IN this week’s article we would like to offer our readers a series of useful tips for selling a property in Spain. To that end, we will analyse the most relevant issues that must be taken into account in these cases. We offer a brief guide so that you can avoid the most common mistakes made when selling a property in Spain.
Negotiation and terms of the agreements to be signed.
Whether selling or buying a property it is key to seek the advice of an independent lawyer. A solicitor expert in conveyancing will prepare deposit contract, contract of arras or private contract of sale that protects you, as the seller, so that the status of the property is acknowledged and accepted. This is also very important when signing the contract with the real estate agent. So that it is drafted in such a way that it’s crystal clear at what point the agency fees are due, what happens if the sale is not completed at the Notary’s office, etc.
Checking the legal status of the property.
An equally essential point is to check the Land Registry and Cadastre to verify whether the description of both coincides, or not, with the physical reality. It is also necessary to verify if there are any encumbrances, burdens or tax liabilities. One aspect that often causes confusion is mortgages. Many people believe that the payment of the last instalment of the mortgage loan automatically releases the existing burden on the property. However, this is not the case. A mortgage can be economically cancelled, but still be registered in the Land Registry. If this is the case, it will be necessary to contact the bank and start the procedure to cancel the inscription in the Land Registry.
Knowing the taxes that the vendor is due when selling a property in Spain.
One of the main tips for selling a property in Spain is to study in advance the taxes that the vendor must pay. Specifically, two: Plusvalia Tax and the Capital Gains Tax. The Plusvalía can be calculated using two methods: the objective method and the real method (the taxpayer can opt for the most favourable one). The Capital Gains Tax is obtained through the difference between the acquisition price and the transfer price, although there are various cases in which this gain may be exempt.
Verifying the occupancy/urban planning status.
One of the first tips for selling a property in Spain that we offer our clients is to check the urban planning status of the property, a common source of conflict between buyers and sellers. If the property has an occupation licence, if there are any open infringement proceedings, etc. At White-Baos Lawyers we have a pre-sale service that will allow you to obtain beforehand the reports from the town hall confirming that everything is correct, etc so that all the relevant documentation is ready before the appearance of a potential buyer.
Preparation of the Title Deed to be signed before the Notary.
The importance of the signing of the title deeds is often overlooked, under the false belief that the Notary will check everything. As we have explained on numerous occasions, this is not the case. There are many issues that are either beyond the notary’s scope (the IBI pro-rata, retention for utilities, etc) or that must be prepared in advance (CEE, certificate of debt in the case of communities of owners, etc). In addition, if you are not a Spanish national but have your habitual residence in Spain, it will be necessary to apply for a tax residence certificate. This will avoid the 3% tax retention established in the Spanish tax legislation.
Conclusions.
At White Baos Abogados we are experts in real estate law. If you want to sell your property in Spain, efficiently and clearly, please do not hesitate to contact us. We will review the documentation of your property and offer you expert legal advice.
The information provided in this article is not intended to be legal advice, but merely conveys information relating to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
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