Property lawyers
in Barcelona and Tenerife

If you get a mortgage, you will become acquainted with an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. You will need to pay for the appraiser's work, usually between 300-500 euros. Note that the tasador by law is a licensed architect, so even if you don't need a mortgage, but have doubts about the structural integrity of the house, you might want to hire an appraiser.

The closing
The property transfer must be certified by a notary. The deed of purchase will be given to the buyer after the notary reads it and the parties present agree to the contents of the deed. The following must then be presented: proof of identity (or power of attorney) of both parties, the seller's title of property (a form that reports the investment to the Central Register), and the buyer's payment. The buyer and seller sign the contract; beneath their signature, the notary signs using his firma protocolizada and the deed is ready for taxes.

Taxes
For the buyer: transfer tax(impuesto de transmisiones patrimoniales) and stamp duty(impuesto de actos jurídicos documentados).
If the seller is an individual, the buyer pays a tax of 6% (7% in some regions) of the price specified in the deed. If the seller is a real estate developer and the building or land to be built on represents a first-time transfer, then the buyer pays VAT tax instead, meaning 7% for housing, 16% otherwise. If for housing, you have to add a stamp duty, in this case reduced to 0.5%, depending on the region (for Madrid it's 1.5%). Some special conditions apply for the Canary Islands.

For the seller: a local tax called the plusvalia (sometimes it is agreed that the buyer pays this tax).
With a copy of the deed in hand, the seller must go to the City Hall (or wherever local taxes are paid). After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property's valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia. It's best to ask at the notary's office about this payment.

Property Registry
You must register your deed at the local office. This guarantees that your ownership rights to the property are fully protected. (Some small towns don't have an office, some big cities have many -- check the original deed of the seller to find out which office corresponds to you). You will be charged a standard fee (about .4% of the first 6010 euros, going down to .02% for over 6,010,121 euros).

Extended example
Bob and Judy found an apartment in Barcelona and negotiated a price of 340.000€. The seller, Jordi, did not use a real estate agent. Bob and Judy signed a contrato de arras. The seller asked for a downpayment of 40.000€, a bit more than the usual 10%, but Bob and Judy didn't want to argue this point. They then went to a bank for a mortgage of 260.000. The bank offered them a variable-rate mortgage for Euribor + .50%, with no opening fee, no cancellation fee, and a first-year rate of 3.50%. Since Euribor was currently 2.31%, they saw that this would cost them an additional 1300€ the first year. They asked the bank to give them Euribor + .50% for the first year also, which the bank agreed to.

The bank requested the following documents from Jordi:

Once all of Bob and Judy's documents were presented, it took one week for them to be pre-approved. It took another 1 1/2 weeks for the bank to get an appraisal (tasacion) done on the property (no delays on Jordi's side in letting the appraiser in), and another 3 days for the bank to hear back from the appraiser. The appraised value was 413.000€, so the bank approved the loan. Bob and Judy went to the bank to sign the mortgage contract. They were also required to get property insurance (118€/year) and life insurance (which they got on Judy, since it only came to 178€/year for her). Bob and Judy confirmed that after a year they could cancel both policies (since Bob, in fact, already had a life insurance policy). They were also required to domiciliar a few things in the bank account. They called the gas, electric company, and nursery to have automatic withdrawals done through this account. The bank then gave them an estimate of what the mortgage payments would be, as well as a listing of the various retainers (provisión de fondos) that they would need to pay. The provisión de fondos appeared as follows:

The total at the bottom says 317.459€. Bob and Judy already paid 40.000€. Did this mean they actually had to pay 357.459€ in total? Yes, at least initially. The 10.128€ and 6.989€ are the retainers for fees that will need to be paid to the notary, the property registry, to the tax office (Hacienda), and to the gestor. The property purchase, the new mortgage, and cancellation of the seller's mortgage all have to be notarized and registered. This bank contracts a gestor to manage this and make the various payments. At the closing, the bank rep/gestor will tell you that they will send you the title for the property in 2 months (once it has been registered). At this time, be sure to ask the bank for all the notary, Hacienda, and Registry receipts. The bank must refund you the difference between these actual receipts and the retainer that was paid.

Then note the cancellation costs of 885€. Bob and Judy don't pay this. Their bank will charge this to Jordi. Jordi then complains to his own bank, "How come I have to pay this? You told me I had a 0% cancellation fee." His bank responds that this is not a cancellation fee. This is the cost to register the cancellation with the property registry (and all registry changes require a notary's signature).

The bank then charges 300€ to handle the life and property insurance forms. Jordi is a resident of Spain, so no 5% tax to nonresidents is withheld.

Bob and Judy transferred 57.459€ to the bank to pay the rest of what they owed. Four days later was the closing in Barcelona; 30 days in total from the day they presented the documents to the day of the closing. The closing went smoothly, though Jordi made a long face when he heard the property had been appraised at 413.000€. Jordi received the check from the bank rep and gave Bob and Judy the keys to the apartment. Two months later Bob and Judy received the title from the bank rep.

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