Conveyancing in Tenerife: In our assistance and conveyancing with the purchase of real estate in Spain, checking any debts on the real estate is a very important part of our work. In Spain and the Canary Islands you can take over debts on real estate, these are not automatically cleared when sold. Dramatic stories that you sometimes hear in the news usually have the origin that this has not been checked and that the buyer has not been assisted by an independent consultant. Or worse, that malicious intent was involved.
Buying real estate with a mortgage is still possible, you can even take over the mortgage, but this is not recommended. If there is still a mortgage on the property, this must also be settled after the deed has been signed. The settlement of a current credit can take some time, as the bank must be repaid, after which a deed must be executed again to remove the mortgage from the Register. It goes without saying that we will check and follow up on this for you!
Furthermore, it should also be checked that the seller has paid all other current bills, being water, electricity, the comunidad (if applicable), basura (garbage collection) and the IBI/SUMA (cadastral income – council tax). As a buyer you need to be sure that you are buying completely debt free, or that the debts are deducted from the price you pay to the seller!
A municipal capital gains tax must be paid by the seller when selling his real estate, but it is the legal obligation of the buyer to actually pay this to the government if the seller is a non-resident. So it is important to know in advance how much this is as this sum is deducted from the price. The capital gains tax is therefore not settled at the notary but later through the municipality. You will deduct this amount from the purchase price and Seb Leeson Consulting will pay this for you to the appropriate government authorities.
If the seller is not a tax resident, 3% must be deducted from the sales price. Again, the obligation to pay this to the Spanish tax authorities lies with the buyer. This is also not settled at the notary but by Seb Leeson Consulting at the competent authorities.
Usually you will have already paid 10% to us or to the seller’s representative as a deposit for the purchase of the property. There is still the balance to pay for the actual purchase. This can be done in several ways, which we will briefly explain here:
In order to have us set up the direct debits for all your recurring costs, like water, electrics taxes etc, you will need to have a EURO account within the SEPA system of the European Union. Some banks will offer this, but we have experienced problems with Polish, Czech and Swiss banks so it is best to opt to have a Spanish account if you do not already have a full euro accounbt in a european country. A number of obligations will still have to be fulfilled. The advantage of the Spanish bank account is that you can keep everything neatly separated, the disadvantage is that the Spanish bank accounts are simply not cheap and all kinds of commissions are asked for.
In order to open the bank account, you will need to provide the following: