Experts in Property Conveyancing

We are a lawyers’ office in Marbella that offers personalized and complete legal advice on various real estate law issues. We are specialists in the conveyancing transactions. Our wide experience has allowed us to position ourselves as Lawyers in Marbella who set the standard in Conveyancing Services.

At MT Legal Lawyers Marbella, we want to provide assistance with your conveyancing requirements at a very competitive price with quality and professionalism.
Our main goal is to help you solve your problems in the most satisfactory way possible.

We offer a conveyancing service in Marbella for all types of real estate properties.

Our services include assistance in the following matters:

  • Conveyancing of all types of real estate properties (residential, commercial, rustic, etc.).
  • Mortgages.
  • Residential, commercial and rustic rentals.
  • Setting up real rights over real estate property.
  • New building declarations/ registrations.
  • Registrations at the land registry.
  • Claims for construction defects.
  • Building contracts and contractual service contracts.
  • Others.

Call us at
(+34) 952 778 342

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Conveyancing Services

THE PURCHASE PROCESS

Once you decide to buy a property in Spain and the price has been agreed with the seller, it is advisable to appoint an independent lawyer to assist you in your purchase transaction.

MT LEGAL LAWYERS will ensure the property is legal, there are no hidden charges or attachments and your money is safe until completion.

LEGAL SEARCHES:

After appointing MT LEGAL LAWYERS to assist you in your purchase process, we will request the seller to provide all the necessary paperwork to make the appropriate legal searches and check that everything is in order.

LEGAL REPORT:

Once this information is available to us and we have done the appropriate legal searches, we will prepare a legal report informing you on the legal situation of the property, and the terms and conditions of your purchase transaction.

RESERVATION CONTRACT / PRIVATE PURCHASE CONTRACT:

If everything is in order, we will ask you to authorize the signing of the reservation contract or the private purchase contract (in some cases, it will be necessary to sign a reservation contract first; sometimes you will simply sign the private purchase contract).

When the reservation contract is signed, a partial payment of approximately 3,000-10,000 Euros of the price will be required.

When the private purchase contract is signed, a partial payment of approximately 10-30% of the price (minus the reservation deposit, plus VAT in off-plan properties) will be required.

COMPLETION:

The next step will be the signing of the title deeds on completion before a public notary. At that stage, the balance of the purchase price (and the VAT, in off-plan properties) is paid, and possession of the house is received. From that moment, you will be the lawful owner of the house.

By completion, in off-plan properties, MT LEGAL LAWYERS will check that the developer has obtained the appropriate licences (habitation licence) so that everything is in order and you can receive possession of the house legally; in second-hand property transfers, we will ensure there are neither debts nor charges affecting the property. We will assist you with the signing of your title deeds in due course.

POST-COMPLETION:

After completion, you will be required to pay stamp duty (in off-plan properties, 1.5% of the purchase price) or transfer tax (between 8 and 10%, only in second-hand properties).

It will also be necessary to register your title deeds at the land registry, complete the registration with the community of owners, register the new owners for the payment of the local taxes (council tax and rubbish tax), and arrange for the connection of your utilities. Also, in off-plan transactions, if you are not planning to come during the days before completion or a few days after, it is advisable to appoint somebody to prepare the snagging list of the house, so that we can ask the developer to solve any physical damage at the property. MT LEGAL LAWYERS will assist you with all these matters in due course.

WHAT’S NEEDED WHEN BUYING A PROPERTY?

When buying a property in Spain, you will need to prepare the following:

  • NIE Number| This is the Spanish tax number which will allow you to pay taxes in Spain. This document is obtained at the police station. MT LEGAL LAWYERS will assist you with your NIE application in due course.
  • Spanish Bank Account| In order to prepare the purchase payments, you will need to open a Spanish bank account. This bank account will also be needed to set up direct debits for the payment of utilities, the community of owners’ fees, and local taxes.
  • Notarized Copy of Your Passport| This is required for the NIE application. MT LEGAL LAWYERS will assist you in this matter in due course.
  • Evidence of Incomes/Savings| In order to comply with EU and Spanish anti-money laundering legislation, your bank will request you to provide evidence of where your funds are coming from. This evidence can be contracts, tax declarations, bank certificates, etc. Your lawyer will assist you in this matter in due course. This information may also be required if you are planning to finance the purchase transaction with a mortgage.
  • Power of Attorney(POA)| We will need you to grant a power of attorney before a public notary so that we can do all the work needed to complete the purchase transaction on your behalf. This POA will allow us to make payments, negotiate and sign contracts, sign your title deeds, pay taxes, connect utilities, make payments through your bank, apply for your NIE number, etc. MT LEGAL LAWYERS will assist you with the granting of the POA in due course.

