Spain is relatively straightforward and will supone no problem as long as the correct steps are followed. Vistamar Homes offers one of the largest property portfolios in the Marbella area, and our property professionals will happily guide you through the purchase process. If you do not already have a lawyer, it is recommended that you engage one to safeguard your interests throughout the purchase. Vistamar Homes does not work with any particular lawyer, but we have worked with many competent professionals in the area and we are happy to recommend one depending on your language preference.

The following is an approximate guide to the purchase process, although this may differ from time to time depending on the particular operation.

Reservation

Once you have decided on a property you want to buy, it is normal procedure in Spain to place a reservation deposit. This can be anything from 3.000 € 10.000 €, depending on the purchase price. This deposit is accompanied by a reservation contract which states the names and identification numbers of the buyer and seller, the agreed sale price and any conditions that have been agreed concerning the purchase. The reservation deposit is normally paid to the estate agent or your lawyer to show good faith. It is recommended to never pay a reservation deposit directly to the owner.

Property Check

At this point your lawyer will begin carrying out the necessary checks on the property with the local land registry to ensure that all the property’s documents are in correct order, that there are no embargos or debts on the property and that the person selling the property is actually the owner.

Private Contract

Once the lawyer is satisfied that everything is in correct order then the buyer and seller will sign a private purchase contract (a compraventa) and the buyer will pay a 10% deposit (less the original reservation deposit). In this contract, the buyer and seller details and identities are stated, along with the agreed sale price and the date for the final transfer of the property from seller to buyer. At this stage, if the buyer decides to withdraw from the purchase they will forfeit their deposit and if the seller withdraws they will be obliged to repay double the deposit amount to the buyer, unless otherwise agreed.

Title Deed

The final stage is when you pay the remainder of the monies due and the Title Deed (“Escritura”) is signed in front of a public Notary. After the deed has been signed your lawyer will register the property in the buyer’s name at the local land registry.

Purchase Costs

When purchasing new property directly from a developer IVA (VAT) is charged on all new properties (properties that have been newly constructed and purchased by the first owner) at a rate of 10% on the purchase price.
When purchasing a re-sale property from a private seller and not a brand new property there is a 7% transfer tax to be paid.

Along with purchasing tax please allow for legal cost including your lawyer involved and notary fees.
We suggest to allow and extra 10% to the purchase price to avoid disappointment or miscalculation.

Other Paperwork required for purchasing a property

Spanish nationals need only their identification (for all persons whose name is going to appear on the title deed).

If you are a non-resident the Spanish Ministry of Interior requires you to obtain a certificate of non-residency, which in turn determines your fiscal number, so that you can sign the title deed. It will also be required later in order to pay taxes. This document is known as an NIE number. As from 1st January 2012 local police stations are not accepting NIE applications through a power of Attorney; clients must now apply for their NIE personally at the police station or at Spanish Consulates / Embassies.

Recommendations

We recommend to open a bank account when commencing a property purchase as this will be needed not only for the purchase, but also to set up direct debits for the utility charges such as electricity and water.
It is also recommended to write a Spanish will. This only has to relate to assets situated within Spain and need not concern assets owned in your country of residence. This will simplify the probate process in the unfortunate event of the death of the property owner and significantly reduce costs and the duration of the process.

Selling property in Marbella, Spain is a relatively straightforward process, but as with buying a property, we recommend that sellers engage the services of a professional lawyer to assist and advise them in the process. Sellers need to be aware of several facts before entering into the process.

The Seller’s Tax Liability

Capital Gains Tax.

The seller will be responsible for the payment of his Capital Gains Tax. This is the tax based on the increase in value of the property from the original purchase date to the date that it was sold on. Capital Gains Tax is currently 21%. Any conveyance costs involved in the buying and selling of the property can be deducted as long as these costs are accompanied by official receipts. Therefore, all purchase taxes, notary fees, legal fees etc can be deducted from the calculations.

Residents are exempt from Capital gains tax if:

• They are 65 or over and have lived in the property for 3 years or more.
• The property is a main residence and the net sale proceeds are reinvested in the purchase of another home within two years.

Plus Valia Tax

Sellers are normally also responsible for paying the Plusvalia Tax although this can sometimes be negotiated to be paid by the buyer. This tax is set by the local authorities and is based on the increase in the value of the land (not the property – the selling price has no effect on the plusvalia tax) from the date the owner acquired the property to the time of the present sale. The local authorities will determine the amount and is calculated according to the rateable value of the property and the number of years that it has been in ownership of the vendor.

Encumbrances

Sellers must also pay the fees for cancellation for any encumbrances on the property such as mortgages, unless otherwise agreed between buyer and seller. If the buyer is intending on purchasing with a mortgage then they might want to consider simply taking over the seller’s original mortgage (being careful to check the terms and conditions), as this will be cheaper than setting up a new mortgage.

Retention

If the seller is a non-resident and has owned the property for less than 10 years, it is important to be aware that the buyer is obliged to withhold 3% of the purchase price and pay this amount directly to the Spanish Tax authorities. This is a way of ensuring that the capital gains tax (CGT) is paid by the vendor and to prevent them from taking the money and not paying their tax bill. After the CGT is calculated, the seller will either receive a refund or be billed for an additional amount depending on the amount of tax that is due. If the buyer does not withhold this amount they will automatically become responsible for the sellers CGT.

Declared Selling Price

In the not too distant past, tax evasion was common in Spain and property transactions were a prime example of how taxes were avoided. Sellers used to declare the sale price at a much lower value than the actual selling price in order to lower the level of capital gains tax that was due. Buyers were complicit in this process as this also lowered the amount of tax due on the purchase.

In the last 10 years this situation has changed dramatically and the Spanish tax authorities have targeted property transactions in particular. If the tax auditors feel that the declared selling price is too low, they can, and have, imposed significant penalties on the seller. Foreign governments in Europe and Scandinavia have been known to share information with the Spanish tax authorities.

Consequently, under-declared values have practically become a thing of the past and we strongly advise our clients not to get involved in this activity.

Our team of Property professionals at Vistamar Homes are experienced and have up-to-date knowledge of the current laws and tax liability. We are very happy to advise any owner choosing to list their property with us. If you would like to speak with one of our professionals about listing your property, or have any questions that are not covered here, do not hesitate to contact us.

Renting property in Marbella with the assistance of our professional rentals department is very easy. Vistamar Homes offers a wide range of properties to rent including villas, apartments, penthouses, townhouses and commercial properties in the entire Marbella area.

Vistamar Homes is one of the most established real estate agents operating in Marbella and has a wealth of experience to ensure that you can rent out or find your ideal rental property in Marbella with the minimum fuss and the highest levels of customer service. The rentals department at Vistamar Homes has been successfully operating for the past 15 years and forms an important part of our property services.

We offer a selection of rental properties in Marbella covering all sizes and styles, from 2 bedroom apartments to 9 bedroom luxury beachside villas. We can guarantee that we will find the ideal rental property for you anywhere in Marbella.