REAL ESTATE TRANSACTIONS (CONVEYANCING)

Conveyancing in Spain


In case that you were thinking to buy or sale a property in Spain, CREGO ABOGADOS can provide a complete advice on all legal and tax matters.

Our main objective is to provide you with the best legal and tax advice to protect your interests mitigate risks and make the process as simple as possible.

CREGO ABOGADOS has years of experience in respect of conveyancing of holiday flats, luxury villas, plots of land, residential developments, commercial premises, agricultural estates and off-plan properties across Murcia Region and Alicante.

NIE number


The “Número de Identidad de Extranjero” or NIE Number is a tax identification number in Spain.

The NIE number is required in Spain to the majority of transactions, like purchase or sale of real estate, company shares, vehicles, boats or in order to work or study.

The number itself is made up of an initial letter followed by seven digits followed by a verification letter. The initial letter is an X before July 2008 and a Y afterwards.

The NIE Number is issued on a standard A4 page, and contents the full name, place of birth, nationality, and the number itself, along with a stamp and signature provided by the National Police.

CREGO ABOGADOS, can help you with your application of the NIE number, we will accompany you or we will go on your behalf, in virtue of a power of attorney, to the Foreign Office in Murcia in order to present the application form (EX-15), a copy of your passport, and the documents supporting the ground for the request.

Real Estate Purchase in Spain


The most important thing that you have to consider is that the process of buying a home in Spain is different from buying a home in your country. Not more dangerous, just different.

There is a different language, a different legal system and a different culture, for this reason, a bit of planning will make the whole thing a lot easier and a lot safer.

CREGO ABOGADOS will assist you in all the stages of the process.

Investigations before signing the contract

Buying a property in Spain free of debts, mortgages and other encumbrances requires thorough investigation before signing any document. The most important of these are:

The community of owners

Water supply

Electricity supply

Rubbish collect charges

Real Estate Tax

Land Registry

Planning situation of the property

Planning Permission/Construction Licence

Bank Guarantees

  • The Community of Owners

The Community of Owners (Comunidad de Propietarios) is a legal entity composed of the total owners of the same building or urbanization, and that is governed by the applicable norms and by the statutes agreed by them.

Every owner must contribute to the community expenses for the maintenance of common facilities and services such as lifts, gardens, swimming pools, security etc, according to their participation coefficient, fixed in the deeds of horizontal division.

Normally, the community charges (Cuotas de comunidad) are paid monthly or quarterly.

It is very important before, buying to check that the seller is up-to-date with community payments. If you fail to do this you will find that the outstanding charges for the three previous years and the current year will, according to Spanish Law 49/1960, have to be paid by the new owner.

In CREGO ABOGADOS we ask the seller to provide receipts for this period and we check with the community of owners if any community charges are outstanding, in this case, we recommend to retain the amount on completion of the purchase.

 

  • Water Supply

It is also important to check if the seller is up-to-date with water payments. If is not the case you may find your water supply cut off and you will be obliged to pay the outstanding debts for the re-connection. In some cases the water is included in the community charges.

 

  • Electricity, Telephone and Gas Supply

Basically, the same applies to electricity, telephone and gas supply as to water.

 

  • Rubbish collect charges

It is important to check if the seller is up-to-date with rubbish collect charges because are subject to additional fines and surcharges.

 

  • Real Estate Tax

Real Estate Tax (Impuesto Municipal Sobre Bienes Inmuebles, I.B.I.) is an annual municipal tax which tax the ownership and real rights over any real estate. The tax base is cadastral value of the land and the construction. Although purchaser start paying from the date of the purchase, it is essential to check that the receipts for the previous four years have been paid by the seller. If not, you will be responsible for any outstanding sums.

 

  • Land Registry

The Land Regisrty is the state body that deals with the registration of the domain and other real rights over real estate.

The registration in the Land Registry of a domain or real right protects the interests of the owner and third parties. The complete history of any property can be found in the Land Registry and any title or right or charge which may exist against a certain property can be inspected.

We do not recommend to buy from someone who is not registered as the owner at the Land Registry because only the registered owner can prove that he is the legal owner of the property and only he can guarantee to transfer the property to you as the legal owner.

