BUYING AND SELLING IN SPAIN
1. RESERVATION OF PROPERTY
A deposit of €6 000 to €10 000 is normal to remove the property from the market.
Payment is made to the Estate Agent until further instructions from your lawyer.
2. PROPERTY CHECK
Lawyer will check Land Registry to approve documents.
He will check that there are no debts or embargos against property
He will confirm the owner is the legal vendor.
3. PRIVATE CONTRACT
Once all details are confirmed correct the buyer pays 10% deposit less original deposit.
Requires buyers and sellers details and ID numbers plus an agreed date of transfer.
Unless otherwise agreed:
If buyer withdraws from the purchase they forfeit the deposit.
If the seller withdraws they repay double the deposit to the buyer.
4. NOTARY – LAST STEP
Balance of sale price paid to the seller/vendor and keys handed over to the buyer.
Title Deed/Escritura signed in the presence of the Notary.
Finally your lawyer will register the property in the local land registry.
5. PURCHASE COST
5.1. Direct from Developer
5.2. RESALE PROPERTY
Transfer Tax (ITP)
e.g. Purchase Price Tax Due
0 to 400 000€ 8%
400 000 to 700 000€ 9%
above 700 000€ 10%
Notary Fees and Land Registry fees together:
Depend on the selling price e.g. for a property of 200 000€ up to 1 500€ and for a property of 400 000€ up to 2 000€.
Lawyer fees: normally 1%.
OTHER DOCUMENTS REQUIRED
Spanish Nationals: ID only
Non Residents: NIE number via local police station in Spain or Spanish consulates and embassies.
(allow working hours/ time to complete this at the local Spanish police station).
SELLING PROPERTY IN SPAIN Engage a lawyer to protect your interests and ensure a smooth transaction.
1. TAX LIABILITY FOR SELLER
Capital Gains Tax (CGT):
As is normal, profit between the date of purchase and date of sale is taxed at 21%
NOTE. You can deduct the following from CGT:
conveyancing costs (with receipts)
– Purchase Tax
– Notary Fees
– Legal Fees
2. PLUS VALIA TAX
That can be from a couple of hundred to a couple of thousand Euros depending on the period of ownership and the size of the plot.
3. SELLERS DEBTS AGAINST PROPERTY/ENCUMBRANCES
The seller must settle debts against his property including mortgage before completion.
If buyer/seller negotiate to take over mortgage it will be cheaper than setting up a new mortgage.
If vendor is not a resident 3% retention of purchase price is held to pay to Spanish Tax Authorities.
This ensures that vendor pays CGT.
After CGT is calculated seller will either receive refund or be billed for difference depending on tax due.