PURCHASE COSTS

The costs of buying a property in Spain are in the region of 13-14% (off-plan properties) or 10-12% (second-hand properties) of the purchase price.
The purchase costs are as follows:

OFF-PLAN PROPERTIES:

LEGAL FEES

Our fees are 1% of the purchase price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT. This will cover all the necessary legal work from A to Z, without any time limitation. Fifty per cent of our fees should be paid on instruction, and the balance on completion. On instruction, we will also require the necessary funds to cover the miscellaneous provision. The rest of the expenses should be paid post-completion, with the exception of VAT on the purchase price, which is proportionally paid with every partial payment of the purchase price.

VAT

This tax amounts to 10% of the purchase price

STAMP DUTY

This tax amounts to 1.5 % of the purchase price

NOTARY FEES

In the region of 500-2,000 Euro approx., depending on the price

LAND REGISTRY FEES

In the region of 350-900 Euros approx., depending on the purchase price

UTILITY CONNECTION FEES

In the region of 400 Euros, approximately

BANKING COSTS

In the region of 300-600 Euros, approximately

POWER OF ATTORNEY NOTARY FEES

In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain)

MISCELLANEOUS

You also have to bear in mind a provision of 200 Euros to cover minor and unforeseen expenses (i.e. courier fees, land registry certificate fees, NIE taxes, etc.)

SECOND-HAND PROPERTIES:

TRANSFER TAX

This tax varies depending on the purchase price: – Up to 400,000 Euros: 8% of the purchase price – From 400,001 to 700,000 Euros: 9% of the purchase price. – More than 700,000 Euros: 10% of the purchase price. For example, a second-hand property transaction for a property with a purchase price of 800,000 Euros, will pay for the transfer tax 69,000 Euros (32,000 Euros for the first 400,000 Euros, 27,000 Euros for the next 300,000 Euros, and 10,000 Euros for the last 100,000 Euros). It is also important to remark that this tax is calculated based on the value of the property for each buyer, so if the property is bought by two buyers, and each one has a share of 50%, then the total transfer tax due per buyer would be 8%, as each share would have a value of 400,000 Euros. The transfer tax is the main difference between off-plan property purchase transactions and second-hand property purchase transactions. In second-hand transactions, there is no VAT or stamp duty. Another difference is that transfer tax is paid post-completion, while VAT is paid with every partial payment of the price.

NOTARY FEES

In the region of 500-2,000 Euros approx., depending on the price

LAND REGISTRY FEES

In the region of 350-900 Euros approx., depending on the purchase price

UTILITIES CONNECTION FEES

In the region of 400 Euros, approximately

BANKING COSTS

In the region of 300-600 Euros, approximately

POWER OF ATTORNEY NOTARY FEES

In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain)

MISCELLANEOUS

You also have to bear in mind a provision of 200 Euros to cover minor and unforeseen expenses (i.e. courier fees, land registry certificate fees, NIE taxes, etc.)

LEGAL FEES

Our fees are 1% of the purchase price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT

MORTGAGE COSTS

The mortgage costs will vary depending on whether you are setting up a new mortgage (set-up costs will be in the region of 3-5% of the principal, approximately) or are taking out an existing mortgage (in this case, costs will be in the region of 1-2% of the principal, approximately)

ANNUAL COSTS

After buying your property, you will have to bear in mind the following costs every year:

  • Council Tax (IBI Tax)| This is a tax paid to the local Town Hall, and the amount due varies depending on the value of the house (from 300 Euros to 1,000 Euros, approximately). Advice about the IBI tax due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS.
  • Rubbish Tax| This is also paid to the Town Hall, and the amount due also varies depending on where the property is located. This tax varies from 120 to 200 Euros per year, approximately. Advice about the rubbish tax due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS
  • Community of Owners’ Fees| This cost also varies depending on the services received from the community of owners (cleaning, security, swimming pool and gardening maintenance, etc.). Advice about the community fees due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS
  • Non-Resident Income Tax| Non-resident property owners are required to pay income tax to the Spanish. This tax is due even if you are not renting your property and therefore are not receiving any income. The tax office considers there is a minimum potential income that could be obtained, and they charge taxes on that minimum potential income. This minimum potential income stated by the tax office is 1.1% of the cadastral value of the house (the cadastral value of the house is normally lower than the market value of the house), and they charge between 19 and 24% (depending on your country of tax residency) of that amount. For example, the owner of a property with a cadastral value of 200,000 Euros would have to pay taxes for the minimum potential income of 2,200 Euros at 19% (EU residents), a total of 418 Euros. We assist our clients with the annual non-resident income tax declaration for a fee of 125 Euros plus VAT per declaration
  • Home Insurance Policy| Although this is not compulsory, it is highly advisable that you have a home insurance policy in place. The cost of this will be in the region of 200-500 Euros per year, approximately

THE SELLING PROCESS

You can put your property on the market and try to sell it personally, or be assisted by a real estate agency which will not only increase the number of prospective buyers interested in buying your house, but will also assist you in deciding the reasonable selling price and manage your selling expectations. The real estate agency fees are normally in the region of 4 to 7.5 %, plus VAT (21%), depending on the services provided.

LEGAL SEARCHES

There are some documents and information that must be available to the buyer’s lawyers so that they can do the appropriate legal searches to ensure that the property is legal and there are no debts nor charges affecting your house. This is normally required by any buyer prior to committing to buy and paying any deposit. We explain what these documents are in the next paragraph (“WHAT DOCUMENTS ARE NEEDED WHEN SELLING?”)

RESERVATION CONTRACT / PRIVATE PURCHASE CONTRACT:

If after doing the appropriate legal searches everything is satisfactory to the buyer, we will ask you to authorize the signing of the reservation contract or the private purchase contract, depending on what has been agreed with the buyer (in some cases, the signing of a reservation contract will be agreed first, and after that a private purchase contract; sometimes you will simply sign the private purchase contract).

When the reservation contract is signed, the buyer will make a partial payment of 3,000-10,000 Euros of the price, approximately.

When the private purchase contract is signed, the buyer will make another partial payment of 10-30% of the price, approximately (minus the reservation deposit).

COMPLETION

The next step will be the signing of the title deeds on completion before a public notary. At that stage, the balance of the selling price is received, and possession of the house is given to the buyer.

In the event that the seller is non-resident in Spain, the buyer will withhold 3% of the selling price and will pay this to the tax office within 1 month after completion. This 3% retention works as a provision to cover the payment of the capital gains tax of the non-resident seller (currently, the capital gains tax amounts to 19% of the net profit obtained by the seller from the sale).

If there is no profit obtained from the sale, or the 3% retained is more than the capital gains tax due, then the seller is entitled to claim the refund of this 3% (or the remaining surplus) from the tax office after completion.

On completion, the property must be up to date in all payments (i.e. community of owners’ fees, council tax, etc.) and the appropriate certificates showing this must be provided to the buyer. We will ensure these certificates are obtained in due course.

Also, in the event that there is any mortgage on the house, it must be cancelled simultaneously the title deeds are signed. We will ensure the bank’s representative attends completion to this end, and the buyer prepares a separate cheque to pay off the mortgage loan, so everything is arranged properly.

If you are assisted in the sale by a real estate agency, we will also ensure the buyer prepares a separate cheque for the payment of their commission on completion, and the appropriate invoice is provided by the agency.

POST-COMPLETION:

After completion, the following work will need to be done:

  • Pay the Plusvalía tax.
  • Submit form 210 (“Modelo 210”) for the payment of capital gains tax, or to claim the refund of the 3% retained: in the event of claiming the refund of the 3% retention, a bank certificate must be provided confirming the bank account details where the funds should be refunded. The tax office takes from 9 to 18 months approximately to refund the funds.
    Please note that in order to get these funds refunded by the tax office, it is essential that you are up-to-date with the payment of the annual non-residents income tax (please see information about ANNUAL EXPENSES in our BUYER’S GUIDE in this respect).
  • Inform the administrator of the community of owners about the sale of the property and the new owner’s details.
  • Inform the Town Hall about the sale.
  • Ensure the utilities contracts have been duly transferred to the buyer’s name, or cancel those contracts if this has not been arranged by the buyer in a reasonable period of time.