CREGO ABOGADOS will ask to the Land Registry for a certificate “Certificación Registral” or an extract “Nota Simple”, that shows all previous transactions and indicates who is the legal registered owner of a property and whether the property has any charges as hipotecas (mortgages), censos (ground rent or leasehold payments), usufructos (interests in the property), limitaciones (restrictions on use), multas (fines), cláusulas resolutorias (determinations, i.e. decisions about the future of the property), or embargos (court orders for distraint or seizure).

 

  • Catastral Certification (Certificación catastral) / Partial Plan (Plan parcial)

The Catastral Certification is very useful to know if the description of the property which is recorded in the Land Registry is exactly the same that the description recorded in the Town Hall.

Checking the Partial Plan we can ensure that the urbanization where the property is located is registered.

 

  • Town Planning (Plan General Municipal de Ordenación)

CREGO ABOGADOS checks with the Town planning departament (Departamento de Urbanismo) of the Town Hall about if any major developments are planned in the property area and if them could affect the property.

 

  • Planning Permission (Permiso de obra) / Building Permit (Licencia de Obra)

If you are buying a new or recent property you must make sure that the construction that has taken place has been authorised and that it was undertaken in accordance with the plans approved.
If you are buying a property in the course of construction the Seller must be made to produce proof of these permits.

 

  • Certificates of the termination of the building (Certificado de fin de obra)/Licence of first occupation (Licencia de primera ocupación)

It is very important to check these because if the building does not have it, you may run into problems to registering the property and also the council could sanction you with a fine or could order the demolition of the building.

 

  • Bank Guarantees

By Spanish law (Article 1, Ley 57/1968, de 27 de julio, Reguladora de las percepciones de cantidades anticipadas en la construcción y venta de viviendas) any property sold to you in the course of construction must be accompanied by a bank or insurance guarantee to protect you against the risk of the seller going bust or, for some other reason, not being able to complete the construction and delivery of the property.

We recommend to refuse to buy from people who do not give the guarantees required by law.

The contract
  • The Preliminary Contract

In some cases, the property can sell very quickly, perhaps because is especially attractive, or it has a very good priced.

As a result it is very often that you were asked to sign some form of document to confirm your interest.

There are various types of preliminary documents. These include:

Offers to Buy

Reservation Contracts

Our firm have a lot of experience checking this documents and the sign of one of this is one of the main steps when you buy a property, for this reason, please ask us for advice.

Offer to Buy

It is a formal written offer from the potential buyer to the potential seller. It will state that the potential buyer wish to buy the stated property for a stated price and that he will complete the transaction within a stated period. The offer will normally be accompanied by the payment of a deposit to the estate agent or seller.

Reservation Contract

It is a written document in which the seller offers to take a stated property off the market for a fixed period and to sell it at a stated price to a stated person at any time within a stated period.

The seller will usually require that the potential buyer pay him a deposit. Once he has received this deposit the seller must reserve the property for the buyer until the end of the period specified in the contract.

If the potential buyer does not go ahead he would lose him deposit. If the seller refuses to go ahead the buyer is entitled to claim compensation.

The contract could contain special “get out clauses” (condiciones resolutorias) stipulating the circumstances in which the buyer will be entitled to the refund of his deposit if he decides not to go ahead. The drafting of these clauses is of vital importance and CREGO ABOGADOS can give you a very good advice.

 

  • The Full Contract. “Contrato privado de compraventa”

This is not a preliminary contract. It is a full, binding commitment to buy the property. It is the most common type of document and it is called “Contrato privado de compraventa”.

It is an agreement that commits both parties. The seller must sell a stated property at a stated price to a stated person on the terms set out in the contract. The buyer must buy.

Remember that under Spanish law by signing and completing this contract you become, in some senses, the owner of the property, though you will need to sign a deed of sale (escritura) and register your ownership to be safe as far as third parties are concerned.

CREGO ABOGADOS has a lot of experience drawing and checking this kind of contracts fixing in each contract all of the terms necessary to protect your position.

The contract will contain the following clauses:

The seller and buyer should both be stated fully.

The property should be described fully, both in an everyday sense and by reference to its land registry details.

A date for the signing of the deed of sale (escritura) will be fixed or the contract will permit either party to require the signing of the escritura at any point by giving notice to the other.

