Every client has a different background and therefore requires advice to suit its profile and needs. Whether you are an investor solely interested in financial return, someone looking for the perfect holiday home, or a future resident in Spain, our staff will team up to give you the most personalised assistance.
The legal procedure involved in purchasing property in Spain varies significantly from other countries.
Before the purchase, M.S.A. will carry out all the necessary legal checks to confirm that the property you are purchasing, as well as the building company, fulfil all the requirements of the Spanish Law. These checks include the confirmation with the Land Registry that the property is free of charges and liens, and also the verification of the building company profile, building licences and permits.
In order to complete the purchase of a property, Public Deeds of Ownership have to be drawn up by a public official (called Notario) and signed by the seller and the purchaser in his presence.
Power of Attorney can be granted to M.S.A. in order to carry out the purchase, sale or any other necessary procedure on behalf of our clients.
Once the Public Deeds of Ownership have been signed, M.S.A. will make the necessary tax and fees payments and inscribe the property at the Land Registry under the new owner’s name.
If you wish to sell your Spanish Property, we will provide you full assistance with the drafting of the Reservation and Private Purchase agreements and with the follow-up of the payments.
As for the purchase, all the necessary paperwork and tax payments will be carried out by us after the sale.
TAXES PAYABLE UPON THE PURCHASE OF A PROPERTY
1/ I.V.A (or V.A.T.)
V.A.T. is the tax paid on the purchase of a new built property. The VAT rates are: 7% on property and 16% on commercial units
I.T.P. (or Transmission Tax) is the tax paid on the purchase of a re-sale property. The Transmission Tax is 7% but can vary depending on the region of Spain where the property is located
2/ Stamp Duty
The Stamp duty is payable only on the purchase of a new built property. The Stamp duty rate is 1% (depending also on the region of Spain)
TAXES PAYABLE UPON THE SALE OF A PROPERTY
1/ 5% Tax retention for non residents
Upon the sale of the property, a retention of 5% is applied to the selling price. This 5% is a sort of down payment to the Tax Office against the Capital Gains Tax.
2/ Capital Gains Tax
The Capital Gains Tax for non-residents sellers amounts to 35% of the net profit. The 5% already paid will be discounted at that moment.
3/ Land value Increase Tax (Plusvalía)
Every year, as a property owner in Spain you will have to pay:
1/ Local Rates (IBI)
This tax is issued by the council and is payable once a year.
2/ Wealth & Income Tax for non-residents
This tax, based on a percentage of the property value, is payable every year to the Tax Office.
As Tax Representative of our clients we prepare the yearly Wealth and Income Tax Return and liaise with you for the payment.
If you need financing to complete the purchase of the property, you have the option of applying for a Spanish mortgage.
Getting a Spanish mortgage is a fairly simple procedure and the amount granted will be based on the valuation of the property.
M.S.A. works with Local and International banks to offer our clients the most suitable type of mortgage at the most interesting rates.
You will be able to choose between a “Capital & Interest” repayment scheme or an “Interest only” mortgage (from 12 to 24 months).
The setting up of a mortgage involves some expenses like the payment of the stamp duty, Mortgage deeds drawing up and registration and mortgage set up fee.
M.S.A. will provide all the relevant tax and legal information to clients interested in setting up a Spanish Limited Company to manage their investments in Spain.
• Nie number and residency permits
The NIE Number is an Identification number for foreigners. This number is issued for tax purposes, and it is compulsory for anyone owning property in Spain. The NIE number is also requested by the banks prior to granting a mortgage. This number can be obtained at certain police stations in Spain or through the Spanish Consulate abroad. Our team will help you chose the most suitable option and assist you in the procedure.
The Residency Permit can be applied for by foreigners relocating to Spain and living in the country for at least 6 month of the year. M.S.A. can apply for the Residency Permit on behalf of our clients
• Spanish wills and inheritance tax
As owner of a property in Spain, it is highly recommended to make a Spanish Will to cover your assets in this country, eventhough it is not a legal requirement.
The purpose of making a Spanish will to cover the Spanish assets will make the whole procedure easier, less expensive and much less stressful for the heirs.
The Spanish will is drawn up by us, following to your instructions and always in accordance with Spanish Law, and has to be signed in the presence of a “Notario”.