Real Estate Services
Buying
a property in Spain is for most, an enjoyable experience. However it
should not be undertaken without taking expert advice and
conveyancing from a company who are dedicated to providing a
competent service for this often complicated procedure.
The first thing that you need to do as a buyer of any
property in Spain is to have an expert in property conveyancing
study all documents belong to the specific property in question.
At
Continental Consulting we are able to provide a complete buying service starting with
inspection of the escritura or deeds of the property and the Nota
simple which is the property registry report. The escritura or deeds
contain the full description of the property, if the property has a
mortgage or loan against it will be noted and current owner’s
details and whom he purchased the property from and the year. The
previous declared price of the property is also registered ands is
important when it comes to assessing capital gains tax for the
seller and buying costs for the new purchaser.
The
I.B.I receipt is another document that needs to be checked. This
document is the Impuesto sobre Bienes Inmuebles, also known as the
municipal real estate tax. This piece of paper will contain the
properties catastral reference number and the properties current
valor catastral or official assessed value and is also and important
to base other taxes.
Upon
inspection of the deeds, the nota simple and the current years I.B.I
receipts the buying process moves on to the deposit contract. We
will draw up a legally binding contract or have one checked for our
clients. A typical deposit will be 10% of the purchase price and a
standard time frame in which to complete on the property would be
eight weeks however if there is not need to secure a loan or
mortgage then the process can be completed in as little as two
weeks.
The
main question that most clients want to know when they are about to
embark on a property purchase are of course the costs involved. The
buying costs are solely based on the price of the property in
question and are broken down in the following way:
Notary
fees… The place where you exchange the deeds of the property. Your
property deeds will be notarised by the Notary (a type of property
Judge).The notary fees for a property purchase in the region of
250,000 Euros will be in the region of 500-600 Euros.
Property Registry: This is the fee paid to register the new deeds in
the official Registro de la propiedad or land registry. The fee
involved will be on a par with the notary fee.
The
main tax on buying any property is the impuesto de transmisiones
patrimoniales or transfer tax. The tax is 7% of the price on the new
deeds. Meaning a tax of 17,500 Euros on a property sale of 250,000
Euros. If the property is being purchased with a loan or mortgage
then there will be another fee for notarising the mortgage and also
for the registration of the mortgage in the land registry almost
duplicating the original costs highlighted.
Upon
completion of the sale the normal procedure that should be
undertaken is the changing of utility bill names and bank details.
The bills for the water, electricity, gas and the Spanish municipal
taxes such as the I.B.I and the annual refuge taxes should be
changed into the new owner’s name. We offer this service as a
formality for our clients to ensure that there are no surprises
several months down the road.
When
buying off plan property from a developer or property agent
representing a builder then the process is similar to the above. The
transfer tax is replaced by I.V.A or value added tax also at 7%. In
addition to this there is stamp duty of 1% so the sale will incur a
tax of 8% exclusive of notary and registry costs. The process of
buying property off plan has come under severe scrutiny in the
latter part of 2006 and will continue to do so in 2007. Just as the
deeds are checked with re sale property, the licenses issued to the
builders and developers need to be studied along with the initial
building application and the building insurance. Finally it needs to
be established if the construction has a bank aval or guarantee to
safe guard clients in the event of insolvency on the part of the
builders.
At
Continental Consulting. we can oversee the selling of your property and accurately
assess your tax implication before completing the sale. The Capital
gains tax has been reduced across the board to 18% of the capital
gain declared when you purchased the property and when you sell it.
There are several factors enabling you to reduce this tax
depending on your status as resident or non resident. At Continental Consulting we
like to sit down with our clients and work with them to reduce the
tax by studying each individual case.
