When investing as a business, the same rules apply mostly.
Spain: buying property
The one significant difference is in relation to tax matters. On the other hand, when investing as a business, there are several possibilities to optimize your taxes. We recommend you consider the structure in advance, since there are many regulations you can take advantage of. Also, knowing the market, the trends and the other players in the sector is crucial.
In addition to our experience and knowledge, we have a wide realtor network to help you find the perfect targets. Yes, that is usual in Spain. Unlike in most western countries where the down payment is paid to an escrow agent closed account, trustee, Notary, etc. Any risk can be reduced to very little with some basic reviews, for example, making sure that the time between the payment of any deposit and the final sales deed is not excessively long, making sure the seller is not a company on the verge of bankruptcy, and confirming that the outstanding amount of the mortgage does not equal the purchase price in which case the down-payment cannot be paid to the seller because the whole purchase price has to be paid to the bank.
With the right due diligence, it is acceptable in Spain to do as the Spaniards do — pay the down payment directly to the seller at the time of signing the down payment agreement. The Realtor is normally responsible for: a Finding you the perfect purchase target based on your search criteria.
The Notary is responsible for: a Identifying the parties of the signature. Please note that Spanish notaries, unlike in many countries, do not have any role in the deal during the negotiations or when drafting or signing the down payment agreements. They also, do not normally act as escrow agents because the money normally moves directly from the buyer to the seller.
Your Name required. Your Email required. Your Phone. Your Message. Email Phone WhatsApp. I consent to the conditions. Owners who are caught illegally advertising or letting out their properties without complying with local legislation can be liable for significant fines. If you are planning to buy an apartment which is part of a residential block, you should also check whether there are any rules set by the committee of owners that prohibit or restrict short-term letting.
You may want to consider hiring a Spanish letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf.
Land Registry Spain information in English
In some regions, it is obligatory to use a specialist tourist apartment management company for short-term rentals to tourists. Owners who let their properties on a long-term basis are free to do so within the terms set out by the national rental law. However, it is worth seeking professional advice to make sure that you are complying with Spanish legislation and that you are using the correct rental contract. In Spain, there are different types of contracts depending on how long the property is due to be let. You can get copies of these contracts from tobacconists. You must ensure that you declare your rental income to the Spanish tax authorities Agencia Tributaria whether you are resident in Spain or not.
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Taxation is a complex issue, and it is advisable to seek the advice of an accountant or professional tax adviser with comprehensive and up to date knowledge of both the UK and Spanish tax regulations. Equity release schemes are schemes which are designed to allow homeowners to release equity from the value of their property as income, a lump sum or a mixture of both. A reverse mortgage hipoteca inversa is one form of equity release which allows homeowners to borrow money against the value of their home, which is used as collateral. Reverse mortgages are generally marketed at retired homeowners who are over 65 years old.
If you are considering an equity release scheme, such as a reverse mortgage or lifetime loan, it is advisable to check that the company offering the mortgage is registered with the financial regulator for the securities markets, the Comision Nacional de Mercado de Valores CNMV and that they do not have any warnings issued against them. A list of financial companies which are not authorised to operate in Spain and those subject to an ongoing investigation is available on the CNMV website.
Seek independent legal advice prior to signing any contracts to make sure the information the company has given you is correct, there are no abusive clauses in the contract and you are fully aware of your rights. Be suspicious of financial companies or agents who try to persuade you into signing a reverse mortgage agreement as a way of avoiding or reducing your tax obligations. If you have any concerns about your tax obligations for example inheritance tax you should seek the advice of an experienced professional tax advisor who can advise you independently.
If you are not happy with the scheme you have been sold, the first step is to submit a complaint to the company responsible for your investment.
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If after 2 months, you are not satisfied with the response or do not receive a response, you are entitled to complain to the CNMV. Although the CNMV final reports are not binding, they will comment on the conduct of the company or person against whom the complaint has been made.
Where the report favours the customer, the company involved is required to notify the CNMV of any action taken to resolve the matter. If you believe you have been a victim of a fraud involving an equity release scheme you can register a statement with the police and seek independent legal advice on taking action through the courts. Further information for victims of fraud is available on the fraud page. Timeshare ownership is well established in Spain.
However, there are also many unscrupulous companies, some of which claim to provide various incentives including stock market investments and discounts on airfares and accommodation when exchanging existing time-share ownership or taking out membership of holiday clubs. Spanish Property Insight provides information and advice on buying a property in Spain. Expat forums, English-language newspapers and talking to local residents and other British nationals who have already made the move can really give you a feel for an area and give you insight on any local problems.
The Spanish Ombudsman is responsible for defending the fundamental rights and civil liberties of citizens by monitoring the activity of public authorities. If you have a complaint about any public authority, you can submit a complaint to either the regional or national ombudsman. If you are facing problems with your property in Spain, there are many residents associations who may be able to provide support and advice as well as put you in touch with others who have had similar experiences.
Finca Parcs Action Group. This information is provided as a general guide and is based upon information provided to the embassy by the relevant local authorities and may be subject to change at any time with little or no notice. The FCO and the British embassy will not be liable for any inaccuracies in this information. British nationals wishing to obtain any further information must contact the relevant local authority. To help us improve GOV. It will take only 2 minutes to fill in.
Legal advice We strongly recommended that you choose an independent lawyer who specialises in Spanish land law urbanismo. Spanish notaries A Spanish notary public will prepare the contract of sale and issue the public deeds.
Check list: Legal requirements of a property in Spain
As the purchaser, you have the right to choose which notary you use. Find English-speaking notaries British estate agents, promoters and lawyers If you choose to work with a British estate agent, promoter or lawyer, check that: they are qualified, reliable and have experience operating in Spain they are registered with the Law Society in the UK they specialise in international transactions If your lawyer is based in Spain, ask for their registration number and check that they are registered and practising with the local bar association Colegio de Abogados.
More information can be found on their services here Property disputes: legal aid If you are involved in a property dispute and do not have enough money to pay the costs of a court case, you can apply for legal aid.
Translators If you do not have a good understanding of Spanish, make sure that you get all contracts and documents translated by an independent translator. Mortgages Do your homework: you should analyse and compare different products and services offered by lending companies. You should also check with the Bank of Spain that the lender is authorised to operate in Spain There are a range of mortgages on offer and you should pay special attention to the interest rate and repayment period, fees for setting up the mortgage as well as early repayment and cancellation fees.
Tax The Spanish tax authority, the Agencia Tributaria provides some information on its website in English. Fraud See property fraud guidance. Complaints against the legal system If you believe your lawyer has been negligent and has not met their obligations, you should first complain to the provincial bar association. Complaints should be in writing and in Spanish. In the case of a private build the previous owner built their own house and decided to sell before 10 years had lapsed you will need to request these details separately You should check the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar.
It is also wise to get a certificate from the town hall proving that there are no unpaid rates from previous years the cadastral certificate giving the exact boundaries and square metres of your land - this will be linked to the land register record by a cadastral reference number. Fees are calculated depending on the purchase price and the complexity of the title deeds. Factor in between 0. For this, fees of between 0. Using the service of a lawyer during the purchase process is highly recommended.
Related Spanish Legal Property Information
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