Do I need to apply to the Spanish government for permission to reside in Spain?
What is a fiscal representative? Do I need one?
A fiscal representative is a person resident in Spain who can handle all matters relating to tax on your behalf. Your fiscal representative will:
receive all relevant correspondence from the Town Hall ("ayuntamiento") and the Spanish Revenue ("hacienda")
advise you of any money required to meet the payments demanded
make the payments on your behalf, leaving you worry and hassle free.
Non-resident property owners are not legally required to have a fiscal representative (N.B: non-resident companies must have one) but for a relatively small fee this service is good value for money. ESHKERI & GRAU offer all our clients this service as a matter of course, and we make only a small charge to cover administrative costs.
How does buying a property in Spain differ from buying a property in England?
Just as in England, most property in Spain is registered at the Land Registry (Registro de la Propiedad). The first stage of the transaction may require both parties to sign and exchange contracts detailing the terms on which the property is changing hands (contrato de arras). As in England, the final stage of the transaction usually happens about one to three months later. A difference in Spain is that the final stage is conducted by a Spanish Notary who drafts the Transfer Deed. As in England, the transfer is registered at the Land Registry once all taxes and other official fees have been paid.
Do I have to pay commission to the estate agent when I buy a property in Spain?
No. As in the UK, the commission earned by the estate agent is paid by the seller. However, the rate of commission is established before the property is marketed. Accordingly, the seller can set the selling price at a level which he wants and the estate agent can earn the commission which he wants. In Spain much the same system operates. However, it is commonplace for the seller to agree a price for the property with the agent. If an estate agent achieves a price above the figure asked by the seller, the agent keeps the difference. Whereas in England a typical rate of commission is between 1.5% and 3%, Spanish estate agents rarely earn less than 5% of the purchase price, although they may have to share that commission with others who have helped to introduce the buyer to the seller or vice versa.
I've heard that I have to pay tax in Spain, even if I only own a holiday home there. Is that true?
Yes. Under Spanish law, non-resident owners have to pay two taxes. Wealth tax ("impuesto sobre el patrimonio [IP]") and non-residents income tax ("impuesto sobre la renta de no residentes"). Wealth tax is 0.2% of the total value of property owned in Spain by the non-resident. Non-residents income tax is 0.5% of the rateable value ("valor catastral") of all property owned in Spain by the non-resident.
How can I ensure that money I have paid to a builder or property developer will not disappear into thin air?
When property is purchased from plans, Spanish law enables a buyer to demand a bank guarantee from the seller for the buyer's benefit for the amount of the deposit paid. If a property developer will not comply with the law at the negotiation stage, the decision to proceed with the purchase must rest with the buyer in full knowledge of the risk involved.
I have been told by the estate agent that some of the purchase monies will have to be paid in cash. I don't mind withdrawing money in cash, but wonder what impact if any it might have on me.
It has been common practice throughout Spain for many years for the seller to understate the purchase price enabling the seller to reduce his or her tax liability. Prospective purchasers may be told that such practice will reduce their initial outgoings by a saving in stamp duty. This is true at the outset, as a purchaser will not pay stamp duty on the amount paid in cash. However, purchasers should be aware that any saving made at the outset is likely to be lost when the property is sold on, as capital gains tax will have to be paid on the additional profit. For non-residents this tax is payable at the maximum rate of 35%.
Can I purchase my property using an offshore vehicle, such as a company registered in Gibraltar or Jersey?
In the past this was a very tax efficient way of purchasing property in Spain. However, the Spanish revenue ("hacienda") have now imposed an annual tax, currently 3%, on property owned by an offshore company (subject to exemptions).
Do I need to apply to the Spanish government for permission to reside in Spain?
Until 1st January 2003 all foreign nationals residing in Spain had to register with the Spanish government as residents of the European Union. Since that date this requirement has been lifted for EU nationals, who need only produce their passports as a means of identifying themselves. However, it is highly recommended to obtain from the police station ("comisaría") a foreigner's identification number ("Numero de Identificacion de Estranjero" or "NIE"). ESHKERI & GRAU can assist you with your application for a "NIE".
martes, 12 de diciembre de 2006
Eshkeri & Grau - other services
Legal services
At ESHKERI & GRAU we work closely with a number of associates in Spain, the UK and the rest of Europe to ensure our clients have easy access to a comprehensive pan-European legal service.
