When buying a property (finca) in Andalucia, Spain, the legal process differs
to the UK. This is true whether the property is in an area classified as urban
(urbana) or rural (rustica). The main differences are as follows:
1. The Spanish conveyance system uses notaries.
2. Searches to the properties from the property registry office are undertaken
to show the status of the ownership of the building. They do not show the
status of land-registry data, which includes meterage, borders and any
environmental, town council or third-party applications that could affect the
property you want to buy. 3. The responsibility for conveyance-related matters that are not covered by
property registry searches are the liability of the purchaser.
4. The tax (ITP) when buying property is currently 7% of the property's
purchase value. This should be paid within 30 working days of the property being purchased by public title deed, "escritura publica". A model 600 needs to be filed by the purchaser or their
legal representative.
5. A private contract is prepared between the two parties (purchaser and
vendor), and a 10% deposit is paid by the purchaser to the vendor on
exchange of this contract. All terms and conditions, definitions and legal
status of the property being purchased are laid out within the body of this
private contract. All searches should be undertaken prior to the exchange of
the private contract. The completion terms and conditions are laid out
within the body of the private contract .
Private contracts must be in Spanish, and we always advise that private
contracts are accompanied by court-sworn official translations in the mother
tongue of the purchaser.
6. The purchaser, when not Spanish (and also where the vendor is not
Spanish), needs to obtain an NIE number (an NIE number is a non resident identification number) for fiscal purposes. The property
registrar (registrador/a) will require the NIE number and its accompanying
certificate to inscribe the property to the purchaser's name. The NIE
number is obtainable from the local police station.
7. National Spanish banks are obliged to provide a certificate to the notary
and registrar showing that the funds being used to acquire the property
have been sent from outside of Spain and her territories for tax purposes.
8. Capital gains for non nationals who purchase in their own name is currently
assessed at 35%. In some cases it is worth forming a Spanish limited
company. This depends on several factors: some include activity of the
property, cost of build or restoration, length of period for which the asset is
to be held.
9. Under Spanish law, non-nationals need to appoint a Spanish or a non-
national who is a fiscal resident of Spain to act as a power of attorney,
which grants and defines varying powers to your representative to act on
your behalf.
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10. Funds for the purchase of Spanish property will need to
enter into Spain through your own Spanish bank account to show that funds have
arrived into the country from abroad and from a non-national resident account
This is important for the purchaser's fiscal position. Purchasers can also send
funds to their sales representative or solicitors. If you choose to do the latter,
we strongly advise that your representative and/or solicitor has an ESCROW account
that is registered with the Bank of Spain.
11. We recommend that all properties should be measured by an independent surveyor
(in the case of urban property) and a topographer (in the case of rural property)
prior to the exchange of private contracts. IBI (rating documents) should be
attached to all private contracts and final title deeds. Prior to exchange searches should be undertaken in the land registry office, the town council and where appropriate( and in the case of rural property purchase) at provincial level where all planning matters are referred to prior to being given approval.
12. Completion: this takes the form of an Escritura publica (a public deed of
sale) and is performed by the notary. On the day of sale, the notary office will
undertake a search from the property registry office to see if there are any
registered debts, holds or known encumbrances upon the property. Costs for the
sale are in line with Spanish conveyance law. It is usual for purchasers and
vendors to reach agreement at the time the private contracts are exchanged, and
this is in turn stipulated in the contract's terms and conditions. |