A statement will be made as to when possession will take place – normally, on the date of signing the title.

The price is fixed.

A receipt for any deposit is given (“arras”).

The property should be sold with vacant possession.

The property should be sold free of any charges, debts or burdens and all bills should be paid up to date before signing the escritura.

It will provide for who is to pay the costs of the purchase.

It may confirm the details of any agent involved and who is to pay his commission.

It will set out what is to happen if one or both of the parties break the contract.

It will establish the law to cover the contract and the address of the parties for legal purposes.

It is very usual to include in the “Contrato privado de compraventa” an “arras” agreement that it is a special deposit payable by the buyer.

If the buyer fails to complete he will lose the deposit (normally a 10% of the purchase price). If the seller fails to complete he will have to return double the deposit paid.

If the parties fail to comply with their obligations there is the ultimate remedy of seeking a court order.

The Deed of Sale (Escritura)
  • What is the escritura?

In UK, when you buy a property, you exchange contracts, pay the vendor, get the keys and the property is yours, after which you are free to register your title in the land register, but in Spain it is not possible to register a contract in the land register, only it is possible to register a deed of sale (escritura).

The deed of sale is the title document proving who is the owner of the property and containing a detailed description of the property itself. It is, under Spanish law, necessary for the Escritura to be signed before a Spanish Notary Public.

 

  • Who is the Notary?

The Notary is a public official who put on the public record the fact that the title deed recording the sale/purchase has been signed in his presence and understood by the parties concerned.

 

  • What does the Notary do?

The function of the Notary is not to advise or to protect either your interests or the interests of the person selling the house.

When the Escritura is signed in front of the Notary the purchase price must be, in his presence, handed over to the person selling the property or the seller must confirms that the money has already been handed over. Proof of such payment must be then incorporated into the title deeds of the property.

 

  • Do I have to be in Spain to complete the transaction?

The buyer and the seller of the property may attend in person in front of the Notary, but, if this is inconvenient, CREGO ABOGADOS can attend on their behalf if one of both provide us with a Power of Attorney. A Power can be drafted for signature near your home.

 

  • Where must the price of the property be paid?

The price of the property is usually paid by the buyer to the seller in front of the notary. This is the best and safest way. You can, in fact, agree to pay in whatever way and wherever you please.

In the case of a seller who is not tax resident in Spain the buyer is obliged to retain 3% of the price and pay it to the Spanish Tax Administration (Agencia Tributaria) on account of the seller’s potential tax liabilities.

Fees and Taxes

Once the purchase formalities with the Notary have been completed, CREGO ABOGADOS can arrange, on your behalf, to pay any taxes due in relation to the transaction. Failure to do so mean that registration of the Escritura at the Land Registry cannot take place.

  • Notary’s fees

The Notary’s fees for the execution of the Escritura are fixed by a sliding scale established by law. In accordance with the article 1.455 of the Spanish Civil Code, the expenses of writing granting will be of account of the salesman, and those of the first copy and the other later ones on sale will be of account of the buyer, except for pact in opposite.

 

  • Land Registry’s fees

For the registration of the Escritura at the Land Registry, again a sliding scale is applicable dependant on the purchase price. In accordance with Spanish law the Land Registry’s fees must be paid by the buyer.

 

  • Estate Agency’s fee

The seller will have an agreement with an agent or agents to pay them a commission upon completion of a sale to a client that agent has introduced, the commission the vendor has to pay will always be reflected in the final negotiated purchase price.

The Commissions on resale properties are generally between 3% and 5% but can be up to 10% or even more with some agencies.

The commission for New Developments under construction is built into the price, which will always be the same whether you purchase on your own or with the help and assistance of a good agent.

 

  • Transfer Tax or VAT (Impuesto de Transmisiones Patrimoniales o IVA)

If the seller is a private individual and not a property developer, the sale is subject to a Transfer Tax (“Impuesto sobre Transmisiones Patrimoniales” – ITP) at the rate in 2016 of 8% at “Comunidad Autonoma de Murcia” and 10% at “Comunidad Valenciana”, levied on the purchase price as declared in the Escritura (Article 11.1.a) LITP-AJD)

If the seller is a company or developer, the sale is subject to a VAT (“Impuesto sobre Valor Añadido” – IVA) at the rate in 2016 of 10% (Article 91.1.7º LIVA) will be levied on the purchase price plus a Stamp Duty Tax at the rate of  1,5% (Article 31.2 LITP-AJD)

Registration in the Land Registry

The signing of the Escritura de Compraventa transfers the ownership of the property. However, the Escritura alone does not guarantee your title to the property. To be enforceable against all other persons the Escritura must be registered in the Land Registry. This must be done immediately after its execution.

