Legal Basics

Legal Basics

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What is important

when you buy a property in Spain?

(updated: 27.05.2016)

There are important changes in catalan laws

AICAT: Since the 15th of September 2010 all real estate agents, who operate in Catalonia through internet or with a public office had to register with Catalonian government, Departamento de Habitatge, to get permission to operate and an AICAT number, which allows to be active. Only agents with this number are legal, it doesn't matter what the illegal ones say. And they do say stupid things to fool buyers about their illegal status. Spain is very slowly in pursuing illegal "agents", but some day these will disappear paying high fines.

So, if you want to be on the safer side, go to a legal agent and you won't run too much of a risk with the paper work. Also you down payment is well kept, the legal agent won't disappear tomorrow. The legal agent is surveyed by Catalonian government and if anything goes wrong he isn't any longer AICAT.

On the other hand the commissions are a lot lower than they are with some sharks, that have charged in former times 5 times of what a legal agent charged.

A good agent always has a look at the papers, as there are deeds, tax payments, electricity bills, water bills and he knows many details about the properties he's selling.

For sure no agent knows everything and sometimes can't do anything against cheaters, but experience in combination with people skills helps to keep the wheat from the chaff.

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Cédula de Habitabilidad: Since 2008 this certificate is important for owners, to sell or rent a living space in Katalonia. This subject has got a red cloth for them in 2010 through 2012 due to preposterous law enforcement by government. Since 2012 we all can breathe again, the certificate is given again, the explosive situation has calmed down and normally everybody who has a legal or legalized (min. 6 years old, if illegally built) living space will have the paper.

Who needs the Cédula?

If in the deeds (escritura) is marked a habitable living space (vivienda) in rural or urban area, it is a must to show the original Cédula de Habitabilidad to the notario. If you want water or mains electricity you need it as well. All buyers asking for a mortgage can't buy without.

Who will get a Cédula?

Every owner who has registered his living space at least in Cadastre and can show proof of his yearly tax payments (IBI from BASE)

This means also that every buyer doesn't need to be afraid before the purchase, wether he'll get the Cédula or not. Once the house is registered he'll have one. The only thing to consider is the time. Applying for a new Cédula needs at least 1 month, but it happened in many cases, that it were several months until having the valorous paper in the hands.

How do you get this Cédula?

If you get a certificate from town hall, that

  1. the building was existing before the 11.08.1984
  2. that the house is legal
  3. there was never a case opened against the owner or builder because of illegal building

the you'll get the "Cédula" without the remarks of illegal building. If you can't get this certificate you'll have a note in the Cédula, that the legality couldn't be proved.

Now you get in touch with an architect or with us to edit a paper with the details of the living space. With this paper and some necessary documents (they differ from case to case) we would order the final Cédula.

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CEE: Since the 01.06.2014 owners who want to sell or rent need another certificate. It is a paper that tells about the energetic efficiency. This is a document, edited by an engineer, who measures the rooms, has a look at the walls, bottom, roof, the windows and the devices to heat or cool the space. It is called the Certificate of Energetic Efficiency (CEE) and is needed for all the living spaces for sale or rent. It tells about the efforts to heat or cool rooms, so that all ineterested people can know, if the room will cost a fortune or not to maintain the temperature. brauchen. This certificate can be done within 3 days and good engineers endorse house plans with it.

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NIE: Since around 2005 it isn't possible anylonger to buy a property without NIE (foreigner identification number) and and since 2000 you needed it already to buy a car.

Thus every buyer needs this number and they should already have it for a sale pre-contract. To receive this NIE is relatively easy nowadays. After making an appointment via Internet with the immigration office at the National Police, which is responsible for the place where you want to buy, you go there with a completed application + Passport in original and copy. Then you pay the fee in the bank (currently € 8.45) and already about 3 days later you can normally pick up his document. However, it unfortunately happens sometimes that you don'tget an appointment, because the office is overloaded with work. This is usually over after 1 to 3 days.

Another method to obtain this NIE, is about the Spanish Embassy / Consulate in the UK. It is said, it would now take only 3-4 weeks to get the NIE. Unfortunately I have not had a case to judge. In former times It was about 3 months. Suspicion is wise and it's certainly faster to get it in the local authority.

We can help you to make the appointment, fill out the form, copy your passport and accompany you to the authorities.

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Bank account: Normally a purchase is handled completely on site, where you buy. That is, at the end you go to the notary with a bank draft, which includes the rest of the payment for the seller. For this it is necessary to have opened a local bank account. You will need it anyway later to buy your yearly taxes, electric and water bills. Of course we are here to help you as an interpreter and explain everything your needs to the bankers. Once the account is opened you can transfer money to Spain in order to have the money available on the day of the purchase .

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Sales taxes:  It is important to know whether to buy a house from a resident or non-resident. The resident normally pays his taxes for a possible profit in the following year. Thus the buyer has nothing to do. But if it is a non-resident, then the matter is different. There is a flat-rate sales tax, which today amounts to only 3% of the declared sale price. It used to be 5%.

It is not liability of the seller to pay this tax into the tax office. Reliable isat the end the property. This is why the buyer holds back these 3% and makes the payment after purchase within 1 month to the tax authorities. This is not always easy because often the paticipating parties aren't known in the tax office. They have to be registered with special forms that they must sign personnally. If the seller is already out of the country, it will be difficult to pay the tax.

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Property Purchase Tax:   ITP called in spanish is a purchase tax payable on each purchase within 4 weeks after the notarised purchase contract. This amounts to 10% in Catalonia.

Example: You buy a property for 100.000 € and you'll pay a further 10,000 € as tax.

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Yearly Property Taxes:  Here they are called IBI. They are payable once a year and they are usually charged by a tax office (BASE). Do not believe the stories that there are no taxes to pay. Check at least once per year in the summer time (May/June) your tax invoices. Go the BASE, or to town hall and ask for invoices. If you have a bank account, you can give permission to withdraw the taxes from that account.

Before going to the notary, the buyer should know about the tax situation, if there are any unpaid bills in the BASE office. We have lived sometimes surprises, which appeared in form of thousands of euros debt and the p`roperty seized. It wasn't possible to sell it. Some buyers, that purchased without assistance, had this surprise after the purchase. Preventable trouble! This is why we always go and check before the notary appointment, though nowadays the notaries also check and inform before the lecture of the final contract.But, that can be too late.

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Plusvalía: It came with the Cédulas. They were for urban space and country properties are rural space.  So the town halls declared the place around the country houses urban, charged more taxes and as a secondary effect they also can charge plusvalía (plus value). It is important  to request prior to the purchase in the community, how much this tax will be. Normally these taxes are smaller amounts, but: the exception proves the rule. The value is calculated with special computer programs that are designed for town halls.

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Lawyer: It is usual that the illegal estate agents convince their customers to better go into the deal with a lawyer. Well, this is understandable because first of all they don't know the business very well and  the laws even less. And 2nd most of them don't even speak the spanish language very well. So they don't like the risk and prefer a lawyer involved. But, on the top they ask their customers to pay the lawyer.

We, the legal agents are approved agents and know our business and the laws quite well. We do not normally involve lawyers as it would be a shame for us. We make our contracts ourselves and our contracts are official contracts approved by the Customer Protection Department. And if we fail for whatever reason, we are professionally insured by special companies.

Nevertheless, if any customer would feel better with a lawyer involved, there is no problem with us. The costs of the lawyer then they pay, as it is their decision. We work together with any lawyer. But: they are not all working 100 % either. They can fail, too!

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Will be continued when necessary ....