WHAT DOCUMENTS ARE NEEDED WHEN SELLING?

As explained above, when selling a property, it is necessary to have certain documents available for the buyer so that the appropriate legal searches can be done. MT LEGAL LAWYERS will assist you in obtaining all these documents:

  • Copy of your title deeds
  • Updated certificate from the land registry (up to 3 months old)
  • Last IBI and rubbish tax bills
  • Last utility bills
  • Certificate from the administrator of the community of owners confirming the property is up-to-date, the cost of the community fees, and on which basis they are paid
  • Articles of association of the community of owners
  • Energy Performance Certificate (EPC)
  • Seller’s NIE number
  • If there is a mortgage, a bank certificate confirming the mortgage balance. It is also advisable to have the mortgage conditions available for prospective buyers, in case they are interested in taking on the existing mortgage
  • Power of attorney: granted to your lawyers, so the necessary arrangements to complete the sale can be done on your behalf
  • First Occupation Licence/Habitation Licence (“Licencia de Primera Ocupación”)
  • To claim the 3% refund, a bank certificate confirming the seller’s bank account details
  • If the property is sold furnished, an inventory of the furniture
  • If the seller is a tax resident in Spain but is not Spanish, it is also necessary to obtain a tax certificate from the tax office confirming the seller is a tax resident in Spain, so that the 3% retention can be avoided

Additional documents may be required in some cases (i.e. when the seller is a company, the “Acta de Titularidad Real”, etc. is required). MT LEGAL LAWYERS will provide the appropriate advice and assistance in this respect in due course

SELLING COSTS

When selling a house, the seller must bear in mind the following expenses:

  • LEGAL FEES: Our fees are 1% of the selling price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT. This will cover all the necessary legal work from A to Z, without any time limitation. Fifty per cent of our fees should be paid on instruction, and the balance on completion.
  • MORTGAGE CANCELLATION COSTS: Apart from the outstanding mortgage and the bank mortgage cancellation commission, in order to cancel the mortgage at the land registry, the bank representative has to sign the mortgage cancellation deeds at the notary, and these mortgage cancellation deeds must also be registered at the land registry, so that the property is sold to the buyer free of charges. The notary and land registry fees for these arrangements are in the region of 400-600 Euros, approximately. MT LEGAL LAWYERS will ensure they are duly paid after completion.
  • REAL ESTATE AGENCY’S COMMISSION: This cost is in the region of 4 to 7.5% of the selling price, plus VAT (at 21%), depending on the services provided by the real estate agency. This amount is due on completion.
  • CAPITAL GAINS TAX: As explained above, this is 19% of the net profit, and when the seller is non-resident, the buyer withholds 3% of the selling price, paying this to the tax office as a provision of funds. If there is no profit, the seller will be entitled to claim the 3%, providing the annual non-resident income tax is up-to-date. We will take care of this after completion.
  • PLUSVALIA TAX: This is a local tax which is payable to the Town Hall. The amount due varies depending on the cadastral value of the property, the number of years the property has been owned by the seller, and the town where the property is based. The amount due for this tax is normally in the region of 600 to 3,000 Euros, approximately, although in some cases the amount due can be higher for properties of high value which have been owned for a long period of time.
    MT LEGAL LAWYERS will make an initial estimation of the Plusvalia tax on instruction to avoid any last-minute surprises, and will ensure it is properly paid after completion.
  • ENERGY PERFORMANCE CERTIFICATE (EPC) fee: This document shows how efficient the house is from the perspective of electricity consumption. The cost of this document is in the region of 80-200 Euros, approximately. We will assist you in obtaining this document in due course.
  • BANKING COSTS: In the region of 300-600 Euros, approximately.
  • POWER OF ATTORNEY NOTARY FEES: In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain).
  • MISCELLANEOUS: You also have to bear in mind a provision of 150 Euros to cover minor and unforeseen expenses (i.e. community of owners’ certificate fees, land registry certificate fees, etc.).

