The after-sales & registrations of a house after completion at the notary consist of: registration at the Land Registry & Cadastre, payment taxes and the transferring of the service contracts. These works are done by the lawyer. However, in case of a purchase with a Spanish mortgage the bank takes care of the tax payment and registrations.
Don´t forget about your house insurance or Spanish will and save ALL bills and proof of payments. Only then are these costs deductible from the Capital Gain Tax if you sell with profit in future.
It often takes at least 3 months until the final balance meeting with the lawyer can be planned. At this moment the client receives all official documentation, bills/invoices and the final balance of the project.
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After-sales & registrations lawyer
- Transfer tax: Payment of ITP transfer tax (within 30 days) over house (8%) and potentially furniture (4%)
- Actos Juridicos Documentados: Payment of 1,5% Actos Juridicos Documentados tax over certain notarial Deeds like New Build Declarations (since November 2018 the bank pays the AJD tax over the guarantee value of the mortgage)
- Oficina Liquidadora: Presenting Deeds to Oficina de Liquidadora with proof of payment taxes
- Patronato: Application name change IBI and Plusvalia tax bill (seller) through Patronato de Recaudacion
- Land Registry: Inscription in Land Registry (potentially with translation nuptial agreement, depending on your nationality)
- Cadastre: Inscription of purchase of property in Cadastre
- Capital Gain Tax: Payment of the retained 3% Capital Gain Tax (if the seller is a non-fiscal resident in Spain) in name of the seller
- Service contracts & direct debits: Name changes of service contracts & setting up direct debits from Spanish bank account: electricity, water, IBI council tax, basura / environmental tax, community of owners, etc. (With new build properties for this a boletin report of an electrician and plumber is needed. This can take several weeks.)
- Plusvalia: If the seller is a non-fiscal resident in Spain, then the lawyer of the buyer will retain an estimation for the Plusvalia (local Capital Gain Tax over the increased value from the ground over the years), apply for the bill at the Town Hall and pay for it plus making the balance for the seller
- Capital Gain Tax: See the paragraph below for more information about the 3% retention of the Capital Gain Tax for non-fiscal resident sellers.
- Retentions seller: Balance of retained amounts by the lawyer (for example for the DAFO (countryside) or other negotiated procedures) based on the final bills. This point is not of relevance to the buyer.
- Rental license: Potential application RTA (urban) or vivienda rural (rustico) rental licence (in many cases it´s necessary to ask for a copy of the First Occupation License at the Town Hall of have a new on made, as this isn´t part of the standard legal requirements for a purchase)
- House insurance: Activation of house insurance from day 1 (especially in the countryside)
- Spanish will: Signing Spanish last will at the notary to appoint your national inheritance law and heirs of your Spanish belongings
- Final balance: The lawyer will hand over all official documentation and bills with a balance of all costs
For the transfer of existing contracts of internet, phone, television and specific cases as surveillance you best can contact your real estate agent or the seller.
Normally the lawyer takes care of the transferring of the existing service contracts for (if applicable):
- IBI (local property tax)
- Basura (environmental tax)
- Comunidad / Community of Owners
- Parking exit tax
- Gas (only for fixed network supply so not the bottles)
Of course he also arranges the setting up of the attached automatic direct debits from the Spanish bank account. Ask how things are arranged with TV, internet and phone, especially in the country side.
For satellite TV and for internet through radio signal or mobile phone signal it´s advisable to first check the reception at location. No satellite possible or too expensive for normal TV? With an internet speed of 10 MB the online TV-service of Netflix is also a fine option. Also with a Spanish contract you can choose for English language and subtitles.
The 3% Capital Gain Tax retention seller
Is the seller a non-fiscal resident in Spain? Then by law the buyer needs to deduct a 3% retention over the escritura (deeds). This is an obliged down payment for the national Capital Gain Tax of the seller. The law says that this tax retention needs to be paid to the tax authority within 4 months after completion. After this the seller is still obliged to do the rest of the declaration with the tax office.
Is there no profit between the prices in the purchase and sales deeds (minus deductions)? Then the seller can ask back for his money. However there are administration costs involved for the procedure and it will take many months.
The Spanish government created this rule to avoid non-residents to leave Spain without paying taxes. Be aware: the 3% rule for the buyer only concerns a retention / calculation. This amount aren´t his costs and doesn´t affect the purchase price.
Don´t forget to arrange a good home insurance from day 1 after completion. This is especially important for the country side, as you officially aren´t allowed to rebuild your property after damage or fire.
- Ask for an offer of the insurance at least one week before completion at the notary. Once the signature is placed, you then only have to send a notification for activation.
- Don´t count on the insurance of the Community of Owners in an apartment block. In Spain these cover less then in Northern Europe.
- There are brokers that offer insurances on commission base like banks or gestors. This can be interesting if these professionals can also help you with the communication in case of a claim.
- After completion at the notary, don´t forget to have your locks changed, for obvious reasons.
Tip: Save money, save bills with proof of payments
Just bought a house? Then save all official bills and invoices plus the proof of payments (bank statements). This can be for:
- Legal fees lawyer
- Bill notary
- Costs Land Registry
- Payment transfer tax and AJD/IVA
- Architect costs and reports
- Costs for the DAFO
- Bill for septic tank
- Official bills for renovations (that increase the worth of the house)
- Commission real estate agent (when selling)
If you´ll ever sell, then these costs are deductible from the Capital Gain Tax over the profit (official purchase price minus sales price minus deductions x 19%. Savings tip: the bills officially are only deductible in combination with proof of payment. Print them right away, as you don´t know if this will be easy in so many years.
Need a referral for a good estate agent in Andalusia? Or like to to receive an example offer for the legal investigation of a specialised and independent lawyer? Find out more through link above.
©2020, Ariane van Wijk