Buyers Guide

Page 2

The Spanish legal System and land registration process is different to most other countries and is not to be tackled by the do it yourself type. I have heard of unfortunate people having problems buying property in Spain, all of them could have been avoided if the purchasers had used professionals and common sense, as always buyer beware.

Property owned by companies: You should also consult a specialist abogado, if the property that you wish to purchase is owned by an offshore or Gibraltar based company and you wish to consider purchasing the company that owns the property.
You will then not only be dealing with a property purchase, but the cost of maintaining an offshore company or companies, Spanish and international taxation.

The administration costs, new laws and taxation, now applied to properties owned by offshore companies must be carefully studied, these companies are set up by specialist tax lawyers, and you should use one too if your are considering buying such a property or the company that owns it. Most of the advantages previously applicable to properties owned by offshore companies are now heavily taxed, the Spanish tax authorities are well aware of all the practises and will fight you for every cent of tax advantage!
Properties owned by Spanish S.L. companies also need close assessment, if the tax authorities think the beneficiary of a property owned by a company has changed, all the transfer taxes will still have to be paid in any case, you will need specialist advice.

Next: Conduct a search: Nota Simple The next step in conjunction with your lawyer and agent is to do a search on the property at the Registro de la Propiedad, the Registro for a small fee will supply a Nota Simple for any property. It will give you the details of any Mortgages on the property. A good agent acting directly for the vendor will probably already have a copy. Buying a property with a mortgage attached is not a problem, as long as you know about it beforehand!.
Your lawyer will advise you on the cost of continuing with it, paying it off or re mortgaging.

Make an Offer: Next if all is well, and your lawyer is happy, with your agents help you should make an offer and firm details up in writing, covering all the points to be negotiated, these should include:

The Price
The declared price, see the declared value on the escritura [title deeds]
Payment Method and Currency
Fixtures and fittings
Furniture [with inventory]
Who pays which taxes [especially the plusvalia]
Take nothing for granted, include it in the offer, presume nothing.
This way you only have to negotiate once and there should be no hold ups or
surprises.
This is where the skill of the agent comes into play carefully bringing the vendor and buyer into a harmonious agreement.
Having funds available at this time will convince the vendor you are serious.

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