Fields in which our associates specialise include the following:
Spanish criminal defence work
Spanish and UK Immigration law
Spanish and UK consumer litigation, including claims against hotels, airlines, tour companies, etc
Spanish employment matters
Spanish personal injury claims
Commercial litigation in Spain and in the UK
UK Will drafting and estate planning
UK residential and commercial property matters
Non-legal services
We also have well established relationships with organisations in Spain able to advise and assist in respect of a number of other non-legal matters including:
Accounting services
Administrative matters relating to central or local government
Car registration
Home & car insurance
Life assurance
Short and long term property letting
Property purchase and sales
Property maintenance
Architectural services
Land and building surveying services
Home purchase loans
Customs clearance
We will be pleased to introduce you to any of our associates. Where necessary and appropriate we can act as an intermediary so as to ensure that matters proceed as swiftly and seamlessly as possible.
Please contact us for further information.
At ESHKERI & GRAU we work closely with a number of associates in Spain, the UK and the rest of Europe to ensure our clients have easy access to a comprehensive pan-European legal service.
Fields in which our associates specialise include the following:
Spanish criminal defence work
Spanish and UK Immigration law
Spanish and UK consumer litigation, including claims against hotels, airlines, tour companies, etc
Spanish employment matters
Spanish personal injury claims
Commercial litigation in Spain and in the UK
UK Will drafting and estate planning
UK residential and commercial property matters
Non-legal services
We also have well established relationships with organisations in Spain able to advise and assist in respect of a number of other non-legal matters including:
Accounting services
Administrative matters relating to central or local government
Car registration
Home & car insurance
Life assurance
Short and long term property letting
Property purchase and sales
Property maintenance
Architectural services
Land and building surveying services
Home purchase loans
Customs clearance
We will be pleased to introduce you to any of our associates. Where necessary and appropriate we can act as an intermediary so as to ensure that matters proceed as swiftly and seamlessly as possible.
Please contact us for further information.
Eshkeri & Grau Solicitors - Business related services
Perhaps you already have business interests in Spain. Alternatively, you may be considering opening a business here, either on your own or with Spanish partners. Whether you want to renovate properties for resale, buy land for investment or development, or open a branch office of your company in Spain, at ESHKERI & GRAU and with the assistance of our trusted associates, we lead our clients through every stage of the business process, advising them on all pertinent legal, tax and commercial issues. Typically this will include advice and assistance regarding the following:
Company formation
Complying with regulations set by Hacienda, the Spanish internal revenue service
Registering a company with the Registro Mercantil (the equivalent of Companies House in the UK)
Complying with any other relevant local rules and regulations
Accounting and tax advice
Company secretarial services
Negotiating and drafting agreements such as employment contracts, joint venture agreements, sale and purchase agreements, sale of goods contracts, franchise agreements, etc
Purchase or rental of commercial premises
Handling payroll issues
Marketing and advertising (including website design and development)
Our clients have found that they have saved considerable time and money by taking advantage not only of our technical legal knowledge, but also of our diverse contacts throughout Spain and of our experience in and knowledge of the country and its business culture.
At Eshkeri & Grau we will be pleased to discuss with you your specific requirements.
Company formation
Complying with regulations set by Hacienda, the Spanish internal revenue service
Registering a company with the Registro Mercantil (the equivalent of Companies House in the UK)
Complying with any other relevant local rules and regulations
Accounting and tax advice
Company secretarial services
Negotiating and drafting agreements such as employment contracts, joint venture agreements, sale and purchase agreements, sale of goods contracts, franchise agreements, etc
Purchase or rental of commercial premises
Handling payroll issues
Marketing and advertising (including website design and development)
Our clients have found that they have saved considerable time and money by taking advantage not only of our technical legal knowledge, but also of our diverse contacts throughout Spain and of our experience in and knowledge of the country and its business culture.
At Eshkeri & Grau we will be pleased to discuss with you your specific requirements.
Eshkeri & Grau Solicitors - Buying property in Spain
At ESHKERI & GRAU we manage your property purchase every step of the way, from finding and negotiating with an estate agent to registering you as owner of your property with the Spanish Land Registry.
