We are happy to put you in touch with respected local solicitors, Martínez-Abarca and Muñoz

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A good solicitor provides an absolutely essential service

Please use toggles below to view information sections about property ownership in Spain. As mentioned above, we strongly recommend the use of a good solicitor … Buying or selling a property can be one of the most important transactions you will ever make and it demands skilful handling.

Your appointed solicitors / lawyers will manage the entire conveyancing process for you with full assistance when buying either ‘new-build’ property or a ‘resale’ property …

Martínez-Abarca and Muñoz (MAM) fully understands the difficulties that most foreign buyers face when purchasing a property in Spain. Not only are there language barriers to deal with, the paperwork is difficult to interpret, and the legal system itself often seems impossible to understand.

Whether you are buying a new-build property or a resale, Martínez-Abarca and Muñoz Solicitors (MAM) will make sure that there are no unpleasant surprises, as they take care of everything, from your preliminary searches on Title, right through to final completion. They will then gather together all the interested parties to seal the transfer.

Importantly, they also make sure that your property is freehold by carrying out necessary searches at the Land Registry and confirm that the first occupancy certificate (Licencia de Primera Ocupación) has been duly issued by the Town Council. It is also important to ensure that there are no unpaid Council Tax or utility bills outstanding for the property, or community fees, that could transfer with the property you are purchasing, and hit your own pocket!

On completion, Spanish Law requires all parties to attend signature of the Title Deed together at the Notary’s Office. If you can be there, so much the better. However, if you prefer, MAM can prepare a Power of Attorney for you to sign, either in Spain or in your home country, and can complete this transaction on your behalf. Martínez-Abarca and Muñoz Solicitors believe it is vitally important to safeguard purchasers AFTER completion, by making sure that there are no loose ends, by offering a comprehensive After-Sales service which covers:

– Payment of any Transfer Tax or Duty Stamp
– Registration of the Deeds
– Switching of all utilities and setting up direct-debit payment mandates.

Please feel free to browse through the other toggles in this section, which tackle both the serious and enjoyable aspects.

A good solicitor is absolutely essential. Buying a house is definitely NOT an easy DIY task.

There are some seemingly obvious things that need to be meticulously checked before signing for the purchase of a house in Spain. Below is a list of the most basic information that should be obtained before signing:

– Check that the seller is ‘actually’ the owner
– Check the state of charges and encumbrances on the house
– Check the current and previous payments of the real estate tax (IBI)
– Check the payment of community fees

Martínez-Abarca and Muñoz Solicitors take care of all these details for you, in your own language.

A good solicitor is absolutely essential. Buying a house is definitely NOT an easy DIY task.

The procedure for completing the purchase of property in Spain may seem quite complex at times, which is the very reason that you should seek expert guidance.

DEPOSIT:

In the first instance, the buyer signs a private contract establishing the property being bought, the price, the form of payment and the completion date. This document is signed by all parties without the intervention of a Notary. The parties are obliged to fulfill it but it is not valid in relation to third parties. It is usual to pay a percentage of the purchase price as a deposit.

NIE NUMBER:

This is known as FOREIGNERS IDENTIFICATION NUMBER. It is NOT a social security number, but an identification number for tax purposes. It is compulsory for all foreigners to obtain one when they have properties/interests in Spain. This number never changes, even if the person buys and sells many different properties. In the event of the property owner selling up and moving out of Spain, that number will remain as theirs, regardless of the number of years spent away from Spain.

THE SIGNATURE OF ANY TITLE DEED IS NOT POSSIBLE UNLESS THE NIE IS PRESENTED TO THE NOTARY.

COMPLETION:

When the time comes to complete your purchase, the Title Deed (Escritura) is signed before a Public Notary. IT IS STRONGLY RECOMMENDED YOU USE THE SERVICES OF A SOLICITOR TO MAKE SURE EVERYTHING IS IN ORDER. Your solicitor will attend the notary with you, or in the event you cannot be present in Spain, they will represent you by using a POWER OF ATTORNEY.