As it is only registration at the Land Registry which is proof of ownership, the Escritura that is in possession of the buyer it is not very important document because it is only a certified copy anyway, as the original is always kept by the Notary.

After completion

After completion, you will need to apply to the Spanish utilities for the electricity, gas, water and telephone to be registered in your name and the community charges.

You may also communicate to the “Catastro” (Murcia) or SUMA (Alicante) that the owner of the property has changed and also you should have to communicate to the Community of Owners that you are the new owner of the property.

We recommend to use your non-resident Spanish bank account to pay by direct debit your accounts for electricity, water, IBI, etc.

Real Estate Sale in Spain


If you are thinking to sale your Spanish Property, before setting a sale price, you should be aware of all the associated costs and taxes, in order to be able accurately to calculate the net amount you will receive from the sale.

In CREGO ABOGADOS we have years of experience in selling properties of non-residents in Spain and we offer a complete advise, starting for a due diligence of your property to prepare the sale correctly, we will accompany you to the Notary, or we will assist on your behalf in virtue of a power of attorney, and we will fulfill all the tax forms and will pay them and the other costs on your behalf.

The contract
  • The Preliminary Contract

In some cases, the property can sell very quickly, perhaps because is especially attractive, or it has a very good priced.

As a result it is very often that the seller was asked to sign some form of document to confirm the interest to sale.

There are various types of preliminary documents, but the most common it is the Reservation Contract.

Our firm have a lot of experience checking this documents and the sign of one of this is one of the main steps when you sell a property, for this reason, please ask us for advice.

Reservation Contract

It is a written document in which the seller offers to take a stated property off the market for a fixed period and to sell it at a stated price to a stated person at any time within a stated period.

The seller will usually require that the potential buyer pay him a deposit. Once he has received this deposit the seller must reserve the property for the buyer until the end of the period specified in the contract.

If the potential buyer does not go ahead he would lose him deposit. If the seller refuses to go ahead the buyer is entitled to claim compensation.

The contract could contain special “get out clauses” (condiciones resolutorias) stipulating the circumstances in which the buyer will be entitled to the refund of his deposit if he decides not to go ahead. The drafting of these clauses is of vital importance and CREGO ABOGADOS can give you a very good advice.

 

  • The Full Contract. “Contrato privado de compraventa”

This is not a preliminary contract. It is a full, binding commitment to sell  the property. It is the most common type of document and it is called “Contrato privado de compraventa”.

It is an agreement that commits both parties. The seller must sell a stated property at a stated price to a stated person on the terms set out in the contract. The buyer must buy

CREGO ABOGADOS has a lot of experience drawing and checking this kind of contracts fixing in each contract all of the terms necessary to protect your position.

The contract will contain the following clauses:

The seller and buyer should both be stated fully.

The property should be described fully, both in an everyday sense and by reference to its land registry details.

A date for the signing of the deed of sale (escritura) will be fixed or the contract will permit either party to require the signing of the escritura at any point by giving notice to the other.

A statement will be made as to when possession will take place – normally, on the date of signing the title.

The price is fixed.

A receipt for any deposit is given (“arras”).

The property should be sold with vacant possession.

The property should be sold free of any charges, debts or burdens and all bills should be paid up to date before signing the escritura.

It will provide for who is to pay the costs of the purchase.

It may confirm the details of any agent involved and who is to pay his commission.

It will set out what is to happen if one or both of the parties break the contract.

It will establish the law to cover the contract and the address of the parties for legal purposes.

It is very usual to include in the “Contrato privado de compraventa” an “arras” agreement that it is a special deposit payable by the buyer.

If the buyer fails to complete he will lose the deposit (normally a 10% of the purchase price). If the seller fails to complete he will have to return double the deposit paid.

If the parties fail to comply with their obligations there is the ultimate remedy of seeking a court order.