Purchasing a property in Spain typically involves the following stages, although prospective purchasers should take specific advice before entering into any transaction. Click on the headings for further details:
Why use an independent lawyer for Spanish property purchases?
Finding the property
Conducting a survey
Negotiating the selling price
Signing the Private Contract ("Contrato de Arras")
Signing the Transfer Deed ("Escritura Pública de Compraventa")
Paying the purchase expenses & registering the Transfer Deed
Why you should make a Spanish Will
Why use an independent lawyer for Spanish property purchases?
Some people will tell you that you don't need a lawyer to buy a property in Spain. This is true if you truly know what you're doing. For the vast majority of buyers, however, this is dangerous advice. Choosing the right lawyer is important to ensure you meet all Spanish legal requirements, that the property is registered in your name, and that once you own it you don't face any unwelcome surprises such as an outstanding mortgage or development plans for the area which affect your property adversely. By instructing an independent lawyer you ensure you are fully aware of all potential pitfalls - and how to avoid them.
Your first and most important step should be to choose an independent lawyer. Estate agents may encourage you to take advantage of their "free legal service". However, the estate agent is the seller's agent and so will be acting for him, not the buyer. At ESHKERI & GRAU we provide you with an entirely independent service comparable with that which you can expect to receive in the UK. We offer all the legal advice and assistance you need, in fluent English, which avoids the linguistic and cultural problems you are likely to encounter with large numbers of other Spanish lawyers.
Finding the property
The most common way to find property is to consult a number of estate agents. In Spain estate agents typically charge the seller between 5% and 10% of the total sale price. As you may expect, there are a great many estate agents competing for such a high rate of commission. In order to avoid wasting your time it is essential to take advice about the best agents to use for the type of property you are seeking. At ESHKERI & GRAU have extensive local knowledge and can assist you with this important first step.
An alternative to using an estate agent is simply to visit the area where you are seeking a home and look for "se vende" ("for sale") signs. These signs always display a telephone number. If you speak basic Spanish you can usually find out the selling price from one telephone call. Alternatively, ESHKERI & GRAU will be pleased to make the call on your behalf and to negotiate a selling price.
It is also very common to purchase new properties directly from the property developer. The property may have already been built. Alternatively, you may wish to purchase from plans alone. Unless you are certain you know precisely who you are dealing with, and you can ensure that all the correct procedures to protect your financial interest have been followed, this can be a hazardous way of doing business. At ESHKERI & GRAU we ensure that any payments made by clients are protected by full legal requirements.
Conducting a survey
Developers and builders of new properties are legally required to have insurance covering any structural or other latent defects in the property. When you buy a new property, we will take steps to ensure the developer has this insurance and, if a problem arises, we can help you get an effective remedy.
However, a new owner is liable for structural defects in older properties not covered by insurance policies or guarantees. In England it is common practice for a structural survey to be conducted by a prospective purchaser even before agreeing on the final purchase price. This is not as commonplace in Spain as in England, but ESHKERI & GRAU strongly advise all our clients to instruct a surveyor ("aparejador") to produce a report dealing, at the very least, with the physical condition of the property. This is particularly important where the property is detached. Surveyors in Spain also advise on the likely cost of any structural or other renovation which may be needed. The final purchase price may depend on how much needs to be spent on the property in order for it to be fit to live in, or you may perhaps want to install a new kitchen and bathroom, extend the living area, or build a swimming pool. A surveyor can also advise on the true market price of the property. Money spent on a surveyor's report is never wasted. We work closely with local surveyors whom we trust and to whom we regularly introduce our clients.
Negotiating the selling price
It has been common practice throughout Spain for many years for a seller to understate the purchase price so as to reduce his tax liability. Prospective purchasers may be told that such practice will reduce their initial outgoings by a saving in stamp duty (see below). However, you should be aware that any saving you make at the beginning is likely to be more than lost when you sell the property, as capital gains tax will have to be paid on the additional profit.
Once you have found a home you want to buy and have settled on the price, you must then calculate your expenses, which should amount to no more than 10% to 12% of the purchase price. ESHKERI & GRAU provide clients with comprehensive and detailed advice about likely expenses before the purchase agreement is settled. Purchase expenses will include the following:
Notary's fees
VAT and Stamp Duty
Land Registry Fees
Local Capital Gains Tax
Legal Fees
Notary's fees
Notaries charge according to a fixed scale. The higher the selling price of the property, the lower the percentage charged. A property with a selling price of €230,000 will attract a notary's fee of €460 plus IVA.
