The (preliminary) purchase contractThe (preliminary) purchase contract is a simple document in which the seller expresses his intention to transfer ownership to the buyer and the buyer expresses his intention to purchase at the agreed price and conditions. The buyer pays 10% of the purchase price on the third-party account of the lawyer. In Spain the notary plays no role in the payment or the deposit of the purchase price.
During the purchase
The transfer of ownership must be confirmed by a notary in a deed. The following are required: proof of identity (or power of attorney) from both parties, the property title of the seller (a form that reports the investment to the Central Register) and the payment from the buyer. The buyer and seller and the notary sign the contract and on that basis the taxes are levied.
After the purchase
Once the purchase has been completed and a management agreement has been concluded with Granfiesta, Granfiesta ensures that the facilities are in order, taxes are paid and your property rights are registered. With Spanish property in your name, Granfiesta will annually arrange your income tax on rental income and property taxes.
Apart from the general maintenance costs, there are a number of costs in the form of taxes and fees that owners of property in Spain have to pay.
Real estate tax (Impuesto Sobre Bienes Inmuebles - IBI)
The local tax on real estate, regardless of whether the owner is a resident or not, is calculated on the basis of the "valor catastral" (an administrative value determined by the government), with a tax rate of 0.4% - 1.1% of the valor catastral (depending on the region).
Capital tax (Impuesto Sobre Patrimonio)
This tax is regularly changed. There is a tax-free rate of € 700,000 per person.
Income tax (Impuesto sobre la Renta de No Residentes - IRNR)
Non-residents who own real estate must pay an annual income tax on the rental income. Usually non-residents pay a fixed percentage of 25% of the gross income they earn from their property in Spain.
Cost of the association of owners (Comunidad de Propietarios)
Owners of apartments pay their share in, among other things, the costs for the maintenance of the common areas.
Problems that you will not getForeign buyers often have bad experiences with buying property in Spain:
The property is not registered
Most likely because it was built illegally. Many unregistered properties are sold to foreigners because foreigners check the registration less often. If you find a bargain, chances are that it is not registered.
Costs of infrastructure have not yet been paid
Even after a long time, there may still be a claim on the property to allocate the costs of the infrastructure to all real estate involved.
There are several brokers involved
It can happen that you have to talk to several brokers to find out the details about a house. Each broker wants to receive a commission.
The property has been sold to more than one buyer
The buyer has the intention to commit fraud or he has received a better offer and could not refuse.
The new house is delivered late, with defects, or not in accordance with your expectations.
Costs that you will not getUnexpected extra costs in Spain can amount to the purchase price of the property:
Consequences of vacancy
The apartment has been empty for several years and has so far never been used with the result that walls and ceilings are damaged (cracks, dirt); taps, doorbells and pipes are rusted and must be replaced; double glass contains moisture; windows and doors do not fit well.
The apartments do not have air conditioning, no wifi, no internet, no lightning conductor, no fridge and no extractor.
Electricity, water and gas are not connected. In Spain this can not only take a long time, but it is also not easy to get it organized.
No rental service
The apartments are not part of a rental project with full service. To get this organized in one way or another is not always possible.