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So, I have a property in mind with a Briish owner. What steps should i take to be able to buy it safely?
Legalities, fees etc as I have never bought any property before even in UK, let alone Spain
thanks
This message was last edited by deesam56 on 17/06/2013.
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Denise
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The first step is to check the nota simple - you can get this from the land registry. It will give you details of who owns the property, whether there are any charges against it etc. You will need a lawyer - maybe Maria Castro, Costaluz lawyers, can help.
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So, I have a property in mind with a Briish owner. What steps should i take to be able to buy it safely?
Legalities, fees etc as I have never bought any property before even in UK, let alone Spain
thanks
Get a good lawyer/solicitor in Spain..a Spanish one...not any foreign one.. make sure they have multilingual speakers....check how long they have been in business and how long in the same office...check if they have other offices in other parts of Spain...dont use one recommended by the seller, get your own...dont give the seller your deposit, give it to your solicitor with explicit instructions NOT to hand it over unless 100% all is well...dont give over the 10% deposit of the price they ask for...make sure, and make a note before you buy, whats going to be left in the house when you buy it...ask as many awkward questions as you can possible think of to the seller...ask about ALL the house costs.
It's not hard, it is a whole lot better then the UK when it comes to buying in Spain but you should still have your wits about you.
Smell a rat...move on.
Don't buy in haste and repent in leisure.
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thanks for advice
it is scary to think that it could all go wrong if not careful
:)
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Denise
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Baz1946-what makes you think buying a house in Spain is easier than UK? what about transfer tax, possible complementary tax, risk of unscrupulous builders, horrendous experiences ,to name but a few?
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http://www.eyeonspain.com/blogs/costaluz/4809/legal-tip-428-property-re-sales-the-importance-of-the-private-contract.aspx
Legal tip 428. Property Re-sales: the importance of the private contract
17 January 2011 @ 08:36
An old article relaunched today. Have a great week!
These are some important aspects of the private sales contract:
1) If you don’t master Spanish sufficiently, ask the owner to providetranslation of the contract or look for a translator yourself and pay these services 50-50.
2) Date and place of contract.
3) Check who is signing on behalf of the selling party: (The most practical and useful thing is to ask the Land Registry for an updated “Nota Simple” of the property to check the current owners and any speciality involved in the ownership. There is an English version of this service at: www.registradores.org).
- If the transaction is between two individual parties, the document must be signed by all the owners, themselves or through sufficient proxies.
- If a house is part of the marital community, the document must be signed by both husband and wife; they both will have to sign too if even not being part of the marital community (being an exclusive good of one of them). So, important to have an specific mention about the civil status of buyer in the headings of the contract.
- If the seller gives power of attorney to another person to sign the private contract, the authorised person will have to present theauthorised notary copy, it means, the original document signed by the Notary, not just a photocopy, the power of attorney must grant enough power for the sale, so it is very important to check, by reading the power of attorney deed, that the authorised person can sign the sale (these mentions are among the faculties stated in the deed).
- If the seller are the heirs of the owner, it is important to make sure that they have got all the Inheritance documents in order and they are the only heirs who hold rights on the property.
4) If the hosue was rebuilt or renewed make sure this was done with the required Work License from the Town Hall and that the “ Declaracion de Obra Nueva” has been made before a Notary and duly registered in the Land Registry. Again, ask for a Nota Simple to do so. Catastro´s descriptive and graphic note is also needed here to see how the Land Registry description of the house is equivalent to Catastro´s and to reality.
5) If you are buying a country house, check on water, phone and electricity providers. If a well is part of the contract, be sure that it has been legalised. If there is a river passing by, be sure that you have irrigation rights properly registered in the proper Confederacion hidrografica.
6) Charges on the house: It is very important to verify which charges exist on the house, and check out if it is free of charges, loans and encumbrances. In order to check that out, again, the most useful instrument is a Nota Simple. The mortgage can be fully paid before the transaction and be cancelled by the owner or the buyer will have to subrogate that mortgage, which means that he will have to accept it and become the debtor of the remaining debt against the Bank which has granted the mortgage. It is necessary then to know on interests’ rates, recovery time, and commissions and of course the amount still owed. It will be convenient to ask in the bank about remaining amounts to be paid back as the Nota simple doesn’t reflect all these details.
7) Community of owners´ shares. If it is a resale house, you need to have information on the situation of the house regarding payments to the Community of Owners. Ask it to the Property Manager/ Administrator or the President of the Community, get copies of the Statutes and internal rules of the building too.
8) Price, deposit and payment method: The contract will specify the price of the house and the payment method. There is no VAT to be paid on resales. You will have to pay the Transfer Tax which is of 7% of the property price.
9) There are certain kinds of houses which have official value, the Treasurey Department of the Autonomous Community has this information, check the Nota Simple to see that your house is not VPO.
10) Public deed signing date: Very important to have a determined and clear date for signing the Public deed before a Notary, and if extensions are agreed to clearly establish the terms of these extensions which need to be always communicated, justified and agreed between the parties.
