Property for sale Spain

First of all: Are you really sure you want to sell? Do not let some grievances that may pass induce you to take a decision that you may regret in the future. Consider very well the question. Even put on a piece of paper the pro and cons of a sale of your property. Property for sale Spain

If you bought your property at a good price some years ago, or if you have an exceptional property, you may still find a buyer. A visit to the next real estate agent may give you an idea. If he tells you that your property can only be sold if you are willing to take some losses, you should sit down and make some calculations: Can I keep the property for some time more, paying the expenses and taxes and hoping that in the meantime the property market has improved?

1. The sales channels

If you have decided to sell, you have different ways of selling. You can approach a sales agent and ask him to sell the property for you, you can try to advertise in local foreign language publications in Spain or you can advertise in the newspapers in your home country.

If you want to use a sales agent, in Spain or in your home country, make sure that you are not signing any right of exclusivity of sales, or papers with reference to rules or regulations not explicitly mentioned in the agreement. Otherwise you may be forced to pay commissions to the agent even if he do not sell, but you find a buyer yourself. I would also warn against you establishing what you accept to receive, permitting the agent to sell at a higher price and cash the difference. Get the sales commission established from the start and in writing.

If you advertise in a paper in Spain and you are not permanently living in your dwelling, you must arrange for someone you trust to have the keys and being able to show the property to any interested client. Keen buyers may become disinterested if they have to wait for your next visit to Spain. Property for sale Spain

If you advertise in a paper in your home country, you must have a brief information on the property and some good photos to send to or show the interested buyer, together with a copy of your title deed and maybe even a taxation of the value of the property. You should also have investigated how you can travel with the interested buyer to visit the property, or how the buyer can go there alone, and being shown the property by someone who has the key. Do not give the key to anyone you have not known for a long period and you are sure can be trusted.

Property for sale Spain

2. Preparing the property

To be able to sell a property, it should be well maintained. If you have not been in the dwelling for a long time, make sure it is cleaned and aired, that all fittings are functioning, that the eventual garden is attended to, the swimming pool cleaned, and that damaged curtains or furniture be repaired or changed. A small investment in preparing the property may make the difference both in the time needed for the sale as well as the price obtained.

Prepare also the papers. You should have ready to show to any interested buyers copies of your title deed (escritura) and also a "nota simple" from the property register that you are still the owner of the property and that there are no charges on it.

That paper is a very good sales argument.

Moreover you must have the latest receipt for the local rates (Impuesto de Bienes Inmuebles), for electricity, water and the fees for the Community of Owners.

If you are selling the property furnished, you must prepare a complete list of furniture and even photos of the most important parts. A sofa can be many things, a beautiful and valuable leather sofa or a cheap and ugly one. With a photo included in the furniture list, the buyer will feel reassured.

You may also decide to make a taxation of the property. That will make it clear to you what you can ask in price, and it will assist you in convincing a potential buyer. Such a taxation can be done by specialized taxation firms, by a real estate agent, by a surveyor (aparejador) or architect.

Property for sale Spain

3. Price and conditions

Before meeting the first buyer, you must have made a decision as to price and conditions for the sale. We have mentioned the possibility of talking with a local real estate agent to get an idea of the price you can expect, or having a taxation of the value made. We recommend you to establish in your mind two sums:

the asking price that should give room for negotiations with the buyer and include eventual sales commissions, and

the bottom price that is the net you will want to receive for the property, under which you are not willing to sell.

You may fix the price in any currency you prefer. Maybe the best alternative is to do it in the currency of the country where you will be depositing and eventually use the money. If you are British and want to spend the proceeds in UK , you should establish the price in pounds. There are no legal or other obligations forcing you to establish the sales price in another currency. Then the payments to be made in other currencies will have to be calculated at the exchange rate of the day they are being made, so that you can be sure to get the value agreed.

You can as a foreigner sell your Spanish property in any country outside Spain , fix the sales price in foreign currency and receive the money abroad. You can even make a title deed (escritura) to the buyer stating that you have been paid in foreign currency and abroad. In the title deed can be mentioned foreign currency or Euros.

Property for sale Spain

However, keep the following in mind:

* if you use a Spanish general consul outside Spain as a notary, you must yourself see to that the "primera copia" of the deed is brought within 30 days to the corresponding property register in Spain. The consuls do not send the deeds to the property registers as a normal notary would do.

* even if you make the sale and get the money abroad, your fiscal obligations to Spain in connection with the sale do not change.