VAT (IVA) and Stamp Duty ("Impuesto sobre Transmisiones Patrimoniales" also known as "ITP")
If you are buying a property which has been bought and sold at least once before, you will be required to pay Stamp Duty. This is based on the purchase price as set out in the Transfer Deed ("Escritura Pública de Compraventa"). The rate varies from 6% to 7% depending on the area in which the property is located (e.g. 7% in Catalonia).
If you are buying a new residential property (i.e. where you are buying a residential property which has never been bought and sold before) you will have to pay VAT (IVA) at 7%. You will also have to pay to "Hacienda" (Spanish Inland Revenue) a tax of 1% of the total purchase price. This tax is known as "Impuesto sobre los Actos Jurídicos Documentados".
Whenever you borrow money to purchase a property you will be liable to pay the "Actos Jurídicos Documentados" tax in the amount of 1% of the total amount of the loan.
If you are buying either a new commercial property, or a property in the course of construction, IVA is payable at the higher rate of 16%. This higher rate of IVA also applies when you buy a garage space which is separate from a house or other premises (e.g. a space in a multi-storey car park).
Land Registry Fees ("Aranceles Registrales")
You will also have to pay fees to the Land Registry ("Registro de la Propiedad") to register the Transfer Deed. This fee must be assessed on a case by case basis. The Land Registry Fee for a purchase of a property with a selling price of €230,000 would be approximately €360 plus IVA. In addition, if you are borrowing money to purchase the property, the Land Registry will charge you a further fee for registration of the lender's charge.
Local Capital Gains Tax ("Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana" - also know as "Plusvalia municipal")
Local capital gains tax is levied by the local Town Hall ("Ayuntamiento"). This is based on the rateable value ("valor catastral") of the land and the buildings built on it. The seller is responsible for paying this tax, but often buyer and seller negotiate over who is to assume this liability.
Legal Fees
Legal costs for property transactions in Spain tend to fluctuate between 1% and 2% of the total purchase price. At ESHKERI & GRAU we do not base our professional fees on the value of the property. Instead we charge an hourly rate in order to keep the cost to our clients at an absolute minimum. We are pleased to provide clients with an estimate of our professional fees in respect of their property purchase as well as the other expenses they are likely to incur.
Signing the Private Contract ("Contrato de Arras")
Once you have found a property which you want to buy and have agreed the price, it is customary, although not essential, to enter into a formal private agreement with the seller (known as a "contrato de arras"). The terms of this private contract set out details like the purchase price, payment of any deposit and a date for completion of the transaction. We will either draft the private contract on the buyer's behalf, or negotiate the terms of a contract provided by the seller.
Once the private agreement is signed by both parties it is customary for the buyer to pay to the seller a deposit (10% is typical). This deposit is not usually refundable if the buyer pulls out. However, if the seller fails to fulfill his part of the contract, he will be liable to pay the buyer damages equivalent to double the amount of the buyer's deposit. If a defaulting seller fails to pay up, we can pursue him for your damages through the Spanish courts.
Because there is no strict legal requirement for a private contract, parties often proceed directly to signing the transfer deed. However, if the buyer needs to arrange finance to complete the transaction, the period between signing the private contract and signing the transfer deed (which can be up to 3 months) gives plenty of time to shop around to find the best mortgage terms.
Signing the Transfer Deed ("Escritura Pública de Compraventa")
The sale and purchase of all property in Spain must be registered at the Land Registry ("Registro de la Propiedad"). The Land Registry maintains details of the property and records financial charges over the property. The Spanish Notary Public ("Notario") prepares the Transfer Deed in accordance with Spanish law. We ensure that the Transfer Deed is drafted in accordance with the intentions of the parties, as reflected in the private contract. It is usual for buyer and seller, together with their lawyers or agents, to meet in the Notary's office to complete the transaction. We handle all matters on behalf of our clients including:
checking the property is in fact registered in the name of the seller without any mortgages or other charges
ensuring any existing mortgages or charges are cleared before completing the transaction
ensuring your property comes to you without liability for "non-resident seller Spanish capital gains tax
completing the purchase on your behalf if you are unable to travel to Spain for the completion meeting. (This requires you to grant us a "specific power of attorney", which we can help you to organise.)
