After the purchase

After the notarial deed of transfer has been drafted, you, as a buyer,

still have a number of matters to arrange, such as:

• Paying tax for acquiring the plot of land.

• Applying for the description from the Land Bank of the municipality.

• Possibly payment Plusvalia tax, a municipal tax that is levied on the presumed value increase of the land (the value of the total immovable property minus the value of the buildings erected on it) since the last transfer.

• Requesting the description from the Land Registry Office.

• Registering with the public utilities companies for the supply of electricity, water, waste collection and telephone connection.

• Possibly applying to a local Owner’s Association.

The first two items can be handled by the civil-law notary. All the other things you have to arrange yourself, or we can arrange this for you.

• Beneath an example of all costs when buying a property.

Type	Unit	Amount	Payer	Receiver
Purchase price old (to determine gain tax)	once	150,000.00	Seller	Seller old
Purchase price	once	190,000.00
Estate agent's fee	3%	5,700.00	Buyer	LPV
Estate agent's fee	3%	5,700.00	Seller	LPV
Land acquisition tax	6,5 %	12,350.00	Buyer	Taxes
Notary	ca.	500.00	Buyer	Taxes
Registration, registry	single	250.00	Buyer	Taxes
Processing fee	single	100.00	Buyer	LPV
Value appreciation tax *	single	0.00	Buyer	Taxes
Capital gains tax**	0.03	5,700.00	Seller	Taxes
on account payment
Land registry registration	single	300.00	Buyer	LPV
IGIC Buyer	0.05	285.00	Buyer	LPV
IGIC Seller	0.05	285.00	Seller	LPV
Capital gains tax**		1,500.00	Seller	Taxes
remaining difference
Total
Buyer pays complete amount of		209,535.00
Seller receives net		178,315.00
Complete amount of taxes		20,600.00
LPV receives		12,370.00

* Must inquire of value appreciation tax (plusvaila) before purchase.

** Only non-residents: 3 % to be paid within four weeks as from notarial act. 

Tax declaration on 18 % of remaining difference of the entire capital gains has to be done within four months.

This estimate is only an example.

• The Plusvalia Tax is a tax set by the local authorities and based on the increase of the value of the land from the date the owner acquired the property to the time of the present sale.
  
  The local authorities determine the amount of plusvalía to be paid for each house purchase in Spain, depending on the area where the property is located. The market value or sales price of the property does not have an effect on the plusvalía tax.
  
  Normally, but not necessarily, the seller pays the plusvalía tax. However, this will depend on the sales agreement. The tax is calculated according to the ratable value of the property and the number of years it has been in the ownership of the vendor.

• NIE Number. (Numero Identificacion Extranjeros) and CIF numbers:
  
  NIE - roughly translated means Number Identification of Foreigner. The Spanish authorities issue these numbers to identify foreigners. You will need a NIE number for anything that requires payment to the Hacienda (Spanish Tax Authorities) or main Authoritative bodies.
  
  You can apply for the number at the local Police Station upon submission of a completed application form. When you receive your NIE number it will look similar to X-1234567-R and this is the usual format of the number. In simple terms it is an officially stamped A4 document with your name, date of birth and your NIE number.
  
  Once you have collected it from the Police Station, you should make several good photocopies and keep the original somewhere safe as if you lose it you will need to repeat the entire process again - there are no re-issues. It is not now necessary to take 2 passport sized photographs.
  
  You will need to produce your NIE number whenever you buy something or try to set up an account of some sort. Normally you will be asked to show the original with a good photocopy of which is retained and your original is then returned.
  
  Typical things that you will need to produce a NIE for :
   

• Work whether as an employee or self employed.

• When setting up a Telephone Account.

• When setting up an Electricity Account.

• To open a Bank Account.

• To buy a Car.

• When buying a Property.

 

© La Palma Vacant  2009