Selling a property in Spain
If you would like to understand how to sell a property in Murcia Region (and Spain), you are in the right place. With this post our Solicitors will try to explain you the steps and the most critical issues when facing a sale. Contact us if you have any question or would like a quote for our conveyancing services, without any compromise.
The deposit agreement
If you accept an offer from a prospective buyer, the first step will be to sign the deposit agreement and discuss who is going to hold the deposit paid.
Usually, the Real Estate Agent drafts the deposit agreement and both parties sign as soon as possible, to avoid risks for any party. This agreement is a brief document, sometimes drafted without the property paperwork available, and outlines the property details and conditions for the sale, such as:
· Sold as seen
· Price
· Deadline to complete
· Land registry details, cadastral reference, etc.
· Buyers and Sellers details
· Penalties, in case of cancellation
Private purchase agreement
This agreement is a much more elaborate document and the buyer Solicitor will draft it after reviewing all the paperwork. The purpose of this document is to go into details about the terms of the deal and the property details, for example:
· An inventory might be part of it and signed by the parties.
· A specific day, or new deadline, to complete can be negotiated between the parties.
· If there are unlicensed works, Solicitors will find a solution.
· Purchase retentions.
· Any other issue that might arise.
At the Notary
This is D day, completion. In Spain, every property sale must be signed before a Public Notary, to gain access to the Land Registry. This system supplies guarantees and safeties for both, buyer and seller.
At the Notary payment is exchange for the keys. A banker’s draft it is the most common method of payment, but a special kind of bank transfer via the Central Bank might also be acceptable.
It is essential to review the deeds, to make sure everything agreed is in there. Your Solicitor might act on your behalf via a Power of Attorney, but if you would like to be there your Solicitor will help you as translator, explaining everything.
This appointment with the Notary might take from one hour to four or five, it depends if everything has been properly prepared and arranged and if there are banks involved. The more parties involved, the longer it takes.
Land Registry and Taxes
After completion at the Notary, taxes must be paid. As a non-resident seller there are two taxes:
· 3% retention: the buyer must keep this amount and send it to the Tax Agency, is mandatory. It is how the Law guarantees that a non-resident seller fulfils his/her tax obligations. If you are selling with a loss and are up to date with your fiscal obligations, you can request a full refund. This process is slow and might take up to 12 months.
· “Plusvalía” tax is a tax paid to the Town Hall, based on the theoretical increased on the value of the land. This tax is unfair because even if it is a sale with a loss, the Town Hall considers there is an increase on the value of the land. Therefore, the Supreme Court has already ruled that many sellers might be entitle for a refund, you can find more information in our website “Litigation”
If you are a permanent resident in Spain, you might have to pay if selling with a profit. Do not hesitate to contact our Solicitors if you are not sure.
The buyer, or the bank involved, will send the deeds to the Land Registry to make the proper changes. This cost, like Notary fees, is usually paid by the buyer, but the parties can agree on something different.