On instruction, we will also require the necessary funds to cover the miscellaneous provision and cost of the EPC. Again, as the property must be sold free of charges and be up-to-date in all payments, if there is any outstanding debt pending payment, the seller will also have to bear in mind the necessary funds to cover the payment of any eventual debts.

+ BUYER’S GUIDE

THE PURCHASE PROCESS

Once you decide to buy a property in Spain and the price has been agreed with the seller, it is advisable to appoint an independent lawyer to assist you in your purchase transaction.

MT LEGAL LAWYERS will ensure the property is legal, there are no hidden charges or attachments and your money is safe until completion.

LEGAL SEARCHES:

After appointing MT LEGAL LAWYERS to assist you in your purchase process, we will request the seller to provide all the necessary paperwork to make the appropriate legal searches and check that everything is in order.

LEGAL REPORT:

Once this information is available to us and we have done the appropriate legal searches, we will prepare a legal report informing you on the legal situation of the property, and the terms and conditions of your purchase transaction.

RESERVATION CONTRACT / PRIVATE PURCHASE CONTRACT:

If everything is in order, we will ask you to authorize the signing of the reservation contract or the private purchase contract (in some cases, it will be necessary to sign a reservation contract first; sometimes you will simply sign the private purchase contract).

When the reservation contract is signed, a partial payment of approximately 3,000-10,000 Euros of the price will be required.

When the private purchase contract is signed, a partial payment of approximately 10-30% of the price (minus the reservation deposit, plus VAT in off-plan properties) will be required.

COMPLETION:

The next step will be the signing of the title deeds on completion before a public notary. At that stage, the balance of the purchase price (and the VAT, in off-plan properties) is paid, and possession of the house is received. From that moment, you will be the lawful owner of the house.

By completion, in off-plan properties, MT LEGAL LAWYERS will check that the developer has obtained the appropriate licences (habitation licence) so that everything is in order and you can receive possession of the house legally; in second-hand property transfers, we will ensure there are neither debts nor charges affecting the property. We will assist you with the signing of your title deeds in due course.

POST-COMPLETION:

After completion, you will be required to pay stamp duty (in off-plan properties, 1.5% of the purchase price) or transfer tax (between 8 and 10%, only in second-hand properties).

It will also be necessary to register your title deeds at the land registry, complete the registration with the community of owners, register the new owners for the payment of the local taxes (council tax and rubbish tax), and arrange for the connection of your utilities. Also, in off-plan transactions, if you are not planning to come during the days before completion or a few days after, it is advisable to appoint somebody to prepare the snagging list of the house, so that we can ask the developer to solve any physical damage at the property. MT LEGAL LAWYERS will assist you with all these matters in due course.

WHAT’S NEEDED WHEN BUYING A PROPERTY?

When buying a property in Spain, you will need to prepare the following:

  • NIE Number| This is the Spanish tax number which will allow you to pay taxes in Spain. This document is obtained at the police station. MT LEGAL LAWYERS will assist you with your NIE application in due course.
  • Spanish Bank Account| In order to prepare the purchase payments, you will need to open a Spanish bank account. This bank account will also be needed to set up direct debits for the payment of utilities, the community of owners’ fees, and local taxes.
  • Notarized Copy of Your Passport| This is required for the NIE application. MT LEGAL LAWYERS will assist you in this matter in due course.
  • Evidence of Incomes/Savings| In order to comply with EU and Spanish anti-money laundering legislation, your bank will request you to provide evidence of where your funds are coming from. This evidence can be contracts, tax declarations, bank certificates, etc. Your lawyer will assist you in this matter in due course. This information may also be required if you are planning to finance the purchase transaction with a mortgage.
  • Power of Attorney(POA)| We will need you to grant a power of attorney before a public notary so that we can do all the work needed to complete the purchase transaction on your behalf. This POA will allow us to make payments, negotiate and sign contracts, sign your title deeds, pay taxes, connect utilities, make payments through your bank, apply for your NIE number, etc. MT LEGAL LAWYERS will assist you with the granting of the POA in due course.