go to top
Paying the purchase expenses and registering the Transfer Deed
Once the parties have signed the Transfer Deed with the Notary and the purchase price has been paid to the seller, the buyer has to pay all the taxes (see above). After that is done, the Transfer Deed can be delivered to the Land Registry and the new owner entered on the Land Register. ESHKERI & GRAU handle payment of all taxes and other charges for our clients.
Spanish Wills
Once you have purchased a property in Spain it is advisable to make a Spanish Will ("Testamento"). The Spanish Will determines who will inherit your property after you die. The process to determine who inherits property after someone's death is lengthy and is likely to be costly. Moreover, it is not you but the legal rules which decide who inherits your property.
ESHKERI & GRAU strongly advise all our non-Spanish clients who own property in Spain to make a Spanish Will. We also advise that a Will should be made according to the law of their country of origin. This guarantees the most tax efficient and cost effective way of dealing with inheritance related matters.
A person who makes a Will is known as a "testator". In Spain the testator signs the Will in front of a Notary, who witnesses it. The general position in Spanish law is that a testator must leave a proportion of his assets to his direct descendants. Under Spanish inheritance law a Will made by a foreign national is partly governed by the law of the country where the testator is a citizen. This is particularly useful for people from the UK, and other countries, where a testator may leave his assets to whomever he chooses. So, where a British person makes a Spanish Will, the Spanish rules are relaxed to allow the testator to choose who should inherit property.
Purchasing a property in Spain typically involves the following stages, although prospective purchasers should take specific advice before entering into any transaction. Click on the headings for further details:
Why use an independent lawyer for Spanish property purchases?
Finding the property
Conducting a survey
Negotiating the selling price
Signing the Private Contract ("Contrato de Arras")
Signing the Transfer Deed ("Escritura Pública de Compraventa")
Paying the purchase expenses & registering the Transfer Deed
Why you should make a Spanish Will
Why use an independent lawyer for Spanish property purchases?
Some people will tell you that you don't need a lawyer to buy a property in Spain. This is true if you truly know what you're doing. For the vast majority of buyers, however, this is dangerous advice. Choosing the right lawyer is important to ensure you meet all Spanish legal requirements, that the property is registered in your name, and that once you own it you don't face any unwelcome surprises such as an outstanding mortgage or development plans for the area which affect your property adversely. By instructing an independent lawyer you ensure you are fully aware of all potential pitfalls - and how to avoid them.
Your first and most important step should be to choose an independent lawyer. Estate agents may encourage you to take advantage of their "free legal service". However, the estate agent is the seller's agent and so will be acting for him, not the buyer. At ESHKERI & GRAU we provide you with an entirely independent service comparable with that which you can expect to receive in the UK. We offer all the legal advice and assistance you need, in fluent English, which avoids the linguistic and cultural problems you are likely to encounter with large numbers of other Spanish lawyers.
Finding the property
The most common way to find property is to consult a number of estate agents. In Spain estate agents typically charge the seller between 5% and 10% of the total sale price. As you may expect, there are a great many estate agents competing for such a high rate of commission. In order to avoid wasting your time it is essential to take advice about the best agents to use for the type of property you are seeking. At ESHKERI & GRAU have extensive local knowledge and can assist you with this important first step.
An alternative to using an estate agent is simply to visit the area where you are seeking a home and look for "se vende" ("for sale") signs. These signs always display a telephone number. If you speak basic Spanish you can usually find out the selling price from one telephone call. Alternatively, ESHKERI & GRAU will be pleased to make the call on your behalf and to negotiate a selling price.
It is also very common to purchase new properties directly from the property developer. The property may have already been built. Alternatively, you may wish to purchase from plans alone. Unless you are certain you know precisely who you are dealing with, and you can ensure that all the correct procedures to protect your financial interest have been followed, this can be a hazardous way of doing business. At ESHKERI & GRAU we ensure that any payments made by clients are protected by full legal requirements.
