REAL ESTATE PURCHASE & SALE WILLS AND INHERITANCE TAXATION CORPORATE LAW
How to sell a property in Spain
Although purchase and sale operations are, logically, very similar (like two sides of the same coin), it is a good idea to stop and look at the process again, from the seller’s point of view.
1.- CHOOSING AN ESTATE AGENT
It is not compulsory to use the services of an estate agent, but unless you are particularly knowledgeable about the demand in the area, are familiar with sales strategies and have access to potential customers, it is very much in your interest to hire the services of an agency that can promote your property professionally and efficiently.
We strongly advise our clients to send us a copy of the estate agency sales agreement before they sign it, so that we can check everything is in order. As a general rule, the client must read the conditions of the agreement very carefully and be aware of the implications of certain clauses, such as the exclusivity clause, which binds the owner to not sell through any other agent.
The estate agent is not an expert in legal and tax matters, so the client should take advice from the lawyer, who will best oversee the sales process and ensure it is carried out in line with existing legislation and that all corresponding taxes are duly paid.
2.- DELIVERY OF DOCUMENTATION
In order to proceed with the sale of your property, both your lawyer and your estate agent will need to be given a series of documents:
a) Title deed or other proof of ownership (deed of purchase, inheritance, etc.)
b) Identity document (passport and NIE)
c) Certificate of tax residence (if applicable)
d) Nota Simple (extract from the Property Register)
e) First Occupancy Licence or Certificate of Habitability
f) Most recent Local Council Rates (IBI) receipt
g) Community of property owners certificate
h) Certificate of outstanding debt issued by the bank (if there is a mortgage on the property)
i) Most recent utilities bills
3.- CALCULATING TAXES AND GAIN
Our experience tells us that, before accepting a purchase offer, it is crucial for sellers to be properly informed about what their net profit will be once they have deducted taxes and expenses, and what those will be exactly, to avoid any disappointment later.
At Vicente & Otaolaurruchi we can prepare those calculations in a matter of hours.
4.- SIGNING THE POWER OF ATTORNEY FOR SALE AND TAX REPRESENTATION
Regardless of whether the owner will be able to attend the signing of the deed at the notary’s office, it is highly recommendable to grant a power of attorney for sale and tax representation in our favour. This document will authorise us to carry out a large number of procedures on your behalf, such as cancelling and transferring utilities contracts, cancelling direct debits, cancelling insurance policies, notifying the Town Hall and the community of property owners of the conveyance, processing the cancellation of your mortgage at the Register, submitting your tax statements, and requesting any return for which you may be eligible.
5.- PREPARING THE PURCHASE-SALE CONTRACT
Once you accept an offer for your property and you instruct us to act as your representatives, we will provide the purchaser’s lawyers with all the documentation that will enable them to carry out all the relevant and standard legal checks. Likewise, we will draw up a contract with the agreed conditions, and we will send it to the purchasing party for their approval. A translation of this contract will also be sent to you for your information.
6.- SIGNING THE DEED OF SALE
The selling process ends when the public deed of sale is signed by the purchaser and the seller. At the moment of signing, the seller grants the purchaser the title deed of ownership and the purchaser hands over the rest of the agreed price. The deed of sale is signed before a notary. Notaries are public officials and, consequently, they are independent. They publicly attest that the parties have agreed the transaction and that they have done so in keeping with the law. Prior to the signing, the notary requests up-to-date registry information about the property, to verify that there are no last-minute encumbrances or foreclosure entries, and immediately after the deed is signed, they send to the Property Register an electronic copy of the title deed, so that the Register has a record of the new owners straight away.
Throughout the signing process at the notary’s office, our clients are always accompanied by their lawyer, who oversees the documentation, checks that everything is in order, and acts as an interpreter. If there are any professional or personal reasons that prevent the clients from going to the notary’s office on the indicated date, we will attend on their behalf to sign the deed. In this case, the clients would need to provide us with a power of attorney beforehand.
The power of attorney can be signed before a notary in Spain, which is the simplest and most economical option; at any Spanish Embassy or Consulate abroad; or before a notary public in the client’s country of residence, in which case the document will need to be translated into Spanish and legalised with the Hague Convention apostille. As mentioned previously, powers of attorney include general authorisations that enable many other procedures to be carried out on the client’s behalf, apart from being present before the notary.
At the signing, the sellers will hand over the keys to the property and they will be given the rest of the price, which is generally paid by cheque. Once the cheque has been paid into the bank, the seller will have access to those funds in approximately 2-3 days.
7.- CANCELLING CONTRACTS AND PAYING TAXES
Our firm will handle the processes of transferring or cancelling the utilities contracts, cancelling direct debits, paying any taxes that the sale entailed, and requesting any applicable refunds.
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