Buying Spanish property, the last step

You have now purchased your home in Spain. You have a “place in the sun” Congratulations !!!

We want you to make the most of it!!

Welcome to Spain!

The following are the relevant aspects that you must take into account for the last step of your Spanish adventure.

1. NIE. Fiscal identification number for foreigners

This is the previous step that you must legally take during your purchasing process. It must be applied to the local Police Station or through the Spanish consulate or Embassy in your home country, when possible. Your lawyer can apply for the NIE in your behalf and this will prevent you from a waste of time, long queues and a headache with the Spanish administration.

You will need it for any administrative transaction and even to buy a car.

In our “SERVICES”  section you will find more information about this.

2. Open a bank account with a local bank.

We recommend that you have some information about the costs for all banking transactions in advance, including when you transfer money from abroad. Banks in Spain are NOT CHEAP!

We work with companies for exchange currencies and we will be talking about them in another article, explaining the reasons why this would be more advantageous for you, when you order a transfer from your bank at home, even if the transfer is made in Euros.

Most of your utilities, like electricity, water, telephone and periodic payments as Community fees as well as municipal taxes and so on should be paid by direct debit and you should receive immediate information from your bank.

When you are on the process to buy, as said in our previous article, you should know the approximate costs for everything that you will need and use, annually, monthly and quarterly. Therefore, you will know how much you will need to send and when in order to keep all the bills up to date.

To open a bank account in Spain is getting a little complicated nowadays. Your legal advisor will guide you with all the documents that you will need. Please note that you will go through a due diligence as legal requirement for banks (also for law firms and estate agents)  due to Money Laundering regulations.

You will open a “non resident” bank account if you do not have any intention to become fiscal and legal resident in our territory or if you have not applied for residence yet.

3. The land registry and taxes

Once you have signed the public deed of purchase with a Spanish notary or your lawyer has completed the transaction on your behalf, the title deed will be taken to the Andalucian tax office to pay the transfer tax.

The transfer tax varies from one Community to another within Spain. In Andalucia, there is a scale that goes from 8% to 10%, depending on the price. We will be writing an article about this so as to explain how it works.

Immediately after paying the transfer tax (or stamp duty if you bought a new property from a developer), the public deed will be taken to the land registry. The registrar will check and review all the documents presented with the deed. After a few days, or weeks, depending on the specific land registry, the public deed will be returned to the buyer or the legal advisor, and the new ownership will be registered as a public record.

4. Municipal authorities, the Town Hall

It is important that a specific form is submitted to the Town Hall in order to change the records from the seller to the new owner as well as the address for notifications and bank account where the taxes will be paid by direct debit.

The Town hall issues the property tax and garbage tax every year, normally in August. It is important to keep the payments up to date to avoid charge fines and interest if they are if they are not settled when due.

For this reason it is recommended that you use a different postal address for your correspondence, i.e. your law firm if they provide an administration service for you, especially if you do not come frequently, your property is difficult to find or there is no a reception service.

5. The utilities

All the suppliers’ contracts must be changed into the buyer’s name with the new bank account details. Electricity, water, telephone if needed, alarm and so on must be checked and changed.

6. Home Insurance

We recommend that you take insurance from a reputable company. We also recommend an insurance broker that you can always call in case of emergency and speaks your language.

7. Refurbishing or decorating your home

Please note that you should always have proper invoices for all your expenses in Spain, even though many of those expenses cannot be written off against your eventual Capital Gains Tax when selling.

However, in case that you are planning to make a major change in your home, including building or construction work, as long as you follow all the legal requirements, you will be able to deduct all the expenses, as long as they are invoiced properly, from your eventual profit in your final Capital Gains tax bill.

And for now on, ENJOY YOUR SPANISH HOME

 Information provided by Premier law 

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