A Comfortable Approach To Property Purchase In Spain
Property Care International (PCI) has been operating from Pals since 1990 and has considerable experience in dealing with all aspects of non-resident property ownership. We pride ourselves on offering a unique and complete management service for our clients - we will help you buy your property, we deal with all aspects of property ownership – including private rental management, pool and garden services, repairs and restorations, overseeing building work, insurance, payment of utility and other bills, preparing your annual tax declarations etc.

Please find below a few notes about buying property in this area:
Finding your property
Making an offer
Once a price has been agreed
The private contract states
Mortgages
Escritura – What it is and the process
Land Registry
Costs - Purchaser
Additional costs (please see our price list)
On going costs
NIE
Lawyers
Rentals
Sales Price list 2005

Finding your property

• We will help you find your ideal property – either a holiday home, an investment property suitable for rental or a property to live in for all or part of the year.
• If we do not have a suitable property on our books then we offer a property search service.
• Should you find a property via another source, we will be happy to guide you through the purchase process from the initial search to the final signing with a notary.

Making an offer

• This is much the same as any other country – you can make an offer below the asking price, however it might not be accepted.
• It should be understood that it is not unusual for a vendor to ask for some payment of the purchase price to be made in cash. This is common practice and few sales are completed with out this taking place – however you should fully understand all the possible tax consequences of such a transaction (please see below).

Once a price has been agreed

• PCI shall prepare a private contract between you and the vendor.
• To prepare this contract we shall complete a legal search on the property – to ensure that the property is free of liens and debts. It would also show if there is a mortgage on the property.

The private contract states:

• The agreed full price, both parties' details, the details of the property (including any liens, debts or mortgages) and a date at which time the public (Escritura) must be completed.
• Both parties (or their representatives) sign this document and at this point it is binding.
• At this stage the purchaser pays a deposit to the vendor (normally 10%).
• If the purchaser does not complete this signed contract then they loose the deposit.
• If the vendor does not complete this contract then they must pay back double the deposit amount.

Mortgages

• If a mortgage exists on a property it may be beneficial for the purchaser to take it over.
• If you wish to have a new mortgage on a property we can organize this for you –but you should consider the costs involved to obtain a new mortgage, approx. 3-4% of the amount borrowed.
• The current mortgage rate is approx 3,5% for the first year – fixed.
• If you are a non-resident you should be able to borrow approx. 60-70% of the value of the property.

Escritura – What it is and the process

• This is the public document of the sale transaction – in effect the title deed
• The signing of this document takes place at an agreed date and time at a public notaries office – there are notaries in most towns (e.g. Begur, Torroella and Palafrugell).
• We shall accompany you to the notary's office and offer translation services.
• Both the purchaser and vendor must be present – or legally represented by Power of Attorney.
• The notary will also complete a legal search on the property to ascertain ownership, liens, mortgages etc.
• Checks are made and certificates presented to confirm that all local taxes (IBI) and community fees have been paid up to date.
• If there is an existing mortgage, which is not being taken over by the purchaser, it is at this time that the mortgage will be cancelled by the notary (costs to the vendor).
• If there is a new mortgage then this will also be completed in front of the notary (costs to the purchaser)
• Details of the property, both parties, payment details, tax retentions etc. are read out and confirmed by the notary and those present.
• Both parties sign the Escritura – keys and money are exchanged.

Land Registry

• The new Escritura is now sent to the land registry to show that the property has been sold.

Costs - Purchaser

• To buy a property, in Catalonia, there is a 7% transmission tax (for new properties it is 7% IVA plus 0,5% tax) to pay based on the Escritura price – this is paid at the time of the sale.
• You will also pay the legal fees for the transaction – i.e. the notary and the land registry (This is on a sliding scale but for most purchases Approx. 1200 – 1500 Euros is sufficient).

Additional costs (please see our price list):

• To change name/bank details etc. for utility and town hall bills
• To complete forms and pay 7% tax
• To act with Power of attorney
• To act on your behalf as purchase agent i.e. you have sourced the property via a third party

On going costs:

• Community fees, IBI and rubbish removal (local town hall taxes)
• Insurance, Utility bills, Annual Tax declarations
• Maintenance of garden/pool (if applicable)
• Management fees (if required)

NIE

To purchase a property in Spain you should have an NIE, which is a tax registration number. You should have a notarized version of your passport made and then complete the necessary forms – which we can supply to you.

Lawyers

It has not been the custom to use a lawyer in Spain to oversee a sale, as the agent will do the conveyancing and then the notary checks the major points at the time of signing the Escritura. For a “normal” purchase of a resale property, with out any complications this is still true however, when dealing with a new or off the plans purchase then many purchasers are now more inclined to use a lawyer to oversee the sale. If you decide to use a UK based lawyer (that is not one of the recognized firms specializing in Spain) then we may make a charge to cover the extra time required to liaise with them.

Rental

• If you wish to rent your property via a bonded holiday company we can recommend PCI Holidays that are based in the UK and specialize in renting properties in this area.
• If you wish to rent your property direct then we can help with our rental management service.

Finally

We hope that you find this document helpful as an introduction to buying in Spain but please do remember that it is intended as a guide and should you have any queries or questions we shall be happy to help.

Sales Price list:

NIE - your fiscal number, necessary for every legal transaction, includes trips to Girona	€36.75
Fiscal Registration – once NIE has been obtained to register it at the Tax office.	€30
Fiscal stickers - to obtain fiscal stickers for tax returns etc.	€8
Tax Declarations - Renta and Patrimonio, these should be paid by every owner.	€89.25
Completing sales or purchase paperwork - when PCI is not the agent - including preparing Escrituras, tax rentention, changing names for water, electricity, town hall etc.	€1200
Acting as purchase or sales representative (power of attorney)	€150
New owners - Changing names/bank details for water, electricity, IBI etc.	€75
New owners – Completion and payment of transmission tax &/or tax rentention	€75
Sales rentention - reclaiming 5% tax retention on a property sale	€300