When a person decides to buy, it is essential to have law firms in Spain like Welex. Ask for your tailor-made quotation! At Welex we advise individuals and companies. We are lawyers and accountants, multidisciplinary. Contact now your reference law firm in Marbella.
-Yes, of course, you must assume that there are differences, not all transactions are the same, it is essential that the client has clear and complete information about the entire transaction… and the expenses in the operation; we, from the first moment, provide a breakdown of expenses, including taxes to be paid and all expenses such as notary, registration, tax settlement and processing.
Regarding how a purchase for a price of 500,000 euros is taxed in Spain, «In this case, an investment for this amount, and in the case of a second transfer, the first 400,000 euros would be taxed at 8%, and the rest, 100,000 euros at 9%, and then you have to pay the notary and the Land Registry … everything would be quantified at approximately 10% of the purchase price,» said the specialist.
Welex, your lawyer specialised in real estate law in Spain comments that «the people who come to the office» looking for fiscal and legal advice regarding the operation they are going to carry out, arrive when they have already chosen the property they are going to buy, therefore they need to know «how to proceed with the purchase from this moment on».
«That is what we do at Welex, we deliver a written report to the customer, we inform them about who the owner is, we clear up any doubts as to whether the person selling has the capacity to sell, including a full description of the property to be purchased, and we analyse any existing charges or liens, mortgages or embargoes that may have been registered on the property…«, he says.
Buying in Spain with firm steps
Not all transactions are successful, some lead to litigation, often due to a lack of proper advice from the outset. Sometimes it happens, the specialist adds, that debts, seizures, unpaid mortgages or even problems arising from an inheritance are involved: «Inheritances are usually a complex issue because they can have several effects«.
What can be found?
-A mortgage on the property in Spain, a debt either because the IBI or the waste collection fees have not been paid; a seizure on the property due to a collection procedure initiated by the Tax Office Board, and it can also happen that the seller does not pay the taxes that he should have paid at the time of purchase, even finding a tax condition for an inheritance…
«Of course our client must know how much is going to pay for water, electricity, gas, maintenance expenses in general to avoid surprises, such as the IBI or the payment of rubbish; in our report we include the situation of the property in the cadastre, specifying its cadastral reference which is an alphanumeric code with 20 characters assigned individually to each property, so that we can identify it on the plans«, indicates.
And what if there’s an extraordinary expense from the community?
-It is necessary to see each specific case, who is going to enjoy it, the service it covers, that is, which owner is going to benefit from it, for example if it is an extraordinary expense from an elevator that was agreed months ago and it is a continuous extraordinary expense over time, or it is a single payment to cover a service that has not yet been installed, therefore, it will be necessary to see the use and enjoyment of the service covered with the payment of that extraordinary expense.
We can find ourselves before the purchase of a new home in a promotion or on the contrary already used, either as an investment or for use as a first or second home. Anyway, it is essential to seek advice.
Likewise, in the case of the purchase of a land for its construction, «We advise you on how to obtain the building permit, we are in contact with your quantity surveyor, your architect and we make sure that it complies with all the legal requirements described by the Law on Building Regulations. We assist you in the purchase of the land, in the declaration of new work under construction and in all the documentation included in the General Law for the Defence of Consumers; of course, we advise you in the signing of the contracts with each of the construction agents, in short, in all the planning of the work«, points out the Welex professional.
What if it’s a piece of land that’s being bought?
-It will be necessary to analyse if the transaction is subject to VAT of 21% plus 1.5% of legal acts that marks the Junta de Andalucía … or alternatively determine if it can be subject to the payment of the Tax on Property Transfers and Documented Legal Acts.
What if the person wants to buy their home with a mortgage in Spain?
-Once the client has chosen the property, we coordinate with the bank the gathering of the documentation, both of the property and the client’s personal and economic capacity documentation and we assist the client in the signing of both the purchase Title Deed in Spain and the loan Title Deed with mortgage guarantee.
«Once we have carried out the study of the property and delivered the report to the client, the time has come to proceed with the private contract of sale; the client must always seek advice before signing because once signed by the parties, the buyer cannot claim for his failure to comply that he is no longer interested in or suited to what was signed«, points out the specialist.
In case the owner does not sign but one person on behalf of the other, Welex verifies the identity of all parties and that they have the capacity to sign.
Then there is the post-purchase process, because buying a property in Spain does not end with the payment of it: «Our office guides the client in the signing of the private contract and the subsequent signing of the deed of sale before a notary. We have to take into account that the private contract is not sufficient for the registration of the property in the name of the buyer, so it will be necessary to sign the public deed and the buyer has the right to choose the notary».
