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G U I D E TO
B U Y I N G P R O P E R T Y I N S PA I N
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 2
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
I N D E X
T H E S T E P S T OB U Y I N G A P R O P E R T Y I N S P A I N
W H A T A R ET H E C O S T S I N V O L V E D ?
O N P U R C H A S E A F T E R P U R C H A S E
A D M I N I S T R A T I V E R E Q U I R E M E N T S
A D V I C E F R O M T H E E X P E R T S
1 . FO R M A L O F F E R A N D G O O D
FA I T H D E P O S I T
2 . T H E P R I VAT E A R R AS
CO N T R AC T
3 . CO M P L E T I O N O F
T H E P U B L I C D E E D O F
CO N V E YA N C E
1 . W H E N B U Y I N G A N E W
B U I L D P R O P E R T Y F R O M A
D E V E LO P E R
2 . W H E N B U Y I N G A R E SA L E
P R O P E R T Y F R O M A P R I VAT E
I N D I V I D UA L
3 . S O L I C I TO R ’ S F E E S
4 . N OTA RY P U B L I C ’ S F E E S
A N D L A N D R E G I ST RY F E E S
1 . LO C A L TA X E S
2 . CO M M U N I T Y F E E S
3 . N O N - R E S I D E N T
I N CO M E TA X
4 . W E A LT H TA X FO R
N O N - R E S I D E N TSPa g e 3
Pa g e 8
Pa g e 9
Pa g e 5 Pa g e 6
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 3
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
The first step when you find a property that you want to
buy is formulating an offer in writing and putting down a
good faith deposit. This deposit is held by the real estate
agency and the amount varies depending on the property
price as well as other factors. Your Sales Agent can
advise you of the exact amount, based on the property
of interest. If your formal offer is accepted and signed by
the Seller then it becomes a reserve agreement and the
property is taken off the market. The reserve agreement
will provide conditions and timelines for the next contract.
We always advise our clients to use a solicitor for the
purchase and can recommend suitable lawyers who speak
your language.
FO R M A L O F F E R
A N D G O O D FA I T H D E P O S I T
1
T H E S T E P S T OB U Y I N G A P R O P E R T Y I N S P A I N
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 4
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
Within the Private Arras Contract there is usually a clause
stating that should the Seller decide to withdraw from
the sale the Buyer is entitled to receive double the
downpayment as compensation and should the Buyer
decide to withdraw from the sale the downpayment
amount is lost.
Prior to entering the contract, due diligence checks will
be carried out regarding legal and technical details for the
specific property.
This is a simple agreement between the Buyer and the
Seller in which the Seller agrees to sell the property and
the Buyer agrees to buy the property at the price agreed.
The Private Arras Contract (Contrato privado de arras) will
contain all the relevant details such as a description of the
property, the purchase price, the payment structure and
the completion date.
At this stage the Buyer will be expected to make a
downpayment, which is normally paid to the Seller’s bank
account and is usually 10% of the agreed purchase price,
but this amount can vary.
On the completion date the balance of the purchase price
(sales price minus any amounts paid to date) must be paid.
The Seller and Buyer then sign the Public Deed of
Conveyance (Escritura de compraventa), which is
equivalent to the title deeds of the property.
The Buyer is then issued with the Public Deed of
Conveyance in front of a Notary Public, who certifies
the property transfer, and a copy of the Public Deed of
Conveyance will be passed to the Spanish Tax Office and
on to the Property Registry.
The Notary Public in Spain is a public official who is
required to witness the deed of sale. However, an expert
and independent legal advisor should be used to protect
your own interests.
T H E P R I VAT E A R R AS CO N T R AC T
(CO N T R ATO P R I VA D O D E A R R AS )
CO M P L E T I O N O F T H E P U B L I C D E E D
OF CONVEYANCE (ESCRITURA DE COMPRAVENTA)
2 3
T H E S T E P S T OB U Y I N G A P R O P E R T Y I N S P A I N
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 5
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
1. WHEN BUYING A NEW BUILD PROPERTY FROM A DEVELOPER
VAT (IVA, Impuesto sobre Valor Añadido) and Stamp
Duty (AJD, Actos Jurídicos Documentados) apply.