* if you have a bank certificate for the importation of foreign currency registered in your title deed, or if a previous foreign owner of the same property had one, the new buyer do not need to produce a new bank certificate in his own name to get the new title deed registered. It is only necessary to have a bank certificate registered once per property, as long as it passes in an unbroken chain from foreigner to foreigner. If you have no bank certificate mentioned in your escritura, the reason may be that you bought it from another non-resident foreigner and that you have simply taken over his rights. As long as you as a non-resident foreigner has got your title registered, foreign currency rights must exist, and therefore you can sell abroad.

The Spanish government decided that as from 1 February 1992 , the foreign currency regulations of Spain will be dismantled and capital be allowed to flow freely between Spain and the rest of the world. So, keep in mind: Property for sale Spain

Even if the sum in the original bank certificate of a previous owner should be very low, this is no hindrance for the new buyer to write in a higher value in his new title deed.

We recommend that you sell cash, unless you, as a resident, should want to spread the income from the sale over several years for fiscal reasons. Payment terms make the matter complicated. You should not give title to the property in the buyers name before having received the total sales price. It may also not be wise to give the buyer a key and the right of use of the property before he has paid the total amount. He may move in and stop paying and you must go to court to get him out. On the other side the buyer may not have the full amount available, he need to sell another property or get a loan from the bank. He will want to have some guarantee for the deposit he is paying in the meantime. Property for sale Spain

You should as a vendor insist on getting a non-returnable deposit on signing a private contract of 5-10%, for taking the property off the market. This is normal. If the buyer is able and willing to pay a bigger amount on signing the contract, without this constituting the full price, the solution may be the following: The 5-10% non-returnable deposit is paid to you, while the rest of the money is paid into the clients account of a lawyer or a bank, with clear instructions that the money should be paid out to you as soon as the title deed in the name of the buyer has been signed at the notary's office on payment there of the rest of the total purchasing price. If the buyer do not pay the rest of the money and you for that reason does not make a title deed, the trustee must at the date agreed in the contract repay the money to the buyer, who will then have lost the deposit paid directly to you. Be very careful to give the trustee the correct instructions! Property for sale Spain

Property for sale Spain

4. The contract

To this we add a sales/purchasing contract. We find it a fair contract for vendor and buyer. However, one contract form can not cover all kind of circumstances, so it is only a basis for you and must be adjusted to your particular situation.

We want to draw your attention to the following parts of this contract:

* under "Intervene" is mentioned a company as one of the two intervening parts. If no company intervenes, you just give the same description for the capacity of the second as for the first part. But if a company intervene, the dates on the company must be as complete as indicated in the contract.

* under "Say and Grant" I is asked for a description of the property. This description should be as exact as possible, with the correct size, location and address. Property for sale Spain

* in the fourth stipulation is stated that the vendor will pay the municipal plus-valia tax for the land. This is what is correct, since you as a vendor has calculated the value increase on the land in a higher sales price than your own purchasing price. However, if the buyer and vendor agrees that the buyer shall pay it, the Spanish authorities will accept that. If the tax is not paid, they will always go for the property anyhow. You can find out the amount of the plus-valia in the local Town hall, and if you shall pay it, it can be deducted from the agreed sales price.

* in the seventh stipulation is written that the party breaking the contract will pay all the expenses due to it. This may be more than the deposit you have got from the buyer. But to get the rest, you may have expensive court cases for years and maybe not be able to sell the property to another buyer. Better with the bird in the hand than 10 on the roof! If you should break the contract, because you cannot fulfil or because you have found a buyer paying a higher price, you will have to repay to the buyer twice the deposit he has paid you. If the sale should not be made as foreseen in the contract, it is important at once to get a statement in writing from the buyer that he accepts that the contract is cancelled and that he has no further demands on the property. Without a proper letter of cancellation, you may not be able to sell the property to another buyer, without going to court. Property for sale Spain

* in the eight stipulation is normal to mention the courts where the property is situated, but if the buyer is from the same country as you and the transaction is taking place in your country, you may take out the phrase whereby you "waive your own jurisdiction".

Property for sale Spain

5. Legal and fiscal obligations

The fiscal obligations for a foreigner selling his property in Spain are the following:

* make sure that the transfer taxes on the new title deed and the municipal plus-valia tax is being paid.

* pay the local rates on the property up to the date of transfer of the property.

* payment of capital gains taxes on the sale. We have explained this in detail in the chapter on Capital Gains Taxes in this information.

Your legal obligations is mainly to give a clean title to the new buyer and then to inform the Townhall, the bank, the electricity company, the water board and your fiscal representative in Spain that you no longer has any property. The new buyer should be advised to present himself instead. Property for sale Spain

Furthermore you must know about what is said in the new Ley de Tasas on the value declared in new escrituras.