Conducting a survey
Developers and builders of new properties are legally required to have insurance covering any structural or other latent defects in the property. When you buy a new property, we will take steps to ensure the developer has this insurance and, if a problem arises, we can help you get an effective remedy.
However, a new owner is liable for structural defects in older properties not covered by insurance policies or guarantees. In England it is common practice for a structural survey to be conducted by a prospective purchaser even before agreeing on the final purchase price. This is not as commonplace in Spain as in England, but ESHKERI & GRAU strongly advise all our clients to instruct a surveyor ("aparejador") to produce a report dealing, at the very least, with the physical condition of the property. This is particularly important where the property is detached. Surveyors in Spain also advise on the likely cost of any structural or other renovation which may be needed. The final purchase price may depend on how much needs to be spent on the property in order for it to be fit to live in, or you may perhaps want to install a new kitchen and bathroom, extend the living area, or build a swimming pool. A surveyor can also advise on the true market price of the property. Money spent on a surveyor's report is never wasted. We work closely with local surveyors whom we trust and to whom we regularly introduce our clients.
Negotiating the selling price
It has been common practice throughout Spain for many years for a seller to understate the purchase price so as to reduce his tax liability. Prospective purchasers may be told that such practice will reduce their initial outgoings by a saving in stamp duty (see below). However, you should be aware that any saving you make at the beginning is likely to be more than lost when you sell the property, as capital gains tax will have to be paid on the additional profit.
Once you have found a home you want to buy and have settled on the price, you must then calculate your expenses, which should amount to no more than 10% to 12% of the purchase price. ESHKERI & GRAU provide clients with comprehensive and detailed advice about likely expenses before the purchase agreement is settled. Purchase expenses will include the following:
Notary's fees
VAT and Stamp Duty
Land Registry Fees
Local Capital Gains Tax
Legal Fees
Notary's fees
Notaries charge according to a fixed scale. The higher the selling price of the property, the lower the percentage charged. A property with a selling price of €230,000 will attract a notary's fee of €460 plus IVA.
VAT (IVA) and Stamp Duty ("Impuesto sobre Transmisiones Patrimoniales" also known as "ITP")
If you are buying a property which has been bought and sold at least once before, you will be required to pay Stamp Duty. This is based on the purchase price as set out in the Transfer Deed ("Escritura Pública de Compraventa"). The rate varies from 6% to 7% depending on the area in which the property is located (e.g. 7% in Catalonia).
If you are buying a new residential property (i.e. where you are buying a residential property which has never been bought and sold before) you will have to pay VAT (IVA) at 7%. You will also have to pay to "Hacienda" (Spanish Inland Revenue) a tax of 1% of the total purchase price. This tax is known as "Impuesto sobre los Actos Jurídicos Documentados".
Whenever you borrow money to purchase a property you will be liable to pay the "Actos Jurídicos Documentados" tax in the amount of 1% of the total amount of the loan.
If you are buying either a new commercial property, or a property in the course of construction, IVA is payable at the higher rate of 16%. This higher rate of IVA also applies when you buy a garage space which is separate from a house or other premises (e.g. a space in a multi-storey car park).
Land Registry Fees ("Aranceles Registrales")
You will also have to pay fees to the Land Registry ("Registro de la Propiedad") to register the Transfer Deed. This fee must be assessed on a case by case basis. The Land Registry Fee for a purchase of a property with a selling price of €230,000 would be approximately €360 plus IVA. In addition, if you are borrowing money to purchase the property, the Land Registry will charge you a further fee for registration of the lender's charge.
Local Capital Gains Tax ("Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana" - also know as "Plusvalia municipal")
Local capital gains tax is levied by the local Town Hall ("Ayuntamiento"). This is based on the rateable value ("valor catastral") of the land and the buildings built on it. The seller is responsible for paying this tax, but often buyer and seller negotiate over who is to assume this liability.
Legal Fees
Legal costs for property transactions in Spain tend to fluctuate between 1% and 2% of the total purchase price. At ESHKERI & GRAU we do not base our professional fees on the value of the property. Instead we charge an hourly rate in order to keep the cost to our clients at an absolute minimum. We are pleased to provide clients with an estimate of our professional fees in respect of their property purchase as well as the other expenses they are likely to incur.
