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Deed signing? Don't forget to settle.

Read here what to check and settle when you sign the Title Deed of the purchase with the Spanish Notary.

The moment of signing at the notary is the moment you have to settle everything.

You should always:
- look for all overdue payments.
- Calculate taxes to be paid by the seller.
- Retain all of these amounts when you are sitting at the notary.

A seller usually has no bad intentions.

In most cases it has to do with not being aware of their obligations. Possibly, it’s the aftermath of sloppiness when they bought.

Years after the purchase you can get a nasty surprise on the doormat.
The seller has the obligation to pay a local tax on the cadastral value of the land. The amount depends on the number of years that they were the owner. This local tax is called the "Plus Valia". You’ll need to know this amount and ensure it’s paid.

"But the seller was so nice. He had his hand on his heart and promised that he’d pay.
” If he does not, even years after purchasing, you can get a nasty surprise on the doormat.

The seller didn’t even know there was a balance to pay.
It’s generally only checked whether the last property tax assessment in Spanish, the "IBI", has been paid by the seller. This is not sufficient.

The next stage I check is the transfer. The seller had always paid his taxes. The seller didn’t even know there was an outstanding balance.
Maybe he just wasn’t paying attention when he bought and there was still a year of property tax outstanding from the last owner ...... with the increasing fines over 6 years!

This needs attention.
Is your vendor not a tax resident in Spain? That is to say, does he not pay any taxes to the tax office in Spain. If that