Spanish Lawyer

Gonzalo Blanco is a Spanish Abogado with over 5 years’ experience of advising British clients qualified as an Abogado in 1998 .
I am a independent solicitor specialising in conveyancing whose main aim is to protect the rights of foreign citizens either resident or non-resident in Spain. Based in Xativa and in Denia.
My philosophy is to offer you the best service taking into account your needs. I care about my clients and assist them with any problems they may have.
I am also a specialist in residence permits, social security cards, tax returns, company set up, wills, inheritance, and in general legal assistance with any queries you might have during your stay.

Trader 46

Before buying a home in Spain, you should get to know the Spanish system for purchasing/selling and owning a property, there are differences from the one you know from your home country. By knowing and applying the law and the customs, you are more able to avoid difficulties.

Private contracts

You can legally purchase a property using a private contract, as long as it contains some minimum requirements: identification of the parties contracting, the object of the sale and the conditions of the sale. If you sign such a contract and later do not want to go through with it, you may be taken to court by the other party, demanding that you comply with it. Some contracts also contain methods of dissolving a contract, for instance that the vendor loses the money he has been paid. On the other hand, if the vendor breaks the contract, for instance if he gets a higher price offer, he may be forced to pay the buyer double the amount of the sum deposited.
A receipt for a down payment or a reservation may be worded in such a way that it is a legally binding contract.
A private contract may be a good method to agree on a purchase/sale that cannot be concluded at once. If you as a buyer need some time to provide the total amount involved but like the property and want to bind the purchaser by paying a deposit, you can in the contract stipulate that the rest of the monies shall be paid at a later date.
Even as a vendor, the private contract may be useful, because it gives you the assurance that the buyer will complete, before you take the property off the market.
However, it is not necessary in all cases to make a private contract. If you have all the money available, you can go straight to the notary to make an "Escritura Publica de Compra/Venta" (a public purchasing/sales deed).

"La Escritura"

While the private contract is legal, it does not give the buyer sufficient legal protection. That can only be given through the registration of your ownership rights in the Property Register. To be able to register a purchase there, the agreement must always be drawn up by a public notary.
The buyer has the right to choose the notary to be used. He is normally also the one who pays the notary fees. The notary will draw up the "Escritura de Compra/Venta" based on the title deed of the vendor and the declarations of the signing parties (details of the price and the payment). He will also include a "Nota Simple" (certificate) from the Property Register as to who are the present owners of the property and if there are any encumbrances existing on it. This certificate shall not be older than 48 hours before the signing of the deed, and blocks out any other inscriptions on the property. You must ask that the notary complies with this obligation!
Be aware that the notary does not check out anything else other than the identity of the signing parties, and that the information given in the deed corresponds with what is mentioned in the "Nota Simple" from the registry.
If you do not take a mortgage, and are not getting payment terms on the purchase of the property, it will be written in the Escritura that the purchasing price has been fully paid and that the document is the most firm receipt. In case a sum lower than the real purchasing price is being declared in the deed, with this receipt the vendor cannot claim any more money. If payment terms are agreed in the Escritura, what is normally added is called a "clausula resolutoria", whereby the vendor reserves his property rights until full payment has been given.

The registration

You should get a "Copia Simple" from the notary as soon as you have signed the deed. That is a photocopy of what you have signed, with the stamp from the notary, but without the signatures on it. The original stays in the files of the notary (meaning you can always get a new copy if you lose your Escritura), while what is called "La Primera Copia" (first copy) is sent by the notary to the Property Register.
The notary normally asks the buyer if he wants the deed sent by fax the same day it is signed to the Property Register. You should insist that he does so. At the Property Register they will enter the new Escritura at once into the daily journal and thereby block out any other entries on the property. From the daily journal it is later transferred into the main ledgers, and the "Primera Copia" is stamped by the registry and given the pertinent registration numbers. Then it is sent back to the notary, where you can pick it up. Today this process normally takes a few months.
Before making a private contract or paying a down payment on a property, it is prudent to ask the vendor to provide you with a "Nota Simple" from the registry for you to check it out, or to give you a copy of his title deed, so that you can go to the Property Register yourself and ask for a "Nota Simple". However, even if you previously have got such a "Nota Simple" you should still ask the notary to include the one ordered by him from the registry less than 48 hours before the signing of the Escritura.
Although the vendor and buyer can make an agreement themselves, or they can go straight to the notary and ask him to draw up the "Escritura de Compra/Venta", it may be wise to seek the assistance of a lawyer.

G. Blanco
Spanish Solicitor
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Trader 45
The procedure to purchase a property in Spain
The procedure to purchase a property in Spain is different from the rest of the European countries as far as legal and registering aspects are concerned. The differences are less accentuated with southern countries (France, Belgium, Italy, etc) than with Anglo-Saxon countries (Great Britain) or Scandinavian countries (Norway, Sweden and Denmark).

In Spain, all matters relating to purchase and sale contracts (concept, rights and obligations of both purchaser and seller, contract effects, etc.) are regulated by the Civil Law and in particular by the Civil Code.

Napoleon’s French Civil Code of 1804 provided the inspiration for Spain’s Civil Code. Napoleon’s Code, which in turn is influenced by Roman Law, has also provided the inspiration for other current European civil codes (Belgium, Italy, etc.).

