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Sunny Palm Properties - Legal Advice |
Buying
a property in Spain;
We will show you the finest selection of properties advising as
to the best area to invest in, comparing prices and qualities.
When you have made a decision about which property you want to
buy you will be asked to make immediate payment of the RESERVATION
DEPOSIT, thereby ensuring that the property is not sold to another
purchaser.
You will have then a period between 10 and 15 days to exchange
contracts, but before doing so; you should seek PROPER
LEGAL ADVICE and find yourself a lawyer to advice an assist you.
You should ask him for details of the outgoings payable every
year to maintain the property, namely the Annual Real Estate Tax,
the Community Fees, the charges for rubbish collection, the water
rates, the electricity charges and the Property Income and Wealth
Tax in respect of the property that you want to buy.
Prevention is always better than cure. From now on until and after
completion of the purchase, the lawyer will take care and assist
you in all the different steps involved in the transaction. There
are many excellent English-speaking Spanish lawyers in Spain.
Choosing the right lawyer is your guarantee that Spanish Legal
requirements are met, that the property is registered in the vendors
name (seller) and that it is free of any mortgage, charges, encumbrances,
debts or other liabilities. Your lawyer will negotiate and discuss
the purchase terms with the seller’s lawyer. The terms should
not be limited solely to price but should cover in detail all
your requirements like completion date, the form of payment etc.
Once you have appointed your chosen law-firm, they will explain
the procedure involved in buying in Spain and the associated costs.
The next step after paying the reservation deposit is to evidence
the terms of purchase in writing. At this stage the lawyers will
draw up the private contract. It is customary to pay a deposit
of 10% of the price on exchange of contracts, which is normally
refundable if the purchase defaults.
Conversely, if the vendor fails to perform his obligations, you
will be entitled to the resolution of the contract and claim damages
or either demand the obligatory fulfilment of the contract. Before
your lawyer exchanges contracts he will have completed his searches
and investigations in the Land Registry in respect of the property.
Finally on the day fixed for completion your lawyer will go to
the NOTARY PUBLIC to sign the TITLE DEEDS, making the final payment
to the seller who will simultaneously pass over possession of
the property to you, handing you the keys. At this stage the sale
is completed.
Immediately after completion, the notary will fax details of the
title deeds to the local Land Registry to inform them of the identity
of the new owner so as to prevent the property being sold twice.
In this way the Notary and Land Register act together to protect
and guarantee your interests. You will then have to pay the relevant
taxes and have the original title deed submitted to the land registry
for registration of your title. Your lawyer can also arrange for
the transfer to your name of utilities and services such as water
and electricity and organize their payment through a local bank.
The purchase of the property will involve the following expenses:
The Fees;
NOTARY, who charges according to a fixed scale.
His or her charges may range from 340 Euro for a property price
of 120.000 Euro to 601 Euro for a property price of 600.000 Euro.
LAND REGISTRY, as a rule of thumb, 40% of what
the Notary charges.
The Taxes:
If you are buying a re-sale property you are obliged to pay
Transfer Tax (ITP) at 7%.
If you are buying a new property or a property in the course
of construction from a promoter, developer or habitual trader,
then you should pay VAT (IVA) at 7% plus Stamp Duty at 1%.
The VAT (IVA) rate increases to 16% if you are purchasing plots
of land, commercial premises or a garage space.
PLUSVALIA, is a tax levied by the Town Hall based on the particular
area where the property is located, on the surface area of the
land, on the “Catastral” value and on the date of
the previous title deed. This tax may range from a few Euros
to as much as thousands of Euros on larger properties with lots
of land. By law the seller is obliged to pay this tax but it
is common practice for the parties to negotiate on who is to
assume this liability.
Finally bear in mind that your lawyer will charge fees for his
professional services, this will normally range from 1% to 2%
of the price plus VAT (currently at 16%)
If you are looking for a lawyer, we can recommend you :
LEX IURIS
Tel: (+34) 952 546 689
Fax: (+34) 952 547 093
Email: torre@lexiurisabogados.es
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