Spanish Property Law

A brief outline of the process of purchasing Spanish Property

We will assist in the various steps you will need to take before you become a Spanish property owner. Understanding the nature of purchasing property in Spain is a must.

When you buy a property in Spain you must ensure that the seller is the lawful owner of the property.

You must also ensure that the property is free of charges, such as a mortgage, tenants or other types of charges.

Next, it is equally important to verify that the local council have authorised the construction on the land where the property has been built.

We recommend that the buyer gets information about any possible development plans for the area. It is common practice that buyer and seller sign an agreement, which normally includes the payment of the deposit, before the exchange of contracts. This is proof of the commitment of both buyer and seller that they are serious about the transaction.

In Spain, the exchange of contracts must be made in front of a Public Notary (Notario), who will ratify that the seller has provided all the required documentation. The purchase will become valid when the deeds of ownership are recorded at the Land Registry.

Once the purchase has been completed, the buyer must inform the local Inland Revenue/Tax Office (Hacienda local) about the change of ownership.

What follows is a simple step by step guide which you will follow once you have found the property of your dreams. From paying over the deposit to paying the taxes at the end of the process Girasol Services will smooth your way through the process.

The deposit.

Once you have found a property as a buyer you will pay a deposit to the seller. This is a condition of purchase in Spanish Law. We will assist in reviewing the terms of the deposit

Terms and Conditions of Purchase

The Terms and Conditions of the Purchase. We will review the Terms and Conditions of the purchase and advise you whether negotiations over a particular term or condition needs to take place.

Land Registry Search.

The Land Registry Search. We will undertake the search which, amongst other things, shows that the seller own the property and is entitled to sell it to you as the buyer.

Exchange of Contracts

This is the point at which you become contractually obliged to buy the property. We will arrange for the Exchange of Contracts and advise you about any penalties resulting from delays (either on your part or on the part of the seller).

Payment and Transfer of Title

This is the point at which you pay over the bulk of the purchase monies, the title (certificate of ownership) is transferred to you.

Taxation: Seller, Buyer and Owner

Taxes attaching to the sale and purchase of the property have to be paid - We will have advised you on the specifics as the transaction progresses. In basic terms:

The buyer is responsible for:

• Transfer tax (or VAT plus stamp duty when buying from a developer)
• Property registration fees
• Notary charges
• Lawyer’s charges

The seller is responsible for:

• Plusvalia or Capital Gains Tax in any increase in the deeds value
• Selling agents fees

Other considerations:

Buying off plan

Buying a property from plans involves different requirements than buying a newly built or already owned property. When buying a property from a developer, you should be aware of what documentation the developer must provide. The taxes applicable will also vary and you should also beware of the risks involved in accepting possible seller’s proposals, such as under declaring the purchase price.

'Ley de Propiedad Horizontal'

There is no such thing as leasehold property under Spanish law, instead there is the 'freehold share community' - this is a device to regulate the way in which shared swimming pools, common stairways or any shared or common area is dealt with. When buying property where there is common ownership the prospective purchaser needs to understand their rights and responsibilities.

Spanish Inheritance Law

Spain has very different laws regulating inheritance. Specialist knowledge is a must when contemplating making a will dealing with Spanish assets.

Welcome to Girasol Services, welcome to Spain.