Buying a Property in Spain
When buying a home most people think that the Conveyancing required is not very complicated, and that they do not need to seek advice about the house-buying process beforehand. Unfortunately, the purchase of a property in Spain needs a highly qualified group of professionals looking after any of the various legal implications, some of them quite serious, that this could involve.
At MSB we will provide you with the information and knowledge you need regarding the different possible options so that you can decide which is most beneficial to you.
With the current economic climate, it is vital that you have 100% control over your funds.
The Tax Authority has linked up with the Land Registry system and now knows who owns every property; therefore you must know what the price for tax purposes is.
Buyers usually make down payments and sign contracts without the legal assistance of a solicitor, and then end up being left in a completely unprotected position. This needs to be avoided, and a contract should never be signed without a deep study and confirmation from your Legal Firm.
We will also complete a full money laundry prevention due diligence on your purchase, including a detailed KYC, in order to avoid problems with your investment.
The study & writing of the purchase contract.
The first step of the process is to sign a private purchase contract (Contrato Privado de Compraventa) between the two parties involved. If you are purchasing a new build property this will be between you and the builder. If you are purchasing a resale property then this will be between you and the owner of the property.
The contract should include the following:
- Full description of the two parties.
- Full description of the property. If a new property – plans of the property, specifications of the materials, plan of the site and building permission. If it is a resale property, inscription number in the land registry.
- Price of the property and stage payment details.
We would carry out a land registry search to verify that everything stated in the contract was true.
- Establish the current ownership.
- Check that the property is free of debts and other charges.
- Building permissions.
Payments & bank guarantees. (New build properties)
For every stage payment that you make, we obtain a bank guarantee from the builder. This means that if the builder were to go bust before completing the building work, you would not lose your money
Preparing Power of Attorney
We will ask you to give us power of attorney. This is a simple process where we will send the relevant forms for you to complete in UK, or it can be signed in Spain, Power of attorney will enable us to obtain your NIE number (Foreign Identification Number) and also to complete the purchase of the property on your behalf without you being present.
Just prior to completion we will ensure there are no outstanding debts which you could inherit with the property, such as, Council tax, electricity, water, gas and community of owners.
This is a fiscal identification number and is required before you can make any transaction in Spain, such as purchasing a property and paying taxes. We apply for your NIE number on your behalf using the power of attorney.
This takes place in the Notary’s office. If you did not grant us power of attorney we will help you to obtain your NIE number before the completion date and assist you at the notary’s office on the day of completion.
Inscription of ownership in the land registry.
Registering the deed provides the highest public level of protection.
From the day of signing we have a maximum of 30 working days to pay the transfer tax due in relation to the purchase of the property.
Transferring utilities into your name
We will change the water, electricity and gas supplies into your name and set up the payments by direct debit, and also inform all other entities, such as community of owners, etc. of your address and contact details.
Selling a Property in Spain
Sellers often agree a sale price without realising that they may be obliged to pay taxes on a higher amount.
Sellers often sign sale agreements and receive down payments without realising that the sale of the property may be blocked if the buyer pulls out and they do not reach an agreement.
At MSB we help you to understand the legal implications of your decisions before you take them, thus helping you to avoid any potential difficulties.
When selling a home most people think that the Conveyancing required is not very complicated, and that they do not need to seek advice about the house-selling process beforehand. They therefore sign sale agreements without being aware of the legal implications. However, this is not the case as if, for example, you sign a sale agreement this can mean that the tax authorities require that you pay taxes on the basis of what they consider to be the minimum sale price. Consequently, if you have sold your home at a very low price you may not only not make a profit, but you might end up having to pay huge tax bills.
At MSB we will provide you with the information and knowledge you need about the different possible options so that you can decide which is most beneficial to your interests.
Sellers often make down payments and sign contracts without the assistance of a solicitor, and then end up being left in a completely unprotected position.