The purchase contract
A simple question… Would you purchase a property in your home country without using a lawyer? Then do not do it in the Canary Islands! It will prevent any future problems you hear of in the style of ‘holiday homes from hell’.
It is suggested you find your own lawyer independent of your agent & seller, after all, your lawyer should be looking after your interests & no one else’s! Many lawyers speak English, they advertise in local press so are easily found, it is accepted to ask for a quote also.
The purchase contract for a resale property in the Canary Islands will contain details of the vendor and purchaser, the purchase price and method of payment. It will also confirm that the Escritura de Compraventa (Title Deed) is in the name of the vendor and that this will be passed to the purchaser on completion of the sale. It will also guarantee that the property itself will be transferred free from all encumbrances and rights of third parties and will state who is liable for taxes & fees involved in the transfer. There will also be stipulations regarding penalties for non-fulfillment of the contract.
The purchase contract for a property still being built (off plan) will contain similar details and normally further information regarding ownership of land, building permissions, completion dates and the setting up of a community, etc.
Often contracts are written in English and sometimes they are in Spanish with an official English translation. Your estate agent should go through the contract with you and clearly explain any details that you are not sure of.
If you are not sure of any clauses in the contract, or have doubts about the fairness of the stipulations in the contract, then do not sign it.
You can still pay a holding deposit to secure the property and let your legal advisor vet the contract before you sign.
No reasonable developer will refuse to refund a holding deposit should a solicitor find any legal reason why you should not proceed.
Good estate agents will only deal with reasonable and reliable developers.
-----------------
Legal procedures on buying
All property sales and purchases in the Canary Islands must be registered at the land registry and the Title Deed (Escritura de Compraventa) must be prepared by a public official called a Notary. Both the seller and the buyer then sign this deed in the Notary’s presence.
A Notary is a lawyer who has had special training and passed extra examinations to qualify him for his special duties, which cover a large range of legal matters. Apart from dealing with all property transactions, he sees that Spanish wills are properly signed, witnessed and registered, authenticates important documents and certifies due service of legal notices. He is a very important official.
The Notary is responsible for seeing that the conveyance deed is drawn up correctly and fully describes the property and that the agreed declared purchase price has been paid to the vendor in the appropriate currency. He witnesses the signing of the deed and collects the fees and taxes. The deed is then sent to the Land Registry Office where the name of the new legal owner is registered.
It can take some time before the title deed comes back from the Land Registry Office, and in the meantime an authorized copy is given to the purchasers.
If you have agreed to buy when on holiday and do not wish to return for the signing of the deed, you should appoint a lawyer independent of your agent (to protect your interests) to appear before the Notary and sign on your behalf. This person must be officially appointed by a deed which in England is called a “Special Power of Attorney” or in Spain, an “Escritura de Poder de Compraventa”. The Notary can prepare this deed as soon as you have agreed to buy and normally would be in the name of your lawyer who is doing the conveyancing for you.
--------------------
Fees and taxes
There are many factors that enter into the calculations of these fees and taxes but as a general rule of thumb, if you allow 8% to 10% of the purchase price you will not be far out.
Included in this is the lawyer’s fee and this will generally depend on how much time and work is involved in any particular purchase. These fees can vary greatly between one lawyer to another and not always will the final bill be what was originally estimated.
There are taxes and two fees payable on all transfers of Canary Island properties.
The Notary is entitled to a fee for preparing the Escritura, and there is a further fee for registering the property in the new owner’s name.
There is a document tax of 0.75% plus a local tax (I.G.I.C.), which is at present 5% of the official value if you are purchasing a new property from a developer, or a 6.5% transfer tax if you are purchasing a resale property from a private owner.
There is also a tax on the increased value of the land known as Plus Valia, which is levied at various rates on the annual increase in value since the previous sale. Plus Valia tax is and always has been the responsibility of the vendor, although custom in the Canary Islands has been that this tax is paid by the buyer to pay because in the past it has often been many months, or even years before the amount of tax due could be advised by the tax office.
Try to get the vendor to pay as by law they should. The actual amount of tax payable is not determined as a percentage of the property value or the declared purchase price, but is calculated on the increase value of the land that the property stands on; from the time the previous owner purchased it until the time he sells it.
It is now much quicker to establish the tax due and a clarification of the law in 2008 made it illegal for developers to pass on this liability to buyers of their properties. Consequently, it is for your legal adviser to ensure that when completing your purchase from a developer, that they pay this tax.
