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Buying a property in Spain
can appear to be very complicated, but in reality is very similar
to purchasing property in any other country. The main difficulty
is the language barrier, which can be easily overcome by utilising
the services of professional companies and multilingual solicitors.
Once you have found your ideal property your agent should be able
to provide you with all the information and details that your solicitor
will require in order to proceed with the sale. Properties in Spain
are liable for several payments and it is important that your agent
provides you with this information. Debts may be passed on to you
if they are not settled prior to the completion of sale. Some of
the most important liabilities are detailed as follows:
- Community fees
(Comunidad de Propietarios)
Many properties are situated within a Community of Homeowners.
The Community takes care of a number of services within a development
and the level of services will vary from place to place Some of
the factors that are commonly included are maintenance of the
community gardens, lighting, security, building insurance etc.
The community will hold annual meetings during which a budget
is approved by the owners covering the expenses for the year.
This budget is then divided between owners depending on the size
of their property. This division is mentioned in the title deeds
(cuota). The Community fees are normally paid half-yearly depending
on the Community. It is important to try to attend these meetings
and to vote on any matters that may affect the Community, or to
make any suggestions you may have.
- Your local Town Hall makes a charge to
each property owner equivalent, to Local Rates (Impuesto
sobre Bienes Inmeubles or I.B.I). The amount of this tax will
vary depending on the assessed value (Valor Catastral) and is
paid annually. In certain cases, discounts can be obtained for
early payment of these charges. Your receipt of payment will reflect
the amount you have paid, the year in which the receipt corresponds
and the assessed value that year.
- The Town Hall will also make a charge for
the Rubbish collection (Basura) from your property or development.
This can be charged annually or quarterly depending on the municipality
in which you are purchasing the property. In certain cases this
may be included in your Community fees.
- In certain municipalities there is an annual
charge for the Recycling Tax (Tratamiento de Residuos).
This covers the recycling of waste from the numerous glass, paper
and battery banks that are distributed throughout the area. Again
in some cases, this may be included within the Community fee.
- Most properties have meters for electricity
and water and you will be charged according to the amount of each
consumed. Some communities will only have one meter for the whole
development and therefore include the water in the Community fees.
These are the main expenses that a property will
incur. However other charges such as telephone, alarm company fees,
gardeners etc. should also be taken into account.
After you have completed the sale, it is recommended that you establish
standing orders with your bank for the payment of many of these
items. This avoids any possibility of non-payment and the related
problems of surcharges, reconnection fees etc.
Using the registration details (inscripcion) from the deeds (escritura)
your solicitor will arrange for a property search (Nota Simple)
from the Land Registry (Registro de la Propiedad). This search will
give the full history of the property, together with any mortgage
charges or debts and any incumbrances on the property. This document
would normally be applied for when you pay the deposit and again
prior to completion.
Title Deeds (Escritura)
When you reach the completion date stipulated in your purchase contract,
you will be required to pay the balance of the money and sign the
Title Deeds in front of the Public Notary. The Notary is an official
witness to the sale and will ensure that each party has sufficient
legal authority to buy or sell the property. He will also inform
you of the actual situation of the property in respect of any debts,
charges or encumbrances. This information is supplied to the Notary
directly from the Land Registry. The charge made by the Notary will
depend on the length of the Title Deed and the price declared.
Taxes
After you have signed the Title Deed you are required to pay taxes
on the transfer of the ownership. If the property is a resale and
privately owned you are required to pay a 6% tax. Should you be
purchasing a new property or a property owned by a Spanish company
you will pay 7% I.V.A. plus 0.5% duty.
Land Registry (Registro de la Propiedad)
Once your deeds have been collected from the Notary and the taxes
paid, they can be presented to the Land Registry for registration.
This process could take up to forty working days depending on the
workload of the Registry. Should you not have received your deeds
after three months you should contact your solicitors in case of
any problem.
Finally, your solicitor will provide you with a detailed summary
of the expenses and present you with all the original documentation.
All of these documents should be kept safely as they will be required
in the future should you wish to sell.
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