Purchasing Property in Spain - Legal Advice

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Properties in Spain

 

 

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Lawyers in Spain

Using the services of a lawyer is of utmost importance. They will ensure your safety during the purchase and will work on your behalf in closing deals with the vendors. If you give them power of attorney they can sign on your behalf, set up direct debits for all the utilities such as electricity, water, gas, rubbish collection, town hall tax, etc. We can recommend professional and experienced multilingual lawyers that we and our clients have worked with over the last 20 years.

 

Steps to Purchasing:-

Once you have agreed upon a price with the vendor, a deposit is put down, with your lawyer, of around 6.000€ to take the property off the market. Within approximately 2 weeks your lawyer will draw up a private purchase contract, called an “Option Contract” in your own language. This is signed, at which time you will pay 10% of the agreed sale price, less the deposit already paid. A date is agreed, normally between 5 to 8 weeks later, for the signing of the Title Deed at the Notary’s office (remember, if you do not wish to attend, your lawyer can represent you after having received power of attorney). There, you will get the keys to the property. It is now yours.

 

Taxes on purchasing a property,

(between 10% and 12% of the purchase price):-
  • Resales (Transmisiones Patrimoniales) Transfer Tax.
    • 8% up to 400.000
    • 9% 400.000 to 700.000
    • 10% 700.000 upwards
  • New properties 10% VAT.
  • AJD - (Actos Juridicos Documentados) 1,2%.
  • Notary and Property Registry 1%.
  • Legal Fee 1%.
  • Costs for exchanging contracts, updating installations i.e. electricity, water, telephone, etc.
  • Stamp Duty (only new properties) 1%.
  • N.I.E. is a Spanish ID for foreign residents. If you are buying or selling a property in Spain you need to have this number. This is given from and applied for at the local police station, Policia Nacional. We can also recommend different “Gestores”, or legal administrators, who can assist you in this process.

 

Taxes on selling a property

  • Legal Fees – 1 % of sales price.
  • Plus Valía – Municipal Tax on the increase of the value of the land. Tax amount varies depending on the amount of years you have owned the property and it’s location.
  • Capital Gains Tax.
    • Up to 6.000 - 21% of the profit.
    • 6.000 to 24.000 - 24% of the profit.
    • 24.000 upwards - 27% of the profit.
  • For non-residents 3% of the sales price is retained by the buyer’s lawyer at the signing of the title deed. The retained amount will be deposited in a tax account and will be deducted once you declare the sale. If you are over 65, no payment is required (The client must be a resident).
  • Percentage agreed to pay the real estate agency plus 21% VAT.