The law states that in any new escritura must be declared the real market value, and provides sanctions if they find that a value of more than 20% less than the market value has been declared.

What is the market value? Not necessarily your sales price, since you can sell above or below the market value. The best way is to make a valuation of the property value. If you then declare not more than 20% less than that value, you should be on the safe side.

Property for sale Spain

6.Change of residency

If you are a resident in Spain , and do not intend to buy another property here after you sell your present home, it may be advisable to give up your residency before selling the property. You can do this by bringing your residence permit to the next police station with a foreigners department, and get a receipt that you have returned it. You are then a non-resident and can act as that. You may not be permitted to take up the residency again before 3 years have passed. Property for sale Spain

Before taking the decision to sell up and return to your home country, you should investigate carefully the following points:

* will you be covered by your national health services when coming back?

* how and when will it be best for you to change to the tax system of your home country?

* how to invest the proceeds of the sale of the property in Spain to get maximum benefits from your capital?

DO YOU NEED A LAWYER TO SELL YOUR PROPERTY IN SPAIN ? IF YOU HAVE TO KEEP ALL EXPENSES AS LOW AS POSSIBLE, YOU SHOULD BE ABLE TO DO A SIMPLE AND STRAIGHTFORWARD SALE ON YOUR OWN. BUT IF YOU HAVE A VALUABLE PROPERTY, A COMPLICATED SITUATION OR A DIFFICULT BUYER, IT IS ALWAYS BETTER TO HAVE THE ASSISTANCE OF A LAWYER.

FIND A GOOD ONE IN SPAIN SPEAKING FOREIGN LANGUAGES, OR A LAWYER IN YOUR OWN COUNTRY CONVERSANT WITH SPANISH LAW AND PROPERTY TRANSACTIONS. WE CAN GIVE FURTHER INFORMATION.

7. Selling your property without moving out  

The concept is not new, but for some time we have not seen any companies in Spain offering this: Property for sale Spain

That you, as an elderly owner, sell the outright property ownership rights, but keep the right of occupancy for life.

Or that you buy the right of living for life in a dwelling. In the following we shall explain the first of the two alternatives:

Selling the ownership rights to your dwelling Property for sale Spain

Very briefly: If you are more than 70 years of age and possess a dwelling free of all charges, you may contact the company working in this field. They will send an authorized surveyor to give an appraisal of the value of your property. Then that value is divided in two parts, the value of the ownership rights, and the value of living in the dwelling for life. This last value depends on your age, and is established in the Law on Private Property Sales Tax (ITP).

If the owner and the company come to an agreement, a title deed is signed in front of a notary preserving the right of the owner (and his spouse) to live there for the rest of his life (but without the right to rent out the dwelling to a third party or use it as a guarantee for a mortgage). As payment for the ownership rights, the purchasing company is obliged in the title deed to pay a life long monthly rent, or a rent for a limited period of time (but even then the use of the dwelling remains with you for life).Property for sale Spain

You will get a bank guarantee for 3 years for the payment of the rent, a guarantee renewed annually.

You will pay for the services, the insurance for the content of the dwelling and the community of owners, while the holder of the ownership rights pays the local property taxes (IBI), extraordinary payments to the community of owners and the insurance for the property.

Percentages and taxation Property for sale Spain

In a division of the value between ownership rights and right of use (derecho de habitacion), the tables in the law are the following:

Age of user Value of habitation right Value of ownership

Less than 20 52,50 % 47,50 %

From 20 to 21 years 51,75 48,25

From 21 to 22 years 51 49

80 or over 7,5 92,5

There are also interesting tax advantages with this model. If you are between 50 and 59 years, 65% of the monthly payment to you from the purchasing company will be exempt from taxes. From 60 to 69 years, the exemption rises to 75% and from above 69 years the exemption is 80%.

How to proceed? Property for sale Spain

Of course, with great caution. But if you contact the company Nudarsis over their web-page www.nudarsis.com you will get further details and eventually an offer for your dwelling. Use a lawyer for this type of contract.

Property for sale Spain

8. Model for sales/purchasing contract

In.....at.....of.....200.

APPEAR

On one side.............................. being of age, married/single/divorced, profession...................... nationality......................... domiciled at................... with address.................. passport number................ issued at...................... on the......................

On the other side......................... (same kind of particulars as above)

INTERVENE

The first in his/her name and right (and/or in the representation of...........................................).

The second in the representation of the Mercantile Company............. incorporated in............. on the............, registered with the number.................... in........................., by Power of Attorney granted to him by the Company in............... on.............., and he manifests that it has not been cancelled or modified totally or in part.