The Deed of Sale
  • What is the escritura?

In UK, when you sell a property, you exchange contracts, receive the money form the buyer, hand over the keys and the property is of the buyer, after which the buyer is free to register the title in the land register, but in Spain it is not possible to register a contract in the land register, only it is possible to register a deed of sale (escritura).

The deed of sale is the title document proving who is the owner of the property and containing a detailed description of the property itself. It is, under Spanish law, necessary for the Escritura to be signed before a Spanish Notary Public.

 

  • Who is the Notary?

The Notary is a public official who put on the public record the fact that the title deed recording the sale/purchase has been signed in his presence and understood by the parties concerned.

 

  • What does the Notary do?

The function of the Notary is not to advise or to protect either your interests or the interests of the person selling the house.

When the Escritura is signed in front of the Notary the purchase price must be, in his presence, handed over to the person selling the property or the seller must confirms that the money has already been handed over. Proof of such payment must be then incorporated into the title deeds of the property.

 

  • Do I have to be in Spain to complete the transaction?

The buyer and the seller of the property may attend in person in front of the Notary, but, if this is inconvenient, CREGO ABOGADOS can attend on their behalf if one of both provide us with a Power of Attorney. A Power can be drafted for signature near your home.

 

  • Where must the price of the property be paid?

The price of the property is usually paid by the buyer to the seller in front of the notary. This is the best and safest way. You can, in fact, agree to pay in whatever way and wherever you please.

In the case of a seller who is not tax resident in Spain the buyer is obliged to retain 3% of the price and pay it to the Spanish Tax Administration (Agencia Tributaria) on account of the seller’s potential tax liabilities.

The Deed of Sale (Escritura)
  • What is the escritura?

In UK, when you buy a property, you exchange contracts, pay the vendor, get the keys and the property is yours, after which you are free to register your title in the land register, but in Spain it is not possible to register a contract in the land register, only it is possible to register a deed of sale (escritura).

The deed of sale is the title document proving who is the owner of the property and containing a detailed description of the property itself. It is, under Spanish law, necessary for the Escritura to be signed before a Spanish Notary Public.

 

  • Who is the Notary?

The Notary is a public official who put on the public record the fact that the title deed recording the sale/purchase has been signed in his presence and understood by the parties concerned.

 

  • What does the Notary do?

The function of the Notary is not to advise or to protect either your interests or the interests of the person selling the house.

When the Escritura is signed in front of the Notary the purchase price must be, in his presence, handed over to the person selling the property or the seller must confirms that the money has already been handed over. Proof of such payment must be then incorporated into the title deeds of the property.

 

  • Do I have to be in Spain to complete the transaction?

The buyer and the seller of the property may attend in person in front of the Notary, but, if this is inconvenient, CREGO ABOGADOS can attend on their behalf if one of both provide us with a Power of Attorney. A Power can be drafted for signature near your home.

 

  • Where must the price of the property be paid?

The price of the property is usually paid by the buyer to the seller in front of the notary. This is the best and safest way. You can, in fact, agree to pay in whatever way and wherever you please.

In the case of a seller who is not tax resident in Spain the buyer is obliged to retain 3% of the price and pay it to the Spanish Tax Administration (Agencia Tributaria) on account of the seller’s potential tax liabilities.

Taxes selling property in Spain
  • TAX RETENTION ON A SPANISH PROPERTY TRANSFER.

When a non-Spanish resident owner of a Spanish property sells, the buyer has to retain 3% of the declared sale price and pay this to the Spanish Tax Authority in the Tax Form 211, to cover the vendor’s Capital Gains Tax (CGT) liabilities.

If the 3% retained exceeds the taxes due, the vendor can expect a refund once all taxes have been paid. On the other hand, if the vendor’s tax bill is greater than the 3% retention, the Spanish tax authorities may chase the vendor back home, though it is unlikely.

 

  • PLUSVALIA TAX (IMPUESTO SOBRE EL INCREMENTO DEL VALOR DE LOS TERRENOS DE NATURALEZA URBANA).

This is a municipal tax on the increase in urban land value; The Plusvalia is based on the assessed increase in the official value of the property from the date of the previous sale to the date of the current sale. The amount payable varies widely since it is based upon the assessed increase in the land’s value and the lapse of time since the prior transaction. The amount payable also depends on the location of the property and the applicable scale.

