Spanish Legal Property Information


Buying or selling property in Spain involves many peculiarities, if the set legal guidelines under Spanish property law are not understood clearly. As the real estate market of Spain especially the residential sector is growing, one can see more and more people, native population and foreign investors alike, are buying property in Spain.

However, it’s wise to take note of all legalities before moving to any kind of deal. For example, if you are thinking to buy property in any part of Spain or moving to live in Spain, you need to consider the real cost of purchasing as there are various taxes and expenditure associated with it.

From the cost of appointing a legal representative to paying transfer tax, called “Impuesto de Transmisiones Patrimoniales” and municipal tax “Plusvalia” on the increase in the value of the land since its last sale, and land registry fee, the buyer should always calculate the amount to be paid to get the actual purchasing cost.

Similarly, in case of buying a new or off plan property in Spain, you, too, have to pay similar kind of taxes although it is slightly different to those for resale. Here the transfer tax is not applicable as you are purchasing directly from a developer whilst you have to pay 7% Spanish equivalent of VAT, known as IVA, based on the purchase price.

Spanish laws, however, clearly states that the off plan purchase contract must contain the delivery date with a penalty clause. In addition, there are some clauses like the 2007 Andalusian decree that protects rights of consumer by asking developers/real estate agents to provide all details including builder identification, property prices, building specification, among others.

For selling a property, as the vendor although you don’t have to pay most of the taxes except the “Plusvalia” (which you may negotiate with the buyer to pay), legal fees and estate agent’s fees are must. In addition, as per the present Spanish laws, both non-resident and resident owners have to pay 19% of the profit when selling a Spanish property.

More to the list, there are others to be paid: business income tax (if you are a non-resident and now run business in Spain such as restaurant or bar), property owner’s imputed income tax which has to be paid annually and the annual real estate tax, called the IBI (“Impuesto sobre Bienes Inmuebles”) i.e. based on the assessed value of your property.

This apart, the Spanish real estate scene also asks you to take a look at the Spanish Wills and Inheritance laws and the tax incurred. This is important as it not only affects your rights on the estate but also your future heirs.

Regardless of the type of Spanish property you are buying or selling, you have to follow all legal guidelines to make the whole process smooth without any technical hurdle.


Tags: , , , , , , , , , ,


marbella marketing

SIGN UP TO MARBELLA ALERTS!

Marbella news direct to your inbox

We regularly update our site with interesting news and events related to Marbella, so if you would like to receive alerts, please enter your email into the box below.