Dear lawyer / solicitor,
I’m British and I am interested in buying a property on the Costa Blanca, in the area of Denia, Javea or Moraira. I have made some offers for several villas. The owners of one of them, who are a British couple, want to return to the UK. The agent told us that we must pay the price in Euros and we cannot pay in Pounds Sterling, despite being the buyer and seller in agreement, because the property is in Spain. Is this correct? Thanks for your reply.
Dear reader, thank you very much for your consultation.
We regret to say that we cannot agree with the information given to you by the agent.
We understand, and it has been done like this on many occasions, that is perfectly possible to buy a Spanish property in another foreign currency other than Euros.
It is not only possible, sometimes it can be very beneficial to all the parties. For example, if you as a buyer have your money in Pounds Sterling in the UK, and the seller wants to sell his property in Spain to return to the UK, it is clear that for both of you pay in English Pounds could be the most appropriate, in order to avoid possible fluctuations and variations in the currency exchange rates between the euro – Pounds, and uncertainties that could affect the value of the currencies, as the Brexit, etc.
It is true that although the entire operation is carried out in a foreign currency, in your case in Sterling, it should set the equivalent in Euros on the purchase title deed to be signed before the notary, because according to the price fixed in Euros on the deed, the transfer taxes payable shall be calculated, etc., Although it could be said that the payments has been made in Pounds.
It is also important to agree the exchange rate between Euros and Pounds, as some retention of part of the price could need to be done, for the payment of debts, or just the 3% retention as payment on account of the capital gain tax of the seller, when vendor is non tax resident in Spain …
Therefore, and as indicated, we advise where appropriate and if it is suitable for all parties and finally is agreed, that the price of the transaction is agreed in Pounds Sterling with the equivalent in Euros at the private purchase contract and from the first moment, it should be agree how the payments will be made, in which currency and if by means of bank transfer, bankers draft, etc.
If you want to buy or sell a property in Spain, contact us and we’ll help.
The information provided in this article is not intended to be legal advice, but merely conveys information related to legal issues.
Carlos Baos (Lawyer)
Spanish Law firm solicitor attorney barrister.
Alicante, Denia, Costa Blanca Marina Alta
White & Baos 2016 – All rights reserved