When you are going to buy a property in Spain, it is important that a series of control measures are made that are necessary for a safe purchase . To achieve a successful real estate transaction, it is important to find a serious and knowledgeable real estate agent who can help you find the right property and to hire a Lawyer who will help you legally throughout the transaction until you get the title deed.
NIE number is one of the most important things you should consider when buying a property in Spain, it’s like a Spanish social security number. You need NIE number to be able to register the property in the Land Registry.
Private purchase contract
After the reservation agreement is signed, an investigation must be made on the property to make sure that everything is right, for example, find out who is the owner of the property, if it is registered in the Land Registry, or find out if it is free of debts and mortgages etc. Once the investigation has been completed, it is time to sign the private purchase contract. This contract regulates the terms and conditions that will be in the title deed. When the PPC is signed, a down payment of 10% of the purchase price is usually made and the remaining amount is paid when the title deed is signed at the Notary.
The title deed is signed before the Notary. The notary must verify that the title deed is signed correctly, and check the identity of all persons involved in the transaction. From the day you sign the title deed, you become the new owner of the property.
Costs after purchase
Once the title deed is signed, you must pay all taxes that are added and register it in the Land Registry.
Property tax, is a local tax that all property owners in Spain must pay. It is based on the assessed value.
If you use the property for personal use, you are liable to tax. The ownership of a property in Spain counts as property income and must therefore be taxed (form 210).
If the seller is not resident in Spain, he is obliged to pay a state tax on the capital gain. The buyer deducts 3% from the purchase price which he has to pay , on behalf of the seller, to the tax office (form 211).
If the seller has made a capital gain, he is obliged to pay the difference between the tax and the 3%.
When there is a capital gain on the sale of a property you must pay Capital Gain Tax. This is based on the difference between the price that the current owner paid and the price that the property is sold for today. This tax is paid by the seller, but is withheld by the buyer, the tax is deducted from the purchase price and deposited into the Tax Agency’s account.