For further instructions that are clear to understand follow the LINK
A simple question… Would you purchase a property in your home country without using a lawyer? Then do not do it in the Canary Islands! It will prevent any future problems you hear of in the style of ‘holiday homes from hell’.
It is suggested you find your own lawyer independent of your agent & seller, after all, your lawyer should be looking after your interests & no one else’s! Many lawyers speak English, they advertise in local press so are easily found, it is accepted to ask for a quote also.
The purchase contract for a resale property in the Canary Islands will contain details of the vendor and purchaser, the purchase price and method of payment. It will also confirm that the Escritura de Compraventa (Title Deed) is in the name of the vendor and that this will be passed to the purchaser on completion of the sale. It will also guarantee that the property itself will be transferred free from all encumbrances and rights of third parties and will state who is liable for taxes & fees involved in the transfer. There will also be stipulations regarding penalties for non-fulfillment of the contract.
The purchase contract for a property still being built (off plan) will contain similar details and normally further information regarding ownership of land, building permissions, completion dates and the setting up of a community, etc.
Often contracts are written in English and sometimes they are in Spanish with an official English translation. Your estate agent should go through the contract with you and clearly explain any details that you are not sure of.
If you are not sure of any clauses in the contract, or have doubts about the fairness of the stipulations in the contract, then do not sign it.
You can still pay a holding deposit to secure the property and let your legal advisor vet the contract before you sign.
No reasonable developer will refuse to refund a holding deposit should a solicitor find any legal reason why you should not proceed.
Good estate agents will only deal with reasonable and reliable developers.
-----------------
Legal procedures on buying
All property sales and purchases in the Canary Islands must be registered at the land registry and the Title Deed (Escritura de Compraventa) must be prepared by a public official called a Notary. Both the seller and the buyer then sign this deed in the Notary’s presence.
A Notary is a lawyer who has had special training and passed extra examinations to qualify him for his special duties, which cover a large range of legal matters. Apart from dealing with all property transactions, he sees that Spanish wills are properly signed, witnessed and registered, authenticates important documents and certifies due service of legal notices. He is a very important official.
The Notary is responsible for seeing that the conveyance deed is drawn up correctly and fully describes the property and that the agreed declared purchase price has been paid to the vendor in the appropriate currency. He witnesses the signing of the deed and collects the fees and taxes. The deed is then sent to the Land Registry Office where the name of the new legal owner is registered.
It can take some time before the title deed comes back from the Land Registry Office, and in the meantime an authorized copy is given to the purchasers.
If you have agreed to buy when on holiday and do not wish to return for the signing of the deed, you should appoint a lawyer independent of your agent (to protect your interests) to appear before the Notary and sign on your behalf. This person must be officially appointed by a deed which in England is called a “Special Power of Attorney” or in Spain, an “Escritura de Poder de Compraventa”. The Notary can prepare this deed as soon as you have agreed to buy and normally would be in the name of your lawyer who is doing the conveyancing for you.
--------------------
Fees and taxes
There are many factors that enter into the calculations of these fees and taxes but as a general rule of thumb, if you allow 8% to 10% of the purchase price you will not be far out.
Included in this is the lawyer’s fee and this will generally depend on how much time and work is involved in any particular purchase. These fees can vary greatly between one lawyer to another and not always will the final bill be what was originally estimated.
There are taxes and two fees payable on all transfers of Canary Island properties.
The Notary is entitled to a fee for preparing the Escritura, and there is a further fee for registering the property in the new owner’s name.
There is a document tax of 0.75% plus a local tax (I.G.I.C.), which is at present 5% of the official value if you are purchasing a new property from a developer, or a 6.5% transfer tax if you are purchasing a resale property from a private owner.
There is also a tax on the increased value of the land known as Plus Valia, which is levied at various rates on the annual increase in value since the previous sale. Plus Valia tax is and always has been the responsibility of the vendor, although custom in the Canary Islands has been that this tax is paid by the buyer to pay because in the past it has often been many months, or even years before the amount of tax due could be advised by the tax office.
Try to get the vendor to pay as by law they should. The actual amount of tax payable is not determined as a percentage of the property value or the declared purchase price, but is calculated on the increase value of the land that the property stands on; from the time the previous owner purchased it until the time he sells it.
It is now much quicker to establish the tax due and a clarification of the law in 2008 made it illegal for developers to pass on this liability to buyers of their properties. Consequently, it is for your legal adviser to ensure that when completing your purchase from a developer, that they pay this tax.
For further instructions that are clear to understand follow the LINK
Last edited by Gypsy on Sat 13 Oct 2012 - 9:24; edited 1 time in total
i stay in los cris with the rest of us poor swallows.