11) Related expenses: Need to be mentioned and how-who will pay them:
- Plusvalía (a tax over the value rise of the property from one to the next transmisión)
- Notary Deed.
- Registration in Land Registry.
- Transfer taxes
If nothing is specifically mentioned or if it is agreed that expenses will be paid “according to Law” , the seller will pay Plusvalía, and most of the Notary Deed and the buyer will pay the copies of the Notary deeds, the registration of the Property in the Land Registry and the transfer tax.
12) Choosing a Notary: The buyer has a right to free election of Notary.
13) The private contrat is sufficient to link the two parties to what is agreed in the contract clauses but it is not sufficient in order to register the property in the Land Registry or to ask for a mortgage. You need a Notary public deed for these two.
14) Cancellation clauses and penalties for delay (equilibrium) http://www.costaluzlawyers.es/eng/?p=25. The contract needs to mention equivalent penalty clauses for delays (to both parties) which need to be agreed by the contracting parties and not imposed by any of them. It also needs to put the parties in balanced conditions in the event of cancellation of the contract and establish equivalent compensation for these cases of cancellation.
15) Agreement on juristiction or submission to arbitration.
Written by: Maria de Castro
About the author:
Maria de Castro is a Spanish Lawyer and the Director of the Law Firm
www.costaluzlawyers.es.
Costa Luz Lawyers are contract and consumer real estate law specialists covering all parts of Spain. You can contact Maria atmldecastro@costaluzlawyers.es
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Grazalema by Rocio Santiago piedra at facebook
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Baz1946-what makes you think buying a house in Spain is easier than UK? what about transfer tax, possible complementary tax, risk of unscrupulous builders, horrendous experiences ,to name but a few?
Well what with the experience i have had in the UK and what friends and colleges are going through right now i have never had with any of the houses i have bought and sold in Spain, Transfer tax is just that a tax, we have to pay stamp duty on a house sale here, cant remember the exact figures but when my sister-in-law sold their barn for £550.000 the buyer had to pay on top around £23.000, these figures as i say are not the correct remembered one's.
The solicitor fee's i have paid are no-where near the UK one's and you dont pay estate agents in Spain as you do in the UK. Buying a house anywhere has lots of big costs attached to them, but it cant be all bad otherwise no-one would own a house
I have never paid complementary tax perhaps that's a new one, dont even know what that is.
Risk of unscrupulous builders, i presume you mean as in off-plan and the builder doing a runner with deposits etc etc, and to my mind if you put down money on something you cant see or touch then more the fool you.
I didn't mention this because i think the original poster is buying an already built house, but then again my new house i bought here in the UK the builder didn't own the land he built the house on because he had bankrupted the company but still went ahead and built 5 houses down our lane, the trouble i had getting into the house was unreal, i did, and i employed one of the biggest and best..(so i thought)..solicitors in our local town and he told all this to me exactly 15 minutes before we moved out...lies...lies and lies, and he had done all my business and property sales before. And to be honest in the UK if you cant trust a solicitor to make a house purchase what the hell can you trust them with?
Not once have i had this or anything like this from my Spanish solicitors.
Horrendous experience i cant say because i have never had any in Spain and that's the truth, but then i have done my homework... yes i know so i thought... but apart from the English git which i am very grateful to because he learnt me one hell of a valuable lesson. I do trust my Spanish solicitor....dont use the UK one now.
I know a chap now buying in Spain and he asked my advice, halfway through the conversation it came out that he was having big trouble with the solicitor over the house buy and who was a German solicitor who "Spoke very good Spanish" he didn't care much for the advice when i told him to get a Spanish one because at least they have grown up knowing some of the rules, so what does a German one in Spain know?.
This message was last edited by baz1946 on 17/06/2013.
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So, it would be interesting to know if you have the same opinion about selling inSpain?
That surely must be easier in UK, no cgt on main residence, lower estate agents charges, no plus valia.
complementary tax,(surprised you don't know what it is)
By the way, I looked it up-on a £500,000 house, stamp duty would be £15,000
This message was last edited by camposol on 17/06/2013.
This message was last edited by camposol on 17/06/2013.
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thank you Maria
and everybody else who replied
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Denise
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So, it would be interesting to know if you have the same opinion about selling inSpain?
That surely must be easier in UK, no cgt on main residence, lower estate agents charges, no plus valia.
complementary tax,(surprised you don't know what it is)
By the way, I looked it up-on a £500,000 house, stamp duty would be £15,000.
What opinion on selling in Spain? i have sold a few and never any problems, paid all taxes due, and made some profit as well.
Estate agent fee's in England are about £2/3000 on a basic £200,000 house, plus a high solicitor fee of probably about £1,500 to maybe £2,000, Spain i have never paid more then about 700 ish €'s solicitor fee's, some case's it was a lot less, and as you know in Spain the agent puts the selling fee on top of the house for sale price so you dont pay any agent fee's.