When it is a question of buying a house under construction, the analysis of the documentation is more complex, because other aspects must be evaluated: the building permit to carry out the construction, the review of the plans of the house; the location of the house and what will be the use of the common areas.
And determine whether the seller has complied…
-Yes, of course, when a client hires us we verify that the promoter is registered in the corresponding Commercial Registry, we also obtain information about the property in the Property Registry; and we are aware that the promoter enters these funds in a special account that can only be used for construction; we verify that he offers the buyer a guarantee or insurance that guarantees the return of the amount paid including VAT, plus interest, if there is a delay in the project or if the work is not carried out.
When is a delay worrying?
-In general, we would say that a period beyond six months…; we would have to see the technical causes; usually the contracts include a grace period of three or six months.
Once the building is completed in Spain, adds the professional, the developer must proceed with the registration of the new work in the Land Registry so that it can be sold in accordance with the description of the contract as well as the plans; and the developer must have damage insurance which is obligatory and included in the Law on Building Regulations.
«These insurances must cover the compensation of damages that affect finishing elements or finishes during one year; another insurance of three years for defects that affect constructive elements or installations that can cause a breach of the habitability of the house and a ten year insurance for defects in the foundation, beams, load-bearing walls; that is, structural elements that affect the resistance and stability of the building. At Welex we take care of checking that all these legal procedures have been fulfilled, only then does the time come to sign the deed before a notary«, says the consultant from his office in Marbella.
Are you looking for a law firm in Marbella? Welex, lawyers and economists, is a firm specialised in all types of legal proceedings in civil, criminal and administrative matters, as well as in advising on sales in Spain.
Knowing the Tax liabilities in Spain
At all times, the person interested in buying a home in Spain must bear in mind that other expenses of the operation derived from the purchase process will be added and that must not be ignored.
«For example, the seller pays the capital gain and the notary and property registry fees and the agency fees are generally paid by the buyer, but when we are dealing with a case of a first home of a developer, the law provides that in any case the municipal capital gain, the costs of declaring new construction, horizontal division and cancellation of a mortgage, if any on the property, must be paid by the seller and cannot be assigned that payment to the buyer», he said.
A majority of these operations are carried out by foreigners who do not speak the Spanish language, in Marbella many are British, French, German, Dutch, Danish buyers.
In this respect, the specialist adds that: «At Welex we assist and advice the customer, we assist them in the firm to give them all the legal advice they need and we also see the need for a translator to translate the writing into the customer’s mother tongue in a professional and independent way, although we explain the content and all the clauses included».
The signature before a notary in Spain and the subsequent registration of the deed before the Land Registry are two essential operations, Welex is in charge of preparing the documentation and appearing before a notary accompanying its client.
«In the first part of the document, the deed contains the place of signature and date, and the identification of the notary; then the notary identifies all the parties including their name, their marital status which is important in the case of sellers so that they know who must appear according to their marital economic regime; the address and identity documents and this is essential, because if one person appears on behalf of another, the notary will confirm that the person appearing has sufficient capacity to represent another and sign the deed; the deed also includes a description of the property with its registration data, its cadastral reference, its situation with regard to payment of property tax and community of owners’ fees, this is important because if there are any debts they could be the responsibility of the new buyer», he points out.
According to Welex, your law firm in Marbella is attached to the Spanish sale Title Deed, the certificate of energy efficiency and evidence of what have been the means of payment, if by check or transfer.
After the signing of the deed, the process of tax liquidation and registration in the Property Registry begins: «At Welex we also carry out actions subsequent to the purchase, such as the presentation of taxes to be paid by the buyer and this is done within 30 working days or one month, from the signing of the deed; when all the taxes on the operation have been paid, the authorised copy of the deed is presented in the Property Registry. Once the deed has been registered in the Land Registry, we hand over the original documentation to the buyer, his deed and all the payments made; we also give the client a certificate confirming that he has his title registered in the Land Registry», he says.
There is also a detailed after-sales service: «We help with the direct debiting of the services of your home, we assist with the opening of an account if the client requires it and we take care of the direct debiting of the IBI, the payments of garbage, electricity, water as well as the community expenses».
Our objective, the Welex professional says optimistically, is to protect the interests of our clients «of their investment in Spain» whose regulations and practices are usually unknown to them.
Please do not hesitate to contact our law firm in Marbella, for any tax, accounting and legal queries.
Our multilingual lawyers in Spain are specialists and cover practically all areas of law, both for individuals and companies.
Welex, lawyers in Spain and accountants in Marbella, do not only provide services in Marbella, heart of the Costa del Sol, but also in the rest of Spain.