They recognise each other with the necessary legal capacity to contract and oblige themselves and freely and spontaneously

SAY AND GRANT

I. That ............................................ is the owner of the following property (description).

TITLE: It belongs to ......................... by virtue of a sales-purchase deed issued in his/her favour by .................... on the ................... executed in front of the Notary................................ with number ........................... of his protocol.

INSCRIPTION: Volume.............. book............. folio................. finca.................. inscription.......... section................ of the Property Register of .................................

CHARGES: Free of any mortgages, encumbrances, charges, tenants, occupants, lettings, lessees or holders.

II. That both parties having agreed on the purchase/sale of the above mentioned property, they make this act in accordance with the following

STIPULATIONS

FIRST. ................... sells and transfers and .......................... buys and acquires, in the capacity that they intervene, the property described in the antecedent I of this contract, free of mortgages, charges, encumbrances, tenants, occupants, lettings, lessees or holders, and with all its rights and uses.

SECOND: The price agreed for the above mentioned purchase is.........................

THIRD: The form of payment of the agreed price is as follows:

a/ .......................... that in this act.................... hands over to................... who receives it, being the present document receipt of the above mentioned figure.

b/ The balance, that is the amount of ....................... will be paid by the buyer to the vendor when the latter signs with him, or with the physical or legal person or persons that he will decide, the corresponding deed of sales/purchase in front of the Notary. The execution of such deed should take place before the .................. of 199.

FOURTH: All expenses corresponding to the execution of the public deed will be on the buyers account, except the plus-valia tax which will be on the account of the vendor.

FIFTH: The vendor oblige himself to hand over the property object of this contract in perfect condition for its use and up to date with the payment of all kinds of taxes and duties, as well as with the payment of the community expenses and free of lessees and tenants.

SIXTH: All expenses produced before the execution of the sales/purchase deed will be on the vendors account even if the receipts were drawn after the date of the execution of the deed. To effect this, the buyer will retain in deposit the amount of................................ for a period of six months after the execution of the public deed to pay any outstanding bills on the property bought. After that period of time the buyer will hand to the vendor whatever balance of the deposit remains.

SEVENTH: All expenses originating from the breach of contract will be paid by the party who is in breach of contract, including the liquidation of taxes on this contract and the fees of Solicitors and Barristers, even if their intervention is not mandatory.

EIGHT: The appearing parties, waiving their own jurisdiction, submit themselves to the Courts and Tribunals of..................... for the resolution of any questions which could arise in the interpretation of the clauses of the present sales/purchase contract.

Both parties read this document, find it according to their will, ratifying its content, signing it in duplicate, but with only one effect, in the place and on the date above mentioned.

Vendor Buyer

Property for sale Spain

9. Getting rid of a servitude Property for sale Spain

Recently we were asked by a member who wanted to purchase a property to read the purchase contract and any other documents provided by the real estate agent. We asked the agent to get hold of and send us a copy of the 'nota simple' from the registry. We got four pages of closely-written legal Spanish, that we worked our way through. And there was the short sentence: 'Afecta a servidumbres' (affected by 'servitudes')! We phoned the real estate agent and asked what the 'servitudes' were, and he answered that he had not noticed this, did not know what it meant, but promised to go back to the property register to find out.

We are well aware that this reference may be only to the private road passing along the side of the property, or perhaps a water channel that previously had crossed the land and had now fallen into disuse. We cannot, however, exclude the possibility that the reference was to the main property that this piece of land had been taken from and does not affect the property of our member at all. Property for sale Spain

But we have also had examples on registered escrituras without any mention of 'servitudes' where the owner of nearby land demanded right of way across the plot of our member, since a 'servitude' in the form of right of way existed in the property register, but had been forgotten in connection with the registration of the escritura of our member.

If you have a 'servitude' mentioned in your escritura, or if you know that such a 'servitude' exists, even if it is not mentioned, you should try to get rid of it.

Property for sale Spain

'Predio dominante - predio sirviente'

First, we must acquaint our members with some Spanish expressions in connection with 'servitudes'. 'Predio dominante' is the property that the 'servitude' serves; 'predio sirviente' is the property serving. 'Servidumbres continuas' are those that are in perpetuity; 'discontinuas' are those that are used only at intervals. 'Aparentes' are ones that can be clearly discerned from exterior signs; 'no aparentes' those that cannot be noticed. A positive 'servitude' is where the owners of the 'predio sirviente' are obliged to do something, or not do something, and a negative 'servitude' is one where the owners of the 'predio sirviente' are prohibited from doing something that otherwise would be permissable.