PURCHASE COSTS

The costs of buying a property in Spain are in the region of 13-14% (off-plan properties) or 10-12% (second-hand properties) of the purchase price.
The purchase costs are as follows:

OFF-PLAN PROPERTIES:

LEGAL FEES

Our fees are 1% of the purchase price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT. This will cover all the necessary legal work from A to Z, without any time limitation. Fifty per cent of our fees should be paid on instruction, and the balance on completion. On instruction, we will also require the necessary funds to cover the miscellaneous provision. The rest of the expenses should be paid post-completion, with the exception of VAT on the purchase price, which is proportionally paid with every partial payment of the purchase price.

VAT

This tax amounts to 10% of the purchase price

STAMP DUTY

This tax amounts to 1.5 % of the purchase price

NOTARY FEES

In the region of 500-2,000 Euro approx., depending on the price

LAND REGISTRY FEES

In the region of 350-900 Euros approx., depending on the purchase price

UTILITY CONNECTION FEES

In the region of 400 Euros, approximately

BANKING COSTS

In the region of 300-600 Euros, approximately

POWER OF ATTORNEY NOTARY FEES

In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain)

MISCELLANEOUS

You also have to bear in mind a provision of 200 Euros to cover minor and unforeseen expenses (i.e. courier fees, land registry certificate fees, NIE taxes, etc.)

SECOND-HAND PROPERTIES:

TRANSFER TAX

This tax varies depending on the purchase price: – Up to 400,000 Euros: 8% of the purchase price – From 400,001 to 700,000 Euros: 9% of the purchase price. – More than 700,000 Euros: 10% of the purchase price. For example, a second-hand property transaction for a property with a purchase price of 800,000 Euros, will pay for the transfer tax 69,000 Euros (32,000 Euros for the first 400,000 Euros, 27,000 Euros for the next 300,000 Euros, and 10,000 Euros for the last 100,000 Euros). It is also important to remark that this tax is calculated based on the value of the property for each buyer, so if the property is bought by two buyers, and each one has a share of 50%, then the total transfer tax due per buyer would be 8%, as each share would have a value of 400,000 Euros. The transfer tax is the main difference between off-plan property purchase transactions and second-hand property purchase transactions. In second-hand transactions, there is no VAT or stamp duty. Another difference is that transfer tax is paid post-completion, while VAT is paid with every partial payment of the price.

NOTARY FEES

In the region of 500-2,000 Euros approx., depending on the price

LAND REGISTRY FEES

In the region of 350-900 Euros approx., depending on the purchase price

UTILITIES CONNECTION FEES

In the region of 400 Euros, approximately

BANKING COSTS

In the region of 300-600 Euros, approximately

POWER OF ATTORNEY NOTARY FEES

In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain)

MISCELLANEOUS

You also have to bear in mind a provision of 200 Euros to cover minor and unforeseen expenses (i.e. courier fees, land registry certificate fees, NIE taxes, etc.)

LEGAL FEES

Our fees are 1% of the purchase price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT

MORTGAGE COSTS

The mortgage costs will vary depending on whether you are setting up a new mortgage (set-up costs will be in the region of 3-5% of the principal, approximately) or are taking out an existing mortgage (in this case, costs will be in the region of 1-2% of the principal, approximately)

ANNUAL COSTS

After buying your property, you will have to bear in mind the following costs every year:

  • Council Tax (IBI Tax)| This is a tax paid to the local Town Hall, and the amount due varies depending on the value of the house (from 300 Euros to 1,000 Euros, approximately). Advice about the IBI tax due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS.
  • Rubbish Tax| This is also paid to the Town Hall, and the amount due also varies depending on where the property is located. This tax varies from 120 to 200 Euros per year, approximately. Advice about the rubbish tax due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS
  • Community of Owners’ Fees| This cost also varies depending on the services received from the community of owners (cleaning, security, swimming pool and gardening maintenance, etc.). Advice about the community fees due for your house will be provided with the initial legal report we will prepare for you after confirming instructions to MT LEGAL LAWYERS
  • Non-Resident Income Tax| Non-resident property owners are required to pay income tax to the Spanish. This tax is due even if you are not renting your property and therefore are not receiving any income. The tax office considers there is a minimum potential income that could be obtained, and they charge taxes on that minimum potential income. This minimum potential income stated by the tax office is 1.1% of the cadastral value of the house (the cadastral value of the house is normally lower than the market value of the house), and they charge between 19 and 24% (depending on your country of tax residency) of that amount. For example, the owner of a property with a cadastral value of 200,000 Euros would have to pay taxes for the minimum potential income of 2,200 Euros at 19% (EU residents), a total of 418 Euros. We assist our clients with the annual non-resident income tax declaration for a fee of 125 Euros plus VAT per declaration
  • Home Insurance Policy| Although this is not compulsory, it is highly advisable that you have a home insurance policy in place. The cost of this will be in the region of 200-500 Euros per year, approximately
+ SELLER’S GUIDE

