I am fiscal tax Resident in Spain and I have sold my habitual residence here; with the monies from this sale I intend to acquire another property but outside of Spain. I understand that if I was to reinvest the monies on a property in Spain I would not have to pay Capital Gain Tax […]
CONVEYANCING: buying, selling, letting, planning permission, etc.
Real estate law in Spain. Buying and Selling a real estate property. Transmissions. Building licences. Large investors.
Purchase, sale, gift a property, drafting and negotiate a good letting contract, update the Land Registry and the Catastro description of a property, apply for the needed building permits, are all important actions that need to be carefully studied in order to guarantee the needs and interests of the client. In our Real estate law in Spain department, we can advise you on these sections.
Purchase of real estate in Spain
When you want to buy a property in Spain, you must be properly advised. It is essential to know the applicable regulations, before deciding to buy a property.
Among the services that we provide as lawyers in White Baos, is the realisation of a legal due diligence on properties.
After which, you will be able to know the legal situation of the property. From the situation in the Land registry, cadastre, planning, etc.
Likewise, legal advice is essential when negotiating the clauses of a sales contract.
Likewise, taking into account the circumstances of the case, it may be interesting to acquire the property personally, or through a company, etc.
There will also be times when the purchase could be subject to different taxes. Thus, we may be more interested in paying VAT or Patrimonial Transmissions, etc.
Due to the importance that the purchase of a property always has, legal advice is essential, to avoid unnecessary risks.
Sale of real estate in Spain
Likewise, when we are going to sell a property in Spain, it is advisable to have expert legal advice.
Thus, when our clients are sellers, their interests are different than when they are buyers. So the negotiation and drafting of the sales contracts, and the mediation contract with the real estate agency, are essential.
Our office can also do a prior due diligence of your property to know its legal situation. And so, put it up for sale in a proper way.
Property transfer in Spain
There are many occasions in which our clients ask us for help to transfer a property.
Sometimes, they want you to transfer the property to a family member, or a friend. In these cases, it is essential to study the circumstances of the specific case. And thus, to be able to determine the most effective way from the legal and tax point of view, to transfer it.
It can be through a donation, a sale, an inheritance, etc.
Our law firm can inform you, about the options and expenses. So you can decide, which is the right way in your case.
In Spain, the regulations that regulate lettings are constantly changed. Knowing the applicable law and its interpretation is essential when negotiating and drafting a letting contract. In order to have our rights protected.
Many clients are unaware that, for example, according to Spanish law, the tenant may have the right to extend the contract up to a minimum duration. All this, even if a different duration has been agreed in the contract. This occurs on letting for properties to be used as a main home.
Our law firm can advise you on your letting contract. Whether you are a landlord or a tenant.
Legal advice for large investors
When it comes to large investors, legal advice is different.
In these cases, a pre legal due diligence of the investment must be carried out.
The constitution and administration of the real estate company.
Optimisation and tax advice on the operation.
Project management, etc.
Our service of real estate law in Spain
As specialist lawyers we can advise you in relation to all these matters, also and especially at the judicial level, in the event of a legal dispute.
If you want expert legal advice on this matter, do not hesitate to contact us.
You may be interested in the following services:
In Spain, the taxes paid by the buyer of a property depend on the region and the type of property bought/type of transaction. If it is a second-hand property, buyers must pay the Transfer Tax. In the Region of Valencia, it represents 10 per cent of the purchase price. On the other hand, if it is a new property, bought by a developer, buyers will have to pay Stamp Duty Tax (1.5%) and VAT (10%). When purchasing plots, the VAT will be at 21 per cent.
Yes, to buy a property in Spain you will need to have an NIE. In addition, please note that the NIE must be registered with the competent tax authority.
Although it is not necessary (at least in the initial stages: signing of the reservation contract) it is highly advisable to have a bank account in Spain to speed up the process and avoid delays and complications. It will also be extremely useful to direct debit water and electricity bills, etc, and also for the final payments of the purchase, which are normally made by banker’s draft.
At the end of the purchase procedure, you will have to come to Spain to sign the public deed of sale before a notary. If this is not possible, please note that you could also grant a Power of Attorney in favour of another person, so that he or she can represent you.
