Once a verbal agreement has been reached, we or your lawyer will prepare a sales contract which includes:
- Seller’s and Buyer’s personal details.
- Property specifications
- Purchase price and terms of payment
- Non-binding translation in language of choice
A deposit will be required upon the signing of the sales contract. This is usually 10% of the purchase price. It is paid either into our reserve client account or directly to you, depending on the terms of the contract.
You must provide:
- Passport or identity card
- NIE (Spanish identification number) obtained in Spain
- Home address
- Bank account details
- Copy of the title deed
- Invoices or payment receipts for water, electricity, gas, telephone and alarm
- Proof of payment of your current property taxes (IBI)
- Name and contact details of the administrator of the community for verification of fee payment
- Current Liveability Certificate (cedula)
Investigation of the property
You are obligated to deliver the property free of debts and liens. We ascertain what property taxes (IBI) and outstanding bills are due. These include community fees, water, gas, electric and alarm bills. We also determine the value added tax (Plus Valia) due at the time of the closing.
We hire a professional and independent service firm, Interhelp Service, to obtain this information. They have many years of experience in doing this and they are very reliable.
Transfer of the title deed (escritura) at the notary.
The notary makes an escritura where he writes down the wishes of the parties involved, judges their identity and legal capacity and composes the document according to the parties’ instructions, making sure that it fits the legal requirements. He also cautions both parties about the obligations each must fulfil as a result of making the agreement.
The choice of the notary is made by the party paying the notary’s fees. This is usually the buyer. We accompany you to the notary and provide translation of the proceedings.
Handing over the property
Handing over the property and the keys normally takes place once the full purchase price is paid and the deed signed. This is usually at the notary’s office. The property must then be vacated.
- Plus Valia is a tax based on the incremental value of the land which the property occupies over the amount of years you have owned it.
- Property Tax (IBI) is always collected in September of every year. A portion may be due for the current year.
- Community fees must be paid. A portion may be due for the current year.
- Utilities must be paid up to date.
- A non-resident retention of 3% of the deed value is held back and sent to the tax bureau (Hacienda) on your behalf. This is to cover any capitals gains tax due on the profits of the sale. After capitals gains taxes are calculated and filed by you, you may get a refund or you may owe more. It is only for non-residents. If you are resident, this is not withheld if you are documented as a taxpayer in Spain, but you may still be liable for capitals gains tax depending on your situation.
- Mortgage cancellation fees are charged by your bank anywhere from 0.5% to 1% on the balance of your outstanding mortgage.
- Notary and Registration fees for mortgage cancellation from €600.00 to €1000.00 are usually retained at the time of closing.
- The Agents Commission is where you receive the best value for the amount paid. We will have provided you with the best service possible and for this we charge the standard rate of 5% of the agreed sales price plus VAT (IVA). The current VAT rate in Spain is 21%.
When we have completed the sale, we will have made both parties happy and content and Be Spoiled by Mike van Essen will have new and old friends who will always be welcome at our office.