THE SELLING PROCESS

You can put your property on the market and try to sell it personally, or be assisted by a real estate agency which will not only increase the number of prospective buyers interested in buying your house, but will also assist you in deciding the reasonable selling price and manage your selling expectations. The real estate agency fees are normally in the region of 4 to 7.5 %, plus VAT (21%), depending on the services provided.

LEGAL SEARCHES

There are some documents and information that must be available to the buyer’s lawyers so that they can do the appropriate legal searches to ensure that the property is legal and there are no debts nor charges affecting your house. This is normally required by any buyer prior to committing to buy and paying any deposit. We explain what these documents are in the next paragraph (“WHAT DOCUMENTS ARE NEEDED WHEN SELLING?”)

RESERVATION CONTRACT / PRIVATE PURCHASE CONTRACT:

If after doing the appropriate legal searches everything is satisfactory to the buyer, we will ask you to authorize the signing of the reservation contract or the private purchase contract, depending on what has been agreed with the buyer (in some cases, the signing of a reservation contract will be agreed first, and after that a private purchase contract; sometimes you will simply sign the private purchase contract).

When the reservation contract is signed, the buyer will make a partial payment of 3,000-10,000 Euros of the price, approximately.

When the private purchase contract is signed, the buyer will make another partial payment of 10-30% of the price, approximately (minus the reservation deposit).

COMPLETION

The next step will be the signing of the title deeds on completion before a public notary. At that stage, the balance of the selling price is received, and possession of the house is given to the buyer.

In the event that the seller is non-resident in Spain, the buyer will withhold 3% of the selling price and will pay this to the tax office within 1 month after completion. This 3% retention works as a provision to cover the payment of the capital gains tax of the non-resident seller (currently, the capital gains tax amounts to 19% of the net profit obtained by the seller from the sale).

If there is no profit obtained from the sale, or the 3% retained is more than the capital gains tax due, then the seller is entitled to claim the refund of this 3% (or the remaining surplus) from the tax office after completion.

On completion, the property must be up to date in all payments (i.e. community of owners’ fees, council tax, etc.) and the appropriate certificates showing this must be provided to the buyer. We will ensure these certificates are obtained in due course.

Also, in the event that there is any mortgage on the house, it must be cancelled simultaneously the title deeds are signed. We will ensure the bank’s representative attends completion to this end, and the buyer prepares a separate cheque to pay off the mortgage loan, so everything is arranged properly.

If you are assisted in the sale by a real estate agency, we will also ensure the buyer prepares a separate cheque for the payment of their commission on completion, and the appropriate invoice is provided by the agency.

POST-COMPLETION:

After completion, the following work will need to be done:

  • Pay the Plusvalía tax.
  • Submit form 210 (“Modelo 210”) for the payment of capital gains tax, or to claim the refund of the 3% retained: in the event of claiming the refund of the 3% retention, a bank certificate must be provided confirming the bank account details where the funds should be refunded. The tax office takes from 9 to 18 months approximately to refund the funds.
    Please note that in order to get these funds refunded by the tax office, it is essential that you are up-to-date with the payment of the annual non-residents income tax (please see information about ANNUAL EXPENSES in our BUYER’S GUIDE in this respect).
  • Inform the administrator of the community of owners about the sale of the property and the new owner’s details.
  • Inform the Town Hall about the sale.
  • Ensure the utilities contracts have been duly transferred to the buyer’s name, or cancel those contracts if this has not been arranged by the buyer in a reasonable period of time.

WHAT DOCUMENTS ARE NEEDED WHEN SELLING?