On the one hand, you will need to check the Land Registry to confirm that the vendors are the registral owners of the property, that its description matches the physical reality and that there are no encumbrances, mortgages, etc. On the other hand, it is also advisable to verify the size and dimensions indicated in Cadastre. Making sure that the property has all the necessary licences, complies with municipal planning, there are no open procedures in the town hall for the re-establishment of the urban planning legality, etc is also crucial.
It will depend on each transaction and its specific circumstances. In any case, it is always advisable to allow several months to elapse between the signing of the initial reservation or purchase contract, and the public deed at the Notary’s office. This will allow you to carry out all the necessary checks, receive the pertinent certificates from the town hall confirming whether there are any infringement proceedings open in the municipality, etc.
No. However, although not compulsory, it is highly advisable. An experienced solicitor in Real Estate Law will be able to counsel you on the risks involved in the purchase, the checks to be carried out, preparation and negotiation of the contract, etc.
No. It is essential to get proper legal advice before paying any amount or signing any type of document (even if it’s the reservation). Otherwise, you could be forced to buy a property under non desirable conditions. Through expert legal advice, you will be able to make the purchase conditional on key issues such as the property not having any type of infringement procedure open, the description of the property coinciding with the physical reality, etc.
Not exactly. According to art. 1.455 of the CC, the cost of granting the deed is paid by the vendor. Whereas the cost of the first and other copies, must be paid by the buyer. However, in practice, it is common to apply the customs of the area. For instance, in the Marina Alta, the buyer usually pays the Notary fees. In any case, the parties are free to make whatever arrangements they wish.
Usually, the person liable to pay the Municipal Capital Gains Tax is the vendor. However, when the vendor is Non-resident, substitute taxpayer for the taxpayer (Art. 106.2 TRLHL). In other words, the obligation to pay the Plusvalia corresponds to the buyer. For this reason, the buyer usually withholds the amount of the Plusvalia from the sale price in order to pay it directly.
Yes. On the one hand, residents in Spain will declare the gain in their Income Tax Return for the following year. However, Non-Residents must present their declaration within four months after signing of the deed of sale. Another difference is the tax rate applicable to each one. Residents pay between 19 per cent and 28 per cent. Non-residents are taxed at a flat rate of 19 per cent.
In addition to the above, when the seller is a Non-Resident, the buyer is obliged by Law to withhold 3 per cent of the price and pay it to the Tax Office.
It is common for buyer and seller to agree that these taxes are paid proportionally, according to the number of days that each one has been owner. Although it depends on each town hall, the IBI is usually paid at the end of the year (September-October) and the rubbish collection at the beginning of the year.
It is usual for the Cadastre records and the Land Registry not to coincide, as they are different registers. The Cadastre is a purely administrative register, that indicates the location of the property, metres, etc. And it is used to calculate taxes such as IBI. The Land Registry, on the other hand, is a register of rights. It indicates who is the owner, if there is any charge, mortgage, etc. When selling or buying a property it is very important to check both, to know the exact legal situation of the property.
The regulation of the cédula de habitability or occupation licence was modified by Decree 12/2021 of 22 January, which introduced the so-called ‘responsible declaration’. This is a very important document in sales and purchases; and can be a source of disagreement between buyers and sellers. You can find more information on our website.
From the moment buyers or vendors sign a document, both assume legal obligations that they may not be aware of. At White-Baos Abogados we always recommend that no document (offer, reservation, deposit) should be signed without first being reviewed by a lawyer.
It is advisable to indicate in the sales authorisation or mandate that the Agency will only receive its fees in the event that the sale is 100 per cent completed at the Notary’s office. Likewise, it is always recommended that the agency does not directly receive the deposit paid by the buyer, and that the seller himself signs the contracts with the buyers directly, by him or herself.
According to Art. 1455 of the CC, the costs for the execution of the deeds will be borne by the seller, and the costs for the first copy and the others after the sale will be borne by the buyer. However, depending on the area, other customs may apply. For example, in the Marina Alta, it is usual that the Notary fees are paid by the buyer. The costs of registering the change of ownership in the Land Registry are paid by the buyer.
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