|BUYING IN SPAIN
Sunset Estates deal with many resale properties making us one of the
most popular choices for people ready to move to Spain or moving up
the property ladder. The normal procedure, once you have found a property
you want to buy, is that a Contract of Sale and Purchase is drawn
up by your lawyer and a deposit is paid.
The Contract is signed by both the Seller and the Purchaser. Once
this Contract is signed and the deposit paid, this commits both
parties to the price and the conditions of the Contract. Incidentally,
your UK lawyer is almost certainly not qualified to practice in
Spain. Your Spanish Lawyer (English speaking - essential if you
wish to avoid pitfalls) should check out the following on your behalf,
before paying over the deposit to the vendor.
A COPY OF THE ESCRITURA (TITLE DEEDS)
This confirms that the people who claim to be the owners are the
people named on the Escritura.
NOT A SAMPLE
This is a document from the Land Registry office showing who is
the legally registered owner of the property. It also shows if there
are any mortgages or other encumbrances registered against the same.
The name/s on the Nota Simple should match the name/s on the Escritura
Once your Lawyer has seen these documents, is satisfied that the
property belongs to the person who claims to be the owner, and has
confirmed that there are no mortgages or other encumbrances, he
will ask you to proceed with the Contract.
However, before signing and paying the deposit he should ensure
that the following are included in the Contract:
That the purchase price and conditions of payment are clearly written
All charges on the property, ie community fees, electricity, water
(which may be included in the community fees), telephone bills and
rates, are paid. These items are the responsibility of the vendor
up until the day of the signing of the Escritura (Title Deed) by
the new purchaser. This is most important, as many debts in Spain
are on the property and not the person. The purchaser should only
be responsible for any debts on the property from the day of the
signing of the Escritura (Title Deed) and the handing over of the
keys. It is most important that your Lawyer has proof that any outstanding
debts, are up-to-date before signing the Escritura and handing over
the final payment.The Contract should contain:
A complete description of the property - ie lounge, dining room,
kitchen, number of bedrooms and bathrooms, terraces, etc. The total
square metres of the plot and of the apartment or house.
The full registration details of the property. This information
is obtainable from either the Escritura or the Nota Simple.
There should be a section in the Contract headed Cargas (Charges).
This should read ‘Free of Charges and Encumbrances’
- if there is a mortgage on the property this should be stated here.
If you do not wish to take over the mortgage but would like it paid
off by the seller, this should be stated in the Conditions of Payment
section of the Contract.Mortgages in Spain are usually assumable,
ie if there is an existing mortgage on a property and a purchaser
wishes to take it over and carry on the remaining payments, then
this often possible. Under normal circumstances the lender (usually
a Spanish Bank) requires little or no proof of income from the new
There should be a clause in the Contract concerning vacant possession
on completion. This should read ‘Free of Sitting Tenants’.
If the property is being sold furnished - which is often the case
when buying a resale property in Spain - a complete inventory should
be drawn up and signed by both parties. This document should be
annexed to the Contract.
Under recent Spanish legislation, the purchaser is obliged to retain
5% of the value declared on the Escritura. This sum will be paid
over to the Notary by your Lawyer. It is most important that this
is also mentioned in the Contract of Sale and Purchase. The 5% retention
only applies if the vendor is non-resident in Spain (in other words,
if the vendor does not have residential status in Spain at the time
of selling). The 5% retained by the Notary is paid over to the Spanish
Hacienda (Inland Revenue), who ascertain if the vendor has any outstanding
tax liabilities before returning the 5% to him - usually within
The Contract will normally contain a Penalty Clause, which states
that if the balance outstanding is not paid by the agreed date (specified
in the Contract), the purchaser will lose the amount paid and the
vendor is free to offer the property for sale again. A potential
purchaser has no call against the property, therefore, before you
sign the Contract and pay the deposit you must be absolutely sure
that you can pay the balance on the agreed date.
Although it is unlikely that the vendor will back out of the sale
at the last minute - after signing the Contract - this is always
a possibility. Therefore, it is a good idea to have a further Penalty
Clause inserted in the Contract stating that if (for any reason)
the vendor does not complete on the Contract and wishes to withdraw,
he must pay the purchaser an indemnity of double the amount paid
as a deposit for the purchase of the property.
If the property you intend to buy was built within the last 5/6
years your Lawyer should ask to see proof that a Building Licence
was obtained and that a certificate of the termination of the building
(Certificado de Fin de Obra) and the licence of the first occupation
(Licencia de Primer Ocupation) have been issued. Your Lawyer can
obtain copies of these documents from the local Town Hall.The vendor
is also obliged to present the last receipt of payment of rates
(Contribuciones or I.B.I.) at the Notary’s Office or to your
Lawyer, prior to the signing of the Escritura. It is photocopied
onto official Notarial paper and included in the Escritura. Your
Lawyer should also obtain a certificate from the local Rates Office
(Recaudacion Provincial) stating that there are no outstanding rates
to be paid. With regard to the annual Community Fees, it is now
necessary for your Lawyer to obtain a certificate from the Administrator
of the Community showing that the fees are paid up-to-date on the
property you are purchasing. This is for the Notary, your Lawyer
should obtain this certificate for you and present it to him, along
with the other documentation necessary for Notary to prepare the
Escritura. It is an obligation that your Lawyer should check on
the day of signing the Escritura that no debts or mortgages have
been registered against the property since he made the first search,
when the purchaser signed the Contract of Sale.
