Are you a foreigner thinking of investing in real estate in Spain? Do you need to guarantee that the property you acquire will be 100% yours?
In addwill, we are below summarizing the basic issues to take into account in buying and selling operations.
Real Estate “Due diligence”.
It is essential that in the sale of real estate, and prior to committing to any agreement with the real estate agency or with the seller, the legal and urban situation of the property is reviewed. This is done fundamentally through the analysis of two documents:
- Registry simple note: It is requested in the property registry. They are public data that everyone can access and therefore have effects against third parties. It will analyze the ownership of the property, charges that may have (loans, embargoes, prohibition of disposition, usufructs, rights of use and habitation, etc.).
- Urban planning file: It is requested at the Town Hall where the property is located. It includes the urban situation of the property, limitation of licenses, habitability uses, buildability, planning situation, etc.
- Real market value of the property: Analyze if the purchase value is the real market value and is equal to the fiscal value for the purposes of paying taxes (verification of values) and knowing in advance the consequences in case of verification of Treasury.
- Extraordinary expenses and debts with the community: Find out in advance if any extraordinary expenses have been approved by the community of owners (elevator, building rehabilitation, façade.) or if there is any outstanding debt.
If, after analyzing the previous documents, it appears that everything is in accordance with the client, you can proceed with the purchase commitment or make a purchase offer. For this, it is necessary that the prior advice is carried out by a specialist in real estate law.
There are several types of contracts to be signed prior to the formalization in public deed of the sale of real estate:
- Reservation contract or signal
It is a contract in which the parties undertake to buy and sell and its specifications will regulate them in the next type of contract they sign, or deposit contract or sales contract.
- Earnest money contract
It is not a contract in itself, but an agreement clause between the parties in which they agree to deliver a property and to receive and pay the price within a set period, with penalties in case of non-compliance by any of the parties.
There are different types of arras:
- Confirmatory deposit
The purchasing party is committing itself to the purchase (or sale, as the case may be) of the property. Serving the amount delivered as deposit, advance payment or advance payment of the agreed price. The parties agree on a “penalty” in case of withdrawal by any of the parties.
- Penitential deposits
The deposit supposes a “promise” of sale, which allows both the seller and the buyer to withdraw from the sale. Of course, the withdrawal has consequences.
If you are a seller and finally do not want to sell, you will have to return double the amount received as a deposit. If you are a buyer and finally decide that you do not want to buy, you will lose the money given as a deposit.
Opting for one or the other implies different rights and obligations, which is why it is so important to have prior advice from an expert in real estate law.
- Private sales contract
It is already a firm sale, and mandatory compliance.
An amount of money is delivered on account of the price and the date of elevation of the contract of sale to the public is set, date on which the payment of the remaining amount will be made and possession of the property will be delivered, as well as of the other obligations that the parties want to agree on.
In all of them they must remember:
- The object of the purchase, that is, the property that is acquired
- The price for which it is acquired
- The term and method of payment
- The date of elevation to public to be able to access the registration in the registry of the property of the sale.
In any case, it should be noted that whatever their form, the contracts are fully binding for the parties, with the consequences and penalties that this generates, so prior legal advice is of vital importance.
If you are a foreigner and want to purchase a property, first of all, in order to operate in Spain, you must have a NIE for tax purposes. It can be requested at the Spanish consulates in each country or at the national immigration police in Spain, by appointment.
Once the NIE has been obtained, an account can be opened in Spain for the payment or collection of the sale and the bank will carry out the money laundering filter.
In case of sale, the buyer will withhold 3% of the price to enter it in the Tax Agency, related to the income tax of non-residents.
At addwill, we have a team of lawyers specialized in the legal review of purchase and sale operations that provide security to the transaction, so that the client can dispose of the property with full guarantees.