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Purchasing Your Property
You have found your villa or apartment. You have satisfied yourself that the various outgoings, rates and community fees, if appropriate, etc- are acceptable. now what?
Legal
You must consult a Spanish lawyer experienced in property purchase - the same applies should you sell at some stage. Do not rely on gifted, well-meaning amateurs as experience has shown that you are more than likely to run into severe difficulties. In the extreme you may find that you do not even own the property and /or any parcel of land attaching to the property which may give you the essential right of way to your property.
If you do run into problems you will have to instruct an Abogado in the end.
Your Abogado will do all the things you would normally expect him/her to. He/she will establish that the person selling the property to you is entitled to do so i.e. that he/she legally owns the property.
He/she will also make a number of other enquiries, which you may not be, aware are necessary. These will include ensuring that there are no debts attaching to the property. In Spain various unpaid taxes, bills (electricity, telephone, etc) community fees and outstanding mortgages can be attached to the property. If this are not cleared, you will be in for a surprise- you will be responsible for them.
THE COST OF PURCHASE
It is difficult to be precise as regards the actual costs of property purchase but, as a broad guide, expressed as a percentage of the purchase price, the costs are:
Legal, property registry, notary 3-4%
Transfer tax 7%
In addition to these costs is a local tax known as "plusvalia"•. This is, legally, the responsibility of the seller, but occasionally the purchaser is required (agrees) to pay this tax. The tax varies from town to town but, in general, it is not a significant item.
If you should purchase direct from as developer, no transfer tax is payable but, instead, you will pay IVA (VAT as follows):
Building land: 16%
New completed property 7%
Commercial premises: 16%
On - GOING COSTS
Rates (Impuesto sobre bienes inmuebles - IBI)
These are paid annually to the local council (Ayuntamiento). The amount payable varies from 0,4% to 1,3% for urban property (from 0,3% to 1,22% for rustic property) depending on the municipality in which the property is located.
Community Charges (cuotas de comunidad)
This is not a tax but a charge, which, generally, applies to those living in an urbanisation or an apartment. This charge, depending on the level of services provided by the community, e.g. gardens, swimming pools, etc can be significant and should be determined at an early stage.
Generally
There may be outgoings other tan rates and community charges. Whilst these may not be significant you should ascertain the full extent of all charges at an early stage.
Wealth tax
The value of your property is added to your other assets for the purposes of calculating your liability to wealth tax.
Income tax
If you should rent out your property, the rental income is added to other income and is liable to income tax.
In addition, the benefit "deemed to have arisen from owning property" is added to income for tax purposes. This deemed benefit is based on the rateable value of the property at a rate of 1.1% for property which has been subject to a recent revaluation of rateable values or 2% in other cases.
This information is a guide only and not to be considered as a legal authority.
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Consuelo Silva Real Estates S.L. Galerías Paniagua, local 3 · 11310 SOTOGRANDE (ESPAÑA) · Tlf.: (34) 956 785 035 Fax: (34) 956 795 106 |
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