REGISTERING OF TITLE DEED:

Your solicitor will take care of paying the transmission tax and will ensure that the property is duly registered in your name. For more information, see item corresponding to taxation and cost. The solicitor will also take care of setting up all utility contracts for your property.

A good solicitor is absolutely essential. Buying a house is definitely NOT A DIY task.

WHEN YOU BUY A PROPERTY

There are legal fees and taxes to pay on the transfer of a property.

– There are fees which need to be paid to the Public Notary and the Land Registry.
– The tax to be paid depends on which type of property is being purchased ie. New build or resale:

Purchase of a new property:
– VAT (Value Added Tax) is 10% as of 1st January 2013.
– A.J.D. (Stamp Duties) this tax is in addition to the VAT above, calculated at 1% of declared value.

Purchase of a resale property:
– I.T.P. Transfer Tax is 7% of declared value of the property.

**A good rule of thumb when buying a property is to allow at least 10% on top of the asked price to cover taxes and costs you must pay, and solicitor’s fees.

WHEN YOU HAVE BECOME THE OWNER

As a non-resident owner of a property in Spain please be aware that you will be obliged to pay certain taxes in this country. These taxes are due in any case, irrespective of whether the property is used intensively or only occasionally, or even if the property is kept empty.

Income Tax (I.R.P.F.)

This tax is around 0.15% of the value of the property, and is paid annually, corresponding to the former natural calendar year. If your property has a cadastral value of 100,000 Euros, then the payable amount would be about 150 Euros yearly.

Local tax on real estate (I.B.I.)

This is a direct tax based on the value of the house. It is known as LOCAL RATES, COUNCIL TAX or IBI (and SUMA BILL in the Alicante Area). All these names refer to the same thing. Each Town Council determines the percentage to be applied to the cadaster value of the property. Every year the value of the tax is increased by applying the percentage given by the Government in the Nation Budget act. This is also an annual tax and for this it is strongly recommended to set up a direct debit.

A good solicitor is absolutely essential. Buying a house is definitely NOT A DIY task.

MAKING A SPANISH WILL

Making a Spanish Will, although not compulsory, is strongly advised. To draw up a will in Spain, covering only Spanish assets, makes the whole procedure much easier, less expensive and less stressful for the beneficiaries. All Wills in Spain are registered in one central Registry, which makes it easy to apply for a certificate in the event of having to find out what someone’s ‘Last Will and Testament’ entails. This tells the person where the will was actually signed and can be obtained within a few days. The system is simple and straightforward, so why not take advantage of it!

APPOINTING A FISCAL REPRESENTATIVE

We strongly advise you to use the services of a local solicitor, who can take care of the payment of your taxes in Spain AND keep you informed of any essential changes in the law which may affect your interest. Your solicitor can also assist you in sorting out any hiccups related to your Spanish property if you are not in the country (i.e. electricity problems, or perhaps letters that you do not understand…). Martínez-Abarca and Muñoz Solicitors can help you with all your needs for fiscal representation.

A good solicitor is absolutely essential. Buying a house is definitely NOT A DIY task.

When several people ‘jointly’ own a property in shares, if the parties agree to remove their names from the Deeds in order to keep the property in just ONE name, it is necessary to sign a new title deed. The best way to do this is by making a Dissolution of Community/Joint Ownership (as the Tax liability is lower than what it is for purchasing a Resale or a Donation tax). In dissolution of community, the owner keeping the property compensates the people getting out of the Deeds for the net value of their particular share. To calculate the net value of each share you need to know the value of the house (usually the value in the former Deed of Purchase), to discount any holds (mortgages, etc…) to split the balance between all shareholders.

To complete this transaction ALL the current owners must sign the dissolution Deed, so if any of the parties are not in, or cannot get to, Spain the Solicitors can prepare a PoA which can be signed in your country before a local notary public. Current tariff fees need to be requested from your solicitor, and will usually include the following services:

– Coordinating everything for completion at the Notary
– Payment of corresponding taxes and registration of the new title deed
– Cancellation of direct debits/setting up new standing orders for utilities

As for taxation, there will be a 1.2 – 1.5% STAMP DUTY on the total value of the property.