In accordance with Spanish law the Plusvalia Tax must be paid by the seller.

 

  • CAPITAL GAINS TAX.

When a non-resident of Spain sells his/her Spanish property he/she is obliged to pay capital gains tax. Capital gains tax is applied to the difference between the original purchase price of the property (the acquisition value) and the sale price (the transfer value).

The acquisition value is the amount that he/she paid for the property including any expenses and tributes he/she paid resulting from the purchase but not including any interest charges from these.

The transfer value is the amount he/she sells the property for minus the expenses and taxes linked to the sale and paid by the vendor.

Previously to 2014, there were updating coefficients to increase the purchase price in an attempt to bring the purchase price in line with inflation, nevertheless these coefficients were abolished with Spain’s recent tax reforms. From 2016, the capital gain obtained on the difference between the purchase price (with no adjustment made for inflation) and the sale price, is taxed at the rate of 19%.

In order to guarantee that non-resident sellers pay this tax, Spanish law (Article 25.2 LIRNR) provides that in the case of a non-resident seller transferring a property located in Spain, the purchaser is obliged to retain a 3% of the purchase price on account of the sellers potential tax liability and deposit this retention in the tax office. This retention should be declared and paid by the buyer using the Tax Form 211, and the buyer will give a copy of the Tax Form to the seller as soon as he/she pays it.

If the buyer fails to retain and deposit the 3% of the purchase price and the seller does not pay the amount due, the tax authorities can levy this sum on the property.

This tax withheld functions as an advance payment of the capital gains tax payable by the vendor.  If the 3% retained is higher than the amount of capital gains tax due, the Spanish tax authorities will refund to the vendor the difference. If the capital gains due exceeds the tax withheld, the vendor must pay the difference.

The vendor must declare the transaction within 4 months of the completion, in virtue of the Tax Form 210.

There is a tax exemption for reinvestment in the main home for taxpayers from the EU, Iceland and Norway, applicable only to property sales from 1 January 2015.

If you’re a resident of a member state of the EU or the European Economic Space with a two-way exchange of tax information with Spain, you can be exempt from capital gains tax when you sell your property in Spain providing all the following conditions are met:

The property is your main residence in Spain.

The total amount gained from the sale is reinvested in the purchase of a new main residence.

When the amount reinvested is lower than the total amount received from the property sale, only the amount reinvested in the new property will be exempt from capital gains tax.

The charge´s cancellation cost
In the case of existing charges or debts on the property, obviously they must be paid before the purchase, unless otherwise agreed with the buyer.

In the case of a mortgage, probably will be cancellation fee on the pending amount owed to the bank. This is a huge cost selling a property in Spain. Therefore, always is a good idea try to negotiate with the buyer his subrogation on the existing mortgage. Fact that would save big money to both parts.

If the charges and encumbrances are inscribed in the Land Registry, as is the case of a mortgages in Spain, the cancelation of this charge will make necessary the signing of a cancellation deed before a notary, the Stamp duty, and the cost of the Land Registry.

 

  • BANKING COSTS

At the moment of signing the mortgage deeds was agreed the cancellation fee. Use to be between 0% and 0.5% on the pending mortgage capital. This is a big cost selling a property in Spain.

Once the mortgage capital and the cancellation fee is paid, is necessary to obtain from the bank a mortgage cancellation certificate, in order to proceed to the cancellation of the charge in the Land Registry. The Bank of Spain says that the certificate must be free of cost.

 

  • NOTARY

To cancel a previous charge, inscribed in the Land Registry, for selling a property in Spain, is necessary the signing of a cancellation deed before a notary. For that purpose it is necessary to present the certificate given by the mortgage bank declaring that the debt is zero.

 

  • STAMP DUTY. IMPUESTO SOBRE ACTOS JURÍDICOS DOCUMENTADOS (IAJD)

With the new mortgage regulation in Spain, cancelling a mortgage is exempt from payment the Stampt duty, however still is necessary filling the tax (zero tax). This works in such way in the case of the mortgage, if the burden is of a different nature probably it is still obliged by the stamp duty.

 

  • THE LAND REGISTRY

The documents required by the Land Registry for the charge cancellation are: the certificate given by the bank, the tax form filled and the cancelation deed.