EXTRAS TO THE PURCHASE PRICE
These will amount to approximately 10% of the total being paid for
Made up as Follows: RESALE PROPERTY - Transfer tax 6%
NEW PROPERTY - IVA (vat) at 7% + 0.5% Stamp Duty
LAND REGISTRY CHARGES
There may also be a charge for Plus Valia, which is a type of Capital
Gains Tax. Your Lawyer will normally ask you for the full 10% when
he requests you to provide him with the amount of the purchase price.As
the Lawyer is never quite sure exactly what the total of the ‘extras’
will be, the 10% is an estimate and at a later date, after you have
purchased the property, he will provide you with a statement of
his disbursements and fees listing everything that has been paid
on your behalf.
Often there will be a surplus in your favour which he will return
It was often the case that purchasers under declared the value of
a property when registering an Escritura. The obvious benefit was
a saving on the 6% transfer tax. However, these days the Spanish
Authorities take a sterner attitude and substantial under-declaration
is likely to be discovered and fines levied. Take your Lawyer’s
advice on this ‘touchy’ subject.
This is the Numero de Identificacion de Extranjeros (or Foreigners
Identification number). Your Lawyer will obtain this for you prior
to signing the Escritura, as it is an essential for all non-residents
buying property in Spain.
CERTIFICADO DE DIVISAS
This is a certificate provided by the Bank, stating that the funds
for purchase were imported from outside of Spain. If you have used
your Lawyer’s Clients’ Account to import the money for
the purchase of your new home, he will arrange the certificate from
his Bank. The certificate is recorded on the Escritura (Title Deed).
MAKING THE FINAL PAYMENT
If you do not propose to be in Spain to attend the Notary’s
Office in person, then your Lawyer can take a Power of Attorney
from you and act on your behalf. He will need funds transferring
from your UK bank account to his Clients’ Account, to make
the final payment.Your Lawyer will sign the Escritura (Title Deed)
for you - you can countersign yourself the next time you are in
Spain.Once the Escritura has been signed and the purchase price
paid over to the vendor, you will be able to obtain a Copia Simple
(simple copy) of the Escritura of your new home from the Notary.
The original Escritura is sent - by the Notary - to the Land Registry
Office, so that he can register your name as the new owner. Depending
on the workload of the Land Registry Office, your original Escritura
can usually be collected from the Notary’s Office within 2
to 3 months. Normally your Lawyer would collect this for you and
advise you that he is holding it on your behalf ready for collection
If after visiting our website, you would like to come out to the
Costa del Sol on an inspection visit, there are a number of alternatives.
- Simply book your own flight - our associates in Spain will be
pleased to arrange your accommodation in a pleasant centrally situated
small Hotel in Fuengirola - prices vary according to season - details
- You can arrange your own flight and accommodation package deal.
In these circumstances it is always advisable to pre-book an appointment
in Spain before you travel. Simply ring the UK office, who will
arrange an appointment for you in our associate Spanish Office.
- There is, of course, nothing to prevent you calling into our associate
office in Spain without an appointment. However, they are often
busy and, as your time is at a premium, we do advise a prior appointment.
WE STRONGLY ADVISE YOU TO BRING A DEPOSIT WITH YOU.
THIS IS BEST BROUGHT IN TRAVELLERS' CHEQUES AND SHOULD BE AT LEAST
£1,000. WE HAVE A CONSTANT DEMAND FOR WELL-PRICED PROPERTIES
AND THERE IS LITTLE POINT IN FINDING AN
IDEAL PROPOSITION IF YOU ARE UNABLE TO SECURE IT. AT NO TIME WILL
YOU BE PUT UNDER PRESSURE TO BUY - ANY ADVICE WHICH IS GIVEN WILL
BE UNBIASED AND PROFESSIONAL.
ONCE YOU HAVE FOUND THE PROPERTY YOU WISH TO PURCHASE,
THE PROCEDURE IS RELATIVELY STRAIGHTFORWARD AND WE WILL BE PLEASED
TO DIRECT YOU ON ALL ASPECTS. NO TWO SALES ARE THE SAME
HOWEVER, THE FOLLOWING IS A GENERAL GUIDE TO PURCHASING A PROPERTY
1) Once you have found the property you wish to buy and agreed
the price, our associates in Spain will introduce you to an English-speaking
Solicitor. Alternatively, you can select a Solicitor of your own
choice. This is for your own protection and the benefits far outweigh
the costs. We insist that all purchasers use the services of a Spanish
2) The Solicitor will explain the Spanish conveyancing procedure
(which is very similar to UK conveyancing these days) and he will
answer any questions you may have. Once you are happy with all aspects
of the transaction you will be required to pay a Holding Deposit
and sign the Agreement to Purchase. Your Solicitor will then request
the property owner to counter-sign the Agreement. At this point
the Holding Deposit is handed over to the vendor and the property
is taken off the market.
We do urge you to be SURE that you wish to go ahead when signing
the Agreement to Purchase and paying a Holding Deposit. Please remember
that at this stage the Holding Deposit is not refundable.
3) Your Solicitor will also obtain Power of Attorney on your behalf,
which will enable him to conclude the legal formalities in your
absence should you not be in Spain at the time of completion.
4) The Solicitor conducts a thorough search into the property.
Evidence is required that such items as community charges, rates,
water and electricity bills, etc. are paid up to date. If for any
reason any of these items are unpaid, or the seller cannot provide
the necessary receipts, then money is withheld from the proceeds
of the sale to cover these items.
Nothing is left to chance - it is impossible for the buyer to inherit
any past debts.
5) Once all the paperwork has been checked by the Solicitor and
found to be in order, he will contact you to discuss completion
details and explain how to forward the balance of the purchase price
6) The final payment for the purchase of the property is normally
due 6 to 8 weeks after the Agreement to Purchase has been signed.
However, extended completion times can often be agreed to suit the
individual requirements of a purchaser. Money can be transferred
from the UK to complete the purchase - in accordance with your Solicitor's
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