ALMA Homes

DO I NEED A LAWYER?

When you are planning to purchase or sell a property, a plot of land or any kind of commercial premises, the first move you should make is to contact a Spanish solicitor. As well as your real estate agent, one of the most important players, when buying or selling a property, is your lawyer. An independent professional who will protect your interests and ensure the transaction is trouble free.

WHAT ARE THE STEPS OF BUYING A PROPERTY?

1. RESERVATION CONTRACT:
When we have found the right property for you, we will hand over a written offer for the seller. When the offer is accepted, the next step is to formalise your purchase of the property and remove it from the market. This is done by signing a Reservation Agreement and paying a deposit of (usually) €6,000 - €10,000 to the independent lawyer's or agency's client account. The reservation deposit also freezes the price.

Having a lawyer, NIE number (identity number issued to foreigners in Spain), and bank account opened strengthens a buyer's position when negotiating as he or she can put down an immediate deposit if an offer is accepted, since all the other details will have been taken care of already. If a mortgage is required, the buyer should make sure that this has been arranged beforehand with their mortgage provider.

2. PRIVATE PURCHASE CONTRACT:
Your lawyer will then ask for all the papers relating to the property and start the searches, making sure of the legal situation of the property and and find out possible debts. Once the lawyer has completed the searches to their satisfaction, the next step is to sign the Private Purchase Contract (contrato privado de compravento). The buyer pays a deposit, typically 10% of the purchase (normally 7 - 14 days after the reservation contract) price which will be forfeited in the event of the contract not being completed.

3. DEED CONTRACT:
The final contract of sale (escritura de compraventa) is signed in front of a notary normally 30 - 45 after the reservation, at which point the rest of the sale price, taxes and other costs become due and you will be handed the keys.

HOW MUCH ARE THE FEES OF BUYING OR SELLING A PROPERTY?

Generally speaking in Spain on average the buyer will end up paying around 11%-14% on fees and taxes and the seller around 23% on the profit made from selling the property. There is no fixed fee when it comes to selling a property in Spain as there are many factors that influence the amount of taxes to pay.

BUYERS FEES:

TRANSFER TAX (ITP) Payable by the buyer for the purchase of any Real Estate (villas, flats, land, commercial premises, garages), provided the vendor is not a developer or normally trading in the business of resale properties (waiver to VAT exemption). Reduced transfer tax for real estate companies or professionals that buy resale property and sell within 5 years.	Andalucía has introduced a special flat rate of: 7% For all re-sale properties - Valid from 27-04-21 until 31-12-21 2%
OR: VAT (IVA) AND STAMP DUTY (AJD) Villas, apartments, or a garage that is annexed to an apartment or villa, where the vendor is a developer, promoter or habitual trader for brand-new properties. Parcels of land, for the first sale of brand-new commercial premises.	10 % + 1.2% 21% + 1.2% Valid from 27-04-21 until 31-12-21
NOTARY AND PROPERTY REGISTRY FEES The cost increases according to the number of pages or complexity of the title deed, and value of the property.	+/- € 3,000
MUNICIPAL ADDED VALUE TAX (PLUS VALÍA)This can be as little as a few hundred Euros or as much as many thousands of Euros on a property with a lot of land that has not changed hands in many years. It is a tax by the town hall based upon the increase in the index value of a property between the year of purchase to the year of sale. This tax corresponds, by its nature, to the vendor who is responsible for its payment, unless otherwise negotiated.
LAWYER'S FEESThese are in the order of 1% of the selling price, more or less, depending on the lawyer and the price of the property.	1% + VAT

SELLERS FEES:
As a seller of a property without a mortgage, you are liable for 2 taxes - Plusvalía and Impuesto sobre la Renta (Income Tax)

period of ownership
increases in value over the period
your tax resident status
income during the year you sell

PLUSVALÍA (MUNICIPAL CAPITAL GAINS TAX)
This is levied by the local Town Council on the presumed increase in the value of the land on which your property stands. It is calculated on the rise in rateable value over the period of ownership. The longer you own a property, the more you pay. But, based on a recent ruling by Spain's Constitutional Court, if you make no gain, you should no longer be liable for tax. You have 30 days from completion to pay any taxes due. For non-resident individuals, the buyer will retain tax due, as he or she will be liable in case of non-payment.

IMPUESTO SOBRE LA RENTA (INCOME TAX)
This is levied by the Spanish Tax Agency on any income earned during a fiscal year. It is calculated on the difference between purchase and sale prices as a capital gains tax, and levied according to your tax residency status.

Non Residents

Origin country	Tax
From EU	19%
Non EU	19%

Residents

Capital Gain	Tax
0 - 6,000€ gain	19%
6.000€ - 50.000€	21%
50.000€+	23%
Residents over 65 who sell a primary residence are exempt from tax.	0%
Residents under 65 who sell a primary residence and reinvest in another Spanish property as a primary residence within three years are exempt from tax on the amount reinvested.	0%

When buying from a non-resident seller, buyers are required to retain 3% of the sale price to pay to the Spanish Tax Agency on the seller's behalf.