VAT and Stamp Duty are applicable for residential
properties that have never previously been occupied
and building plots of land. VAT is a national tax that
does not vary depending on the property’s location
(with the exception of the Canary Islands). At present
VAT is 10% of the purchase price for new residential
properties (villas, apartments etc) and 21% for
building plots of land. Stamp Duty is a percentage
of the purchase price. This varies depending on the
autonomous region where you buy, between 0.5% and
1.5% (e.g. in Catalonia it is 1.5%).
2. WHEN BUYING A RESALE PROPERTY FROM A PRIVATE INDIVIDUAL
Transfer Tax (ITP, Impuesto sobre Transmisiones
Patrimoniales) applies. This tax applies if it is a resale
property that has been used before. The general ITP
rate varies from region to region, between 6% and 11%
(e.g. in Catalonia it is 10% for properties with a value of
up to €1 million and 11% thereafter).
3. SOLICITOR’S FEES
It is not obligatory by law to seek legal assistance for
a property purchase but it is strongly recommended
to do so. The fees can vary due to the amount of work
required by the solicitor.
4. NOTARY PUBLIC’S FEES AND LAND REGISTRY FEES
The fees vary depending on the purchase price and
complexity of the deed.
W H A T A R ET H E C O S T S I N V O L V E DO N P U R C H A S E ?
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 6
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
1. LOCAL TAXES (IBI, IMPUESTO SOBRE BIENES INMUEBLES)
Local taxes are calculated on the cadastral value (valor
catastral) of the land assigned by the Spanish Tax Office.
It is advisable to ascertain annual local rates for a property
before purchase as this differs depending on the region.
Your Sales Agent can advise you of the exact fees for a
specific property.
2. COMMUNITY FEES
Community fees are only applicable when purchasing
an apartment or a terraced house within a community
of neighbours, not when purchasing a detached house.
Community fees are paid monthly or quarterly and
depend on the expenses of the community of the property
(which may include expenses for a concierge service, lift
maintenance, cleaning, gardening etc). Your Sales Agent
can advise you of the exact fees for a specific property.
3. NON-RESIDENT INCOME TAX (IRNR, IMPUESTO SOBRE LA RENTA DE NO-RESIDENTES)
Non-resident income tax in Spain is paid if you are not a tax
resident in Spain and applies if you own a property in Spain.
3.1. THE PROPERTY IS EXCLUSIVELY FOR PERSONAL
USE AND YOU DO NOT RENT IT OUT
Although you do not earn an income from the property,
in the eyes of the Spanish tax authorities you still derive
a benefit from owning a property in Spain and therefore
have to pay an imputed annual income tax. The base for
the applicable tax rate is generally 2% of the cadastral
value of the property. The cadastral value of the property
is much lower than the commercial value. The tax rate is
19% for EU residents and 24% for non-EU residents.
3.2. YOU RENT OUT THE PROPERTY AND
THEREFORE PAY TAX FOR THE PERIODS DURING
WHICH IT IS RENTED
The base for the applicable tax rate is the income that
you receive from renting out the property. Various
costs can be deducted if you are a tax resident in the
European Union. For example, possible applicable
deductions include costs for property management and
the maintenance of the property. If you have no other
source of taxable income in Spain the tax rate is 19% for
EU residents and 24% for non-EU residents.
W H A T A R ET H E C O S T S I N V O L V E DA F T E R P U R C H A S E ?
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 7
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
4. WEALTH TAX FOR NON-RESIDENTS (PATRIMONIO)
Current legislation prescribes that whoever owns
property in Spain (residents and non-residents alike)
has to pay an annual wealth tax based on the net value
of their assets in Spain after permitted deductions,
such as mortgages. Residents must also include all
worldwide assets.