Signing the Private Contract ("Contrato de Arras")
Once you have found a property which you want to buy and have agreed the price, it is customary, although not essential, to enter into a formal private agreement with the seller (known as a "contrato de arras"). The terms of this private contract set out details like the purchase price, payment of any deposit and a date for completion of the transaction. We will either draft the private contract on the buyer's behalf, or negotiate the terms of a contract provided by the seller.
Once the private agreement is signed by both parties it is customary for the buyer to pay to the seller a deposit (10% is typical). This deposit is not usually refundable if the buyer pulls out. However, if the seller fails to fulfill his part of the contract, he will be liable to pay the buyer damages equivalent to double the amount of the buyer's deposit. If a defaulting seller fails to pay up, we can pursue him for your damages through the Spanish courts.
Because there is no strict legal requirement for a private contract, parties often proceed directly to signing the transfer deed. However, if the buyer needs to arrange finance to complete the transaction, the period between signing the private contract and signing the transfer deed (which can be up to 3 months) gives plenty of time to shop around to find the best mortgage terms.
Signing the Transfer Deed ("Escritura Pública de Compraventa")
The sale and purchase of all property in Spain must be registered at the Land Registry ("Registro de la Propiedad"). The Land Registry maintains details of the property and records financial charges over the property. The Spanish Notary Public ("Notario") prepares the Transfer Deed in accordance with Spanish law. We ensure that the Transfer Deed is drafted in accordance with the intentions of the parties, as reflected in the private contract. It is usual for buyer and seller, together with their lawyers or agents, to meet in the Notary's office to complete the transaction. We handle all matters on behalf of our clients including:
checking the property is in fact registered in the name of the seller without any mortgages or other charges
ensuring any existing mortgages or charges are cleared before completing the transaction
ensuring your property comes to you without liability for "non-resident seller Spanish capital gains tax
completing the purchase on your behalf if you are unable to travel to Spain for the completion meeting. (This requires you to grant us a "specific power of attorney", which we can help you to organise.)
go to top
Paying the purchase expenses and registering the Transfer Deed
Once the parties have signed the Transfer Deed with the Notary and the purchase price has been paid to the seller, the buyer has to pay all the taxes (see above). After that is done, the Transfer Deed can be delivered to the Land Registry and the new owner entered on the Land Register. ESHKERI & GRAU handle payment of all taxes and other charges for our clients.
Spanish Wills
Once you have purchased a property in Spain it is advisable to make a Spanish Will ("Testamento"). The Spanish Will determines who will inherit your property after you die. The process to determine who inherits property after someone's death is lengthy and is likely to be costly. Moreover, it is not you but the legal rules which decide who inherits your property.
ESHKERI & GRAU strongly advise all our non-Spanish clients who own property in Spain to make a Spanish Will. We also advise that a Will should be made according to the law of their country of origin. This guarantees the most tax efficient and cost effective way of dealing with inheritance related matters.
A person who makes a Will is known as a "testator". In Spain the testator signs the Will in front of a Notary, who witnesses it. The general position in Spanish law is that a testator must leave a proportion of his assets to his direct descendants. Under Spanish inheritance law a Will made by a foreign national is partly governed by the law of the country where the testator is a citizen. This is particularly useful for people from the UK, and other countries, where a testator may leave his assets to whomever he chooses. So, where a British person makes a Spanish Will, the Spanish rules are relaxed to allow the testator to choose who should inherit property.
Eshkeri & Grau Solicitors in Spain Profile
ESHKERI & GRAU is a firm of two partners: Jonathan Eshkeri is an English solicitor, registered in England and Spain and regulated by the Law Society of England and Wales and by the Ilustre Colegio de Abogados de Tarragona. Josep Grau is a Spanish abogado (lawyer) regulated by the Ilustre Colegio de Abogados de Tarragona. The firm is located in Tarragona, a city in the Catalan region of Spain, between Barcelona and Salou. Both Jonathan and Josep live and work in Tarragona. Whatever your reasons for wanting either to own property or to conduct business in Spain, you will want the matter to be hassle free. At Eshkeri & Grau we ensure that you are able to make your plans with complete confidence that you will get what you pay for and will also avoid the unexpected and unwelcome pitfalls often experienced by people unfamiliar with Spain's legal system and business culture.
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