 

  • ADMINISTRATIVE MANAGER

Probably the buyer will need a mortgage to buy the property in Spain, what will imply that his bank requires all paperwork made by someone they trust. Therefore, the cost of the Administrative manager company is imposed by the buyer’s bank, even if you are capable to do the paperwork by yourself. Administrative manager will take all the necessary steps to cancel the prior mortgage in the Land Registry. The manager fee is not regulated and may vary from company to company.

Other possible costs of selling property in Spain
  • ESTATE AGENCY FEE.

The seller usually covers the estate agency fee. The applicable percentage of the fee needs to be individually negotiated in each case. The typical range of estate agency fees for ‘ordinary’ Spanish property sales is 3-5% plus IVA. (A higher % applies if it is a low value transaction).

 

  • ENERGY PERFORMANCE CERTIFICATE.

In order to market a property for sale, Spanish property owners are legally required by the Royal Decree 235/2013, to have an up to date Energy Performance Certificate. CREGO ABOGADOS will be able to recommend a local authorized certificate provider with a fair price for this service.

 

  • COMMUNITY ADMINISTRATOR CERTIFICATION.

In case of sale of a property in Spain that is part of a community of owners, the seller must provide a certificate of debts stating that the transferor is up to date in the payment of the community fees or specify the debts existing (art 9.1.e Law 49/1960).

The certificate must be issued by the secretary of the community with the approval of the President.

The property is liable for the debts not paid by the transferor of the annuity ongoing and the three preceding.

Another important obligation for the seller in relation to the community of owners, is to inform the administrator or community responsible for the sale of the property. Article 9.1.i Law 49/1960 establishes the seller’s liability for the debts produced after the purchase date in case of lack of communication to the community of owners the new situation.

 

  • BANK CHARGES.

If you are going to repatriate to your country the price received for the sale, we recommend to use a specialist Foreign Exchange broker. Usually, the exchange rates and the commission for the bank transfers of the money are better than offered by the banks.

 

  • NOTARY COSTS.

Although technically this should be a shared cost, it is often the case that the buyer pays the Notary fee. But sellers need to be aware that this is an area of possible negotiation. The amount of the Notary fee will depend on the value and complexity of the transaction. But we recommend that the budgeted figure is around 0.75-1% plus IVA. So it is important to agree before exchanging contracts, how this cost will be borne.

Property Taxes


The annual taxes payable by all property non-residents owners, are the Real Estate Tax (IBI), and the Non-Resident Income Tax, and regarding with the last one, CREGO ABOGADOS can help you with the tax statements, in order that you do not worry about that, each year.

Real Estate Tax (IBI)
This is a local tax, i.e. levied by Municipal Governments, which is payable by real state-owners, residents and non-residents.

All real estate in each municipality is included in a census (Catastro) and has an assigned value (its catastral value). The amount payable is calculated by applying the tax rate set by the Municipal Government to the catastral value.

Each year, a Real State Tax payment slip is issued for each property in the census. Municipal Governments normally allow the payment to be made by direct debit to a bank account, which makes it easy for the taxpayer to pay the tax before the deadline and thus avoid surcharges.

The period for payment varies depending on the municipality, but it is normally around the months of September, October and November each year.

Non Resident Income Tax
It is a wide misconception that non-residents are not subject to the Spanish Income Tax. The difference between a resident and a non-resident is that the first pays these taxes on his world income and world-wide assets and the second only over his Spanish income and assets.

The Non-Resident Income Tax (Impuesto Sobre la Renta de no Residentes) applies to anyone who owns a property that is not their main home, and, if not rented out, a notional rental income is deemed to arise.

The tax is based on a notional rental (estimated income) calculated as follows:

On a general basis it is 2% of the catastral value of the property which appears on the Real Estate Tax receipt (Real Estate Tax = “IBI”).

In the case of property whose catastral value has been modified in the last ten years, the percentage has been set at 1,1%.

The liability takes effect once a year on December 31, and the taxable amount is in year 2016 the 19% of the estimated income.

In contrast with the local Real Estate Tax which is paid on receipt of a demand, the Income and Wealth Tax must be declared by the owner himself or by his appointed tax representative using tax form 210.

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