A good solicitor is absolutely essential. Buying a house is definitely NOT A DIY task.

People usually think it is not necessary to involve a solicitor when selling. Don’t risk it! Your solicitor will ensure that you avoid any last minute hiccups that could ruin your sale. They will also ensure that all your tax obligations are correctly fulfilled.
See below a brief explanation of the most important topics that should be taken into account:

1. Details of the sale:

The seller needs to inform their solicitor if the property is being sold through an estate agent or if it is a direct sale with the buyers. If required a sales contract can be prepared in order to receive a down payment.

A copy of the Deed of the house will need to be handed to your solicitor, including contact details of ALL other parties involved, together with the latest bills for water, electricity, local rates (IBI/Suma), community fees and rubbish collection.

If there is a mortgage on the property they will also need your bank contact details. Coordination of the cancellation of the existing mortgage is usually included in their fees.

Finally your solicitor will need you to confirm the sale price you are asking and an estimated completion date.

2. Completion

Be aware that all owners are obliged to sign the Deed of sale of the property. In order to complete this you can sign the Deed in Spain, or your solicitor can act on your behalf via Power of Attorney. If you are unable to be in Spain, we can prepare a PoA for you to sign at home.

3. Fees, Expenses and Capital Gains Tax

Please contact your solicitor for the current tariff of fees.
MAM fees include the following services:

• Coordinating all parties for completion at the Notary
• Cancellation of any existing mortgages
• Payment of your plusvalia tax
• Calculation and serving your capital gains tax return
• Cancellation of direct debits

As the vendor, you should be aware that you are liable for the payment of PLUSVALIA TAX to the Town Hall where the property is located. This is not a fixed tax so we need to obtain a pre-liquidation from the Town Hall. We will need a copy of your last local rates receipt.

MAM will make all the necessary searches to see if the utilities bills are up to date and highlight any debt. They then withhold the necessary funds on completion to cover any such bills.

Please note that the seller is also liable to pay CAPITAL GAINS TAX from the sale of real estate property. The capital gains tax rate is 21% on the profit of the sale. In simple terms, the taxable profit is the difference between the transfer value and the acquisition value.

If the vendor is a non-resident in Spain the buyer is legally obliged to set aside and deposit 3% OF THE SALE PRICE with the Spanish Public Treasury on completion. This is retained by the Treasury until your Capital Gains Tax liability has been settled.

For the seller, this retention acts as a payment on account of capital gains tax arising from the transaction. Should the amount withheld be greater than the tax liability, the seller is entitled to a refund of the difference. If the amount is lower, the seller is obliged to pay the outstanding capital gains tax.

This tax computation is complex, and quality professional advice is absolutely essential from the outset, in order to get it right. Your solicitor will help you and in many cases assist you to save what could well be a considerable amount – often significantly more than their fees!

Be aware that in order to receive the money back from the Inland Revenue the vendor must be up to date on payment of his/her past non-resident income tax. Currently, the Inland Revenue is taking around 6 / 8 months to return the money.

Finally, when your solicitor receives all the requested details about the sale, a breakdown of payments is sent to the vendor so they have a clear budget of what the sale proceeds are going to be.

A good solicitor is absolutely essential. Buying a house is definitely NOT A DIY task.

Group Uno and its associated companies can recommend the legal services offered by Martínez-Abarca and Muñoz, having worked with the company for the best part of 10 years. We do not insist on any client using their services, as you are free to use any law / solicitor firm in the area.

Martínez-Abarca and Muñoz Solicitors are a well-known professional legal firm headed by the directors, Mrs Cristina Muñoz and Mr José María Martínez-Abarca, both solicitors and members of the Bar Association.

The firm is a multicultural place where English, German, French and Norwegian is fluently spoken. The company was formed in 1991 and have offices in Costa Blanca and in Vera (Costa de Almeria).