In the Spanish contractual system, any
agreements, clauses and conditions considered to be relevant by the parties can be freely established in the contracts. However, despite the contractual freedom existing in the Spanish legal system, all agreements, clauses and conditions must obligatory comply with some rules and principles. Thus, the contractual freedom is limited by these rules and principles.

Purchase and sale contracts are governed by articles 1445 to 1537 of Spain’s Civil Code. These articles establish the purchase and sale concept, who are entitled to purchase and sell, the obligations of both purchaser and seller and the causes of contract resolution. Some of these articles must obligatory be enforced while other are not obligatory. In this latter case, the parties can freely establish the agreements and clauses of the contract, according to their wish.

Purchase and sale contracts can be made either in writing or verbally (article 1278 of Spanish Civil Code). However, it is advisable to make them in writing, particularly if the object of the purchase and sale is a property.

Purchase and sale contracts are fully valid between the contracting parties and their heirs, provided that the following requirements are fulfilled:
1 Consent of the contracting parties.
2 Object of the contract.
3 Purpose of the contract, where the actions to be performed by the parties are described. Seller: delivery of the object and its detailed description. Purchaser: payment of the price including detailed amount.

Finally, all contracts entered into by the parties either in writing or verbally can be notarised and become public title deeds through their signing in the presence of a Notary Public. Both purchaser and seller are entitled to have their private purchase and sale contract notarised.

The main difference between a private contract and a public title deed is that the public title deed has direct access to the Registry of Properties and, once registered, the name of the owner will be recorded and his or her right with respect to the property will then be protected not only against the seller but also against any third party who might claim rights upon the property.

Prior to signing any private contract of purchase and sale with a promoter or individual, it is very convenient to appoint a professional (Lawyer) who will be able to check the content of the contract and give legal advice to the purchaser.

Thus, the lawyer will verify if the contract meets all the essential requirements to be valid, that is, if an accurate description of the object of the purchase and sale is included and will inform the purchaser.

Likewise, he will ensure that the method of payment is adequate and that the penalty clauses imposed on the parties for breach of contract are fair for both parties (for instance, if the penalty for delay in a payment is fair compared to that imposed on the seller for delay in the delivery of the property).

With regard to new-built properties, it is very important to verify if the builder is the owner of the plot of land upon which the property object of the contract is being or is to be built. In this case, the lawyer must also verify if said builder has obtained the building licence and the extension of such licence.

Finally, it has to be taken into account that the builder can be obliged to take on insurance or provide bank guarantees for any monies paid by the purchaser in respect of the property price. Thus, in the event that the building works do not start, are never completed or are not completed by the agreed delivery date, the purchaser will be guaranteed the refund of any sums paid.

Once the lawyer has ensured that the contract complies with all the abovementioned guarantees, it can be signed and the payments made, according to what has been agreed.

Finally, at the same time or after the final payment is made, the purchaser will be entitled to formally complete the purchase by signing the public title deeds before a Notary Public.

Spanish Solicitor
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Trader 44
Could you please tell me if I need to make a Will in Spain and how much tax will I have to pay. I have already a Will in the UK?

It is very advisable to make a will in Spain for several reasons.

If you have a Spanish Will you do not have to wait for the payment of the inheritance in your home country. Otherwise, you will have to wait until this is done and then you will need to provide a translation of the probate proceeding and apostle-stamp the document (a stamp in according to a Hague convention on certification of signatures by official bodies). Only then can papers be brought to Spain to make the necessary changes in title deeds and bank accounts. As all these processes can take a long time, and you might incur penalties, as in Spain you have to pay your inheritance tax within six months.

There is a rumour among foreigners in Spain that the Spanish tax administration will take over your property in Spain when you die, or that inheritance taxes are very high. This is not correct. In a normal inheritance, taxes are moderate.
Where property, and generally, the estate of a person is transferred by inheritance, the Tax authorities charge a percentage on the tax based according to a sliding scale where different considerations are taken into account. The same scale is applicable to donations, which is important insofar as this tax could be applied to a purchase/sale contract where the Tax Authority deems that the parties have under-declared the price of the property on a Public deed of conveyance or, in some cases, private purchase contract.
But one needs to plan the inheritance from a fiscal point of view, analysing the possible reductions that can be applied by law to this tax. For instance, if both testator and heir are residents in Spain, and the inheritance is a permanent dwelling, the taxable amount can be reduced 95%. However, for the heir to keep the reduction, he must continue as resident and without selling the property for 10 years. There are also other reductions, depending on relationship between deceased and heir.
If you decide to sell your inherited property, you must take into account that you will have to pay income tax on the amount resulting from the difference between the selling price and the amount appearing in the title deeds, in other words, you will have to pay income tax on the benefit obtained through the sale. Although the individual circumstances of each case have to be taken into account, in some cases it could be advantageous, to declare an amount close to the market value and not lower.
Finally, as the inheritance tax is a regional tax collected, governed and inspected by the Autonomous Communities you must ensure that you pay the inheritance tax to the relevant and competent community.

G.Blanco Spanish Solicitor This email address is being protected from spambots. You need JavaScript enabled to view it.


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