'Servitudes' can be imposed by law, by the courts or by agreement between owners of property. Property for sale Spain

A servitude can be cancelled for various reasons:

- when the same person becomes the owner of 'predio dominante' and 'predio sirviente',

- by not being used for 20 years, Property for sale Spain

- when the state of the properties does not make it possible to use the 'servitude' anymore,

- because the 'servitude' only lasts for a certain period of time,

- because the 'predio dominante' cancels the 'servitude',

- because the owners make an agreement to cancel the 'servitude'.

Property for sale Spain

10. Cancelling a 'servitude'

If you have a 'servitude' on your property, and the 'predio dominante' agrees to cancel it, you should at once make a contract with him about this. The best thing is to bring him in front of a notary who will draw up a new escritura. The second best thing is a private agreement. Here is a model in Spanish for an agreement on lifting a 'servitude', first the Spanish original and then a rough translation to English:

'En....a...de...de mil novecientos noventa y.....

REUNIDOS Property for sale Spain

De una parte Sr. A (propietario de predio dominante)

Y de otra parte Sr. B (propietario de predio sirviente)

Ambas partes se reconocen la mutua capacidad legal para la firma del presente contrato, y actuando en nombre propio de su libre y espontánea voluntad, formalizan las siguientes:

MANIFESTACIONES

I. Que Sr. A es propietario de la finca sita en....y que linda en su parte norte con la finca propiedad de Sr. B

II. Que desde tiempo inmemorial existe una servidumbre de paso por la finca de Sr. B a favor de la finca de Sr. A.

III. Que dicha servidumbre significa un camino de unos ....metros de ancho por unos....de largo.

IV. Que Sr. A no está interesado en el cultivo de la finca de su propiedad y por ello está dispuesto a renunciar a la servidumbre, recuperando Sr. B la franja de terreno dedicado a paso.

V. Que Sr. B acepta la renuncia en las condiciones que luego se establecerán.

Por todo ello, de su libre y espontánea voluntad, formalizan el presente contrato de renuncia que se regirá en virtud de lo establecido en los siguientes:

CLAUSULAS

Primero - Sr. A renuncia en su calidad de propietario del predio dominante a la servidumbre de paso que posee sobre la finca propiedad de Sr. B, aceptando Sr. B la renuncia.

Segundo - Sr. B podrá destinar la franja de terreno recuperada a los fines que considere convenientes. Property for sale Spain

Tercero - La presente renuncia es por carácter indefinido.

Cuarto - En contraprestación a la renuncia, Sr. B satisface a Sr. A, quien la recibe a su entera satisfacción, la cantidad de .....Euros, sirviendo la firma del presente contrato de la más eficaz carta de pago.

Quinto - Sr. A se compromete a comparece ante el Notario que se indique el dai y hora que se le diga a fin de proceder a elevar a escritura publica el contenido de este contrato, corriendo todos los gastos que ello signifique a cargo de Sr. B.

Sexto - Ambas partes, con renuncia de su fuero propio si lo tuvieren, se somenten expresamente a los Juzgados y Tribunales de.....para cualquier divergencia sobre del presente contrato.

Property for sale Spain

And here the rough translation:

In....on......

ASSEMBLED

On one side Mr. A,

and on the other side Mr. B.

Both parts recognize each other's legal capacity to sign the present contract, and acting in their own name and by free and spontaneous will make the following:

DECLARATIONS

I - That Mr. A is the owner of the property situated in...... and that borders on its northern part the property of Mr. B.

II - That from time immemorial a 'servitude' for right of way has existed over the property of Mr. B in favour of the land of Mr. A.

III- That this 'servitude' signifies a path .....meters wide and .....meters long.

IV - That Mr. A is no longer interested in cultivating his land and agrees to cancel the 'servitude', so that Mr. B can recover the land used as a pathway.

V - That Mr. B accepts this cancellation with the conditions spelled out below.

Because of this, and by free and spontaneous decision, they enter into a contract of cancellation based on the following

CONDITIONS Property for sale Spain

First - That Mr. A yields the 'servitude' of passage, in his capacity as owner of the land, situated on the land of Mr. B , and Mr. B accepts this.

Second - That Mr. B may use the land recovered for any purpose he considers convenient.

Third - The present repudiation is of indefinite character.

Fourth - As payment for the repudiation, Mr. B gives Mr. A, who receives it, the sum of .....Euros, this contract being a receipt for the money.

Fifth - Mr. A commits himself to appearing before a Notary on the day and hour indicated to him, to convert the content of this contract to a public deed, with Mr. B paying all the costs this may involve. Property for sale Spain

Sixth - Both parties renounce their own jurisdiction and submit themselves explicitly to the courts of .....for any differences in the interpretation of this contract. Property for sale Spain