and he decided not to pay local taxes and even forgot to pay the non-resident tax for a number of years. When Mr Smith wanted to sell his house, he found he had an enormous debt and surcharges on the property as a result of the non-payments. The purchaser obviously refused to pay for the purchase of the home until the matter was settled. This is therefore an important aspect to be taken into account by both the purchaser and the seller.

Capital Gains Tax

As you may know, as a result of the sale process, the seller is held to pay a tax of 19% (it was 18% before) on the difference between the purchase price and sale price. If you buy the home of a non-resident, the law stipulates that the purchaser is obliged to ensure that this tax is paid by withholding 3% of the purchase price.

Plusvalía

Plusvalía is a tax on the increase in value of urban land. It is paid by the seller. As in many cases, the seller has not paid this, it is essential that your lawyer establishes some guarantee to ensure it is paid before the actual purchase. The plusvalía tax is an aspect that is often forgotten by those who are not experienced in the purchase process.

Is there a homeowners’ association?

Unlike in other European countries, in Spain most houses and flats form part of a homeowners’ association. Each home must make a payment to the association as an annual payment for the maintenance of property held in common, such as staircases, swimming pools, concierge, etc. The annual amounts vary significantly, from fifty Euros per month (in a modest block of flats) to 400 Euros per month, in the case of a luxury estate with a large number of services. Owners often do not make these payments and have to sell their property to pay the resulting debt. You should therefore look for the necessary guarantees to ensure that the home you are buying is also free of these kinds of charges.

These are only some of the aspects to take into account. You should be aware that you have a whole range of means available to minimise possible legal contingencies and ensure that the purchase process is simple, stress-free and free from any future costs that could have been avoided.

Lexland Abogados

Real Estate Department

Tel. 952778899 marbella@lexland.es

 

 
 

Published in Events and Hansa Realty News, Spain Info |