As explained above, when selling a property, it is necessary to have certain documents available for the buyer so that the appropriate legal searches can be done. MT LEGAL LAWYERS will assist you in obtaining all these documents:

  • Copy of your title deeds
  • Updated certificate from the land registry (up to 3 months old)
  • Last IBI and rubbish tax bills
  • Last utility bills
  • Certificate from the administrator of the community of owners confirming the property is up-to-date, the cost of the community fees, and on which basis they are paid
  • Articles of association of the community of owners
  • Energy Performance Certificate (EPC)
  • Seller’s NIE number
  • If there is a mortgage, a bank certificate confirming the mortgage balance. It is also advisable to have the mortgage conditions available for prospective buyers, in case they are interested in taking on the existing mortgage
  • Power of attorney: granted to your lawyers, so the necessary arrangements to complete the sale can be done on your behalf
  • First Occupation Licence/Habitation Licence (“Licencia de Primera Ocupación”)
  • To claim the 3% refund, a bank certificate confirming the seller’s bank account details
  • If the property is sold furnished, an inventory of the furniture
  • If the seller is a tax resident in Spain but is not Spanish, it is also necessary to obtain a tax certificate from the tax office confirming the seller is a tax resident in Spain, so that the 3% retention can be avoided

Additional documents may be required in some cases (i.e. when the seller is a company, the “Acta de Titularidad Real”, etc. is required). MT LEGAL LAWYERS will provide the appropriate advice and assistance in this respect in due course

SELLING COSTS

When selling a house, the seller must bear in mind the following expenses:

  • LEGAL FEES: Our fees are 1% of the selling price, plus VAT (at 21%), with a minimum of 1,400 Euros plus VAT. This will cover all the necessary legal work from A to Z, without any time limitation. Fifty per cent of our fees should be paid on instruction, and the balance on completion.
  • MORTGAGE CANCELLATION COSTS: Apart from the outstanding mortgage and the bank mortgage cancellation commission, in order to cancel the mortgage at the land registry, the bank representative has to sign the mortgage cancellation deeds at the notary, and these mortgage cancellation deeds must also be registered at the land registry, so that the property is sold to the buyer free of charges. The notary and land registry fees for these arrangements are in the region of 400-600 Euros, approximately. MT LEGAL LAWYERS will ensure they are duly paid after completion.
  • REAL ESTATE AGENCY’S COMMISSION: This cost is in the region of 4 to 7.5% of the selling price, plus VAT (at 21%), depending on the services provided by the real estate agency. This amount is due on completion.
  • CAPITAL GAINS TAX: As explained above, this is 19% of the net profit, and when the seller is non-resident, the buyer withholds 3% of the selling price, paying this to the tax office as a provision of funds. If there is no profit, the seller will be entitled to claim the 3%, providing the annual non-resident income tax is up-to-date. We will take care of this after completion.
  • PLUSVALIA TAX: This is a local tax which is payable to the Town Hall. The amount due varies depending on the cadastral value of the property, the number of years the property has been owned by the seller, and the town where the property is based. The amount due for this tax is normally in the region of 600 to 3,000 Euros, approximately, although in some cases the amount due can be higher for properties of high value which have been owned for a long period of time.
    MT LEGAL LAWYERS will make an initial estimation of the Plusvalia tax on instruction to avoid any last-minute surprises, and will ensure it is properly paid after completion.
  • ENERGY PERFORMANCE CERTIFICATE (EPC) fee: This document shows how efficient the house is from the perspective of electricity consumption. The cost of this document is in the region of 80-200 Euros, approximately. We will assist you in obtaining this document in due course.
  • BANKING COSTS: In the region of 300-600 Euros, approximately.
  • POWER OF ATTORNEY NOTARY FEES: In the region of 60-250 Euros (it is normally cheaper to grant the POA in Spain).
  • MISCELLANEOUS: You also have to bear in mind a provision of 150 Euros to cover minor and unforeseen expenses (i.e. community of owners’ certificate fees, land registry certificate fees, etc.).

On instruction, we will also require the necessary funds to cover the miscellaneous provision and cost of the EPC. Again, as the property must be sold free of charges and be up-to-date in all payments, if there is any outstanding debt pending payment, the seller will also have to bear in mind the necessary funds to cover the payment of any eventual debts.

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