Try not to be surprised that i dont know what a complementary tax is because i dont, if i have paid it then so be it, and it would have been included on my invoice from my solicitors anyway, so perhaps it was so small, if i paid it at all i overlooked it, but explain it please so i can look for it next time.
By the way i asked my sister-in-law what the amount of stamp duty that was paid on the barn she sold...£22,000...on top of the selling price, or 4% of the full house selling price, that's straight from the horses mouth....now...
Had you read my post correctly you would have seen the price her barn was sold for, then you could have looked up the correct stamp duty to be paid rather then your..."By the way" comment
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Complementary tax is paid on the difference in the transfer tax on what you bought it for and what the tax office says its worth.
That bargain may not be much of one after all.Originated from days when purchases price was deliberately underdeclared in order to minimise transfer tax and cgt.The taxman is getting his own back.People sometimes get bills years later.
As I say, in all your dealings, I'm surprised you didn't know.
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in all my years as an agent here,i have never had a buyer pay "complimentary tax"???
As long as evrything is accounted for at Notary (all monies) then nobody should have any problems.
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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You would not hear about this at the notary. If you were unlucky,You would get a letter afterwards, sometimes years. As I said it's because the tax man thinks you are underdeclaring, as used to be the practice.It seems to be happening more and more as houuses are sold at rock bottom prices.Some person who is buying the house at a very cheap price, not underdeclaring, may end up with a tax bill, which they only have a certain time in which to challenge(more money for solicitors)
Really surprised you have not come across this!
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Complementary tax is paid on the difference in the transfer tax on what you bought it for and what the tax office says its worth.
That bargain may not be much of one after all.Originated from days when purchases price was deliberately underdeclared in order to minimise transfer tax and cgt.The taxman is getting his own back.People sometimes get bills years later.
As I say, in all your dealings, I'm surprised you didn't know.
No i didn't know that's what you called it, that name has never been mentioned to me at all, not like that anyway, and i have never had any shocks years later from the tax man either, perhaps having what i would call a decent solicitor / accountant in Spain you dont get these nasty shocks years down the line, like in if you pay peanuts you get monkeys.
In all my dealings, please do tell of what you know of my dealings. After all you got the stamp duty bit wrong so maybe this is wrong as well.
I have always said to my solicitor "Don't give me bits and pieces, just the end product, isn't that the best way to work?, i trust and pay them to do the job correctly so i dont have any problems,
I honestly dont know what your fishing for, maybe you have had a nasty shock with your house, or cant sell it. if you are on Camposol then i know why...what ever, but for the record yes i think Spain is a very good bet to buy the right property, in the right place, at the right price still, and to sell.
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Nice to know my question has escalated into fierce debate 
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Denise
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so can someone explain this complimentary tax.
is it the seller or the buyer who has to pay it.
i am confused !!!!!!!!!!!!!!!!!!!!!!!!!!
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What used to happen was that you put a wodge of cash down and then declared the property as being bought at a lower value. We were told "this is the way it happens in Spain" and, apparently, it was. The taxman, in recent years, have decided to put a stop to this and, if you buy a property for a lot less than the land registry have it valued at, will try and hit you for tax on the difference, what was called black money.
Now, with property values decreasing by a lot, the taxman tries to get his bit and, for example, if you buy a property at 50k which has a value at the land registry of 100K, they will give the buyer a tax bill for the VAT of the 50k differenc. Now, there are several people that I know that have had a tax demand up to 4 years after buying the property. They have all appealed and proved that the money they handed over was the actual price paid and the tax demand has been dropped. They did, however, keep all bank statements etc to prove the deposit and the subsequent payments were those paid and had no suspicious payments going out of their accounts.
I should imagine that many others have actually had to pay the tax. Now, before the "usual suspects" come up with this being another way to get money out of expats, this also works for Spanish buyers as well. An article in one of the Spanish papers stated that several million euros had been reclaimed from these tax demands in areas that are not popular with expats. It was "the Spanish way" which is now, hopefully, dying out.
So, it is the buyer who gets the demand for this tax. All above board and appeal. Do it the old way and take the consequences.
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I think what a certain person on here wants is for everyone to agree with them and hate Spain, and accuse Spain of ripping everyone of, certain people think that they should still be getting 1.55€ to the pound, and gas bottles at 4€'s, and because that wont happen for some time yet, then Spain's turned into one big rip of now.
I think someone on here should also take note that most posts on here are merely honest helpful opinions from decent people, and should be treated as such.
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to bobaol.
thanks for your reply.
now I understand this complimentary tax now.
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baz1946
I did not get the stampduty bit wrong-I looked up the amount payable online.
bobaol-sure, if you do it the old way, you take the consequences, but many who buy a very cheap property are getting the fallout, without having done anything wrong, and have to spend money proving it.I've seen articles by solicitors advising clients to be prepared for the extra tax and save for it! Why should they just roll over and accept it?
Formentera- from my previous post it's obvious it concerns the buyer;however the seller would pay less cgt so perhaps he should get a bill as well.
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