We come to the thorn in every body’s side when buying a Spanish property. Whilst conveyances in Spain are actually not as complicated as in the UK, the language barrier does not help. Please seek independent legal advice when you are purchasing your Spanish property, do not just rely on the estate agency to help you with your legal work, after all at the end of the day estate agents are there to make a sale and get their commission. At Link Point, we can make your purchase much simpler and more comprehensive. We can carry out all the property searches and corresponding checks on the property. We can liaise with banks should you need a mortgage and will help with any presale contracts and be at the Notary on the day to make sure that everything runs smoothly.
Once your sale is complete and you are the proud owner of a Costa Blanca residence, we will carry out all the utility changes for you, so you do not have to deal with the supply companies.
We also deal with two to one property transfers. In all cases you will be advised of stage payments and any taxes due, notary and registry fees.
For further advise do not hesitate to contact our office and speak to our Licensed Conveyancer, Michelle Roper.
Do not hand over any monies without first consulting an independent lawyer and ensuring that you know where your money is being held and what it is being used for whilst it is being held on your behalf. Remember YOUR MONEY is YOUR MONEY and should never be used for other purposes unless the person holding it has your express permission to go buy a yacht or a new house or even pay their own bills !!!!!
Buying Off Plan
Let’s assume that you have set your heart on a new spanish home. There are many factors involved when buying a new build. When you think that you have found “the one”, the first thing that you must do is contact an independant laywer. One that has no relation to the agents, promoters or developers. These are all there to make a sale and make money and this could involve a hard sale and putting pressure on you to sign a contract. DON’T! And do not hand over any monies without first seeking independant legal advice. Their lawyers are there to protect their interests not yours. This sounds hard but it is a fact.
The first thing your lawyer will do is check that the developers have all the correct permits in place, and that the land is debt free and has no infractions. They can also run a check on the developers!
A presale contract will be issued to you, have your lawyers check it through with you, and indeed, have it translated if you feel the need, although some already have a translation to English included. If this is the case be particularly careful as the Spanish and English versions don’t always tally. On the signature of the contract you will be requested to make a deposit. The developer should issue a bank guarantee for any monies deposited.
When the property is ready to be inhabited, the Town Hall will issue a certificate to that end, a “Licencia de Primera Ocupación” or the previously known “Cédula de Habitabilidad” (First Occupation Certificate). This cannot be obtained if there is no planning permission and this will lead to there being no “Certificado de Final de Obra” (Final Works Certificate). The Final Works Certificate must be given to the Town Hall in order for them to issue the First Occupation Certifcate. This, as one can imagine, can have disasterous effects, as without this not only can you not legally live in your new home, but also you cannot contract any supplies in your name.
Beware of living in a property supplied with builder’s water and electrcity (sometimes for years), as the supply companies can quite easily request back payment for any of the builder’s debts with them. You cannot contract in your own name until the outstanding debt is settled and you will find your supplies cut off, thus incurring a reconnection fee. You will have to pay and reclaim from the builder later, who may have well gone bankrupt. We suggest that as soon as you have your First Occupation Certificate and you have signed the Deed in the Notary (in this order please!) you immediately contract all the supplies in your own name.
Certificates of Non Infringement on Town Hall Planning
Obtained from the Town Hall, it is one of the most important documents when purchasing a property, especially a second hand property. Relatively simple to apply for in most cases, via a simple application to the Town Hall, and payment of a fee, between 40€ to 100€ (they used to be free but nowadays very little is free). It involves the Town Hall Architect visiting the property to inspect it and issuing a report as to the legality of the property. In some Town Halls you will be requested to present your own plans for the property which will raise the cost, but in the end is money well spent for peace of minds.
Capital Gains Tax:
In Spain Capital Gains Tax for Residents, calculated as part of the Spanish Income Tax,is now a minimum of 21% . When you sell your home as a non resident 3% of the declared value of the property will be retained by the Notary on the date of the signing of the Sale Deed. The remaining amount is deductible on your tax return.
Any expenses incurred during the sale (Notary fees, Lawyer’s fees, Property registration fee) can also be offset against this. You need official receipts for all these, request them from your lawyer and save them for when you do your tax return.
Residents over 65 years old selling their first residence, if they have lived there for three years or more.
Residents who reinvest all the benefits of the sale, within a period of two years from the date of sale, to purchase another first residence, providing that they have lived there for three years or more. If they only reinvest a percentage of the proceeds of the sale then the relief will be proportional.
What if you don’t make a gain?
If you don’t make a gain even though you will still have to pay the 3% retention to the Tax offer (retained by the buyer and paid by the seller on their behalf), you will be able to reclaim this money back.
You will need:
* The Deed by which you bought
* The Deed by which you sold
* Your ID
* The form 211 (found at the back of the sale deed)
* A bank certificate stating you are the account holder. This can be from your bank in Spain or in your country of residence.
It will take a minimum of 6 months to a year and you will have had to put in your Non Residents Tax returns for the last four years.
Contact us and we will be able to assist you with the claim.