The base for the applicable tax is the net value of your
property and other assets in Spain (stocks, bank funds,
art collection etc) with a large tax-free allowance. This
allowance can vary between regions (e.g. in Catalonia
it is €500,000 for residents and €700,000 for non-
residents). The tax rate works on a sliding scale with
marginal rates starting at 0.2% and rising to 2.5%. If
two clients are purchasing the property the wealth tax
is divided by two (e.g. €800,000 property purchase by
a couple would count as €400,000 each and the tax is
therefore not applicable).
W H A T A R ET H E C O S T S I N V O L V E DA F T E R P U R C H A S E ?
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 8
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
A D M I N I S T R A T I V E R E Q U I R E M E N T S
PRIOR TO COMPLETION NON-SPANISH BUYERS WILL NEED A SPANISH NIE
(TAX IDENTIFICATION NUMBER) AND A BANK ACCOUNT IN SPAIN
You are required to obtain a Spanish NIE (Número de Identidad de Extranjero), a
tax identification number. The NIE can be obtained and organised through a Power
of Attorney if you do not have time to attend an appointment and collect all the
required documentation. It is best that you do this at the very beginning of your
property search to avoid unnecessary delays or missing out on specific properties
further along in the process.
A Spanish bank account is required to administer all payments. Bear in mind that
the Spanish bank will need you to provide documents that certify the origin of the
funds you will be using for the purchase, so try to make sure you find out as early as
possible about your bank’s exact requirements.
w w w . l u c a s f o x . c o m
L U C A S F O X G U I D E T O B U Y I N G P R O P E R T Y I N S P A I N 9
Please note the information provided is not to be intended as a substitute for professional legal advice. Laws and tax rates are subject to change so please consult a tax specialist or the tax authorities for the latest information.
A D V I C E F R O M T H E E X P E R T S
Karen Storms Rod Jamieson
Joanna Papis Shirley Rhodes
International Sales Manager Head of Sales & Operations
Head of New Developments Head of Rentals & Property Management
“If you want to finance your purchase, it is best to start looking at different banks, rates and
possibilities at an early stage. Your Sales Agent can recommend mortgage brokers who can
save you time and energy to find the best deal. Some of them only charge a fee once the
mortgage has been approved and the transaction closed.”
“Listen to your Sales Agent’s advice when deciding to make an offer on a property, as their
experience and in-depth knowledge of the property market will help you decide whether it
is advisable to negotiate or not.”
“Make sure you prepare everything in advance as there is nothing more frustrating than
losing a property because the NIE wasn’t obtained in time, a Spanish bank account
wasn’t opened in time, the funds still had to be transferred to the Spanish bank account or
your finances were not in order. In a multiple offer situation or for a property that has very
recently entered the market it is essential to be prepared in order to seal the deal.”
“It is a good idea to contract a legal advisor even prior to having selected the final
property of your choice. He / she can explain and prepare the necessary steps from a legal
standpoint and prepare all the administrative requirements for you. Often coordinating a
Power of Attorney so that your solicitor can act and sign on your behalf will make a difference
in being able to commit and will help you agree on conditions and secure a property.”
“Be aware that certain cultural customs may be very different to those in your own country.
It is very important to remember this throughout the entire purchase process to avoid
unpleasant surprises or misunderstandings. The way of handling the purchase is often
different, hence the importance of your Sales Agent who will be able to guide you throughout
and give you the best advice for each step and decision.”
“It is also advisable to use our Property Management Service. Whether you have a single
property or an expanding portfolio with complicated management requirements, this service
will give you peace of mind knowing that our knowledge and expertise can protect you and
your investment.”
W W W. LU C AS FOX .CO M
BARCELONA
COSTA BRAVA
GIRONA
IBIZA
MADRID
MALLORCA
MARBELLA - COSTA DEL SOL
MARESME
SEVILLE
SITGES
VALENCIA
ANDORRA
PORTUGAL
LUCAS FOX HEAD OFFICE
Pau Claris, 108, Principal · 08009 Barcelona, Spain · CIF: B64125438
T (+34) 933 562 989 · F (+34) 933 041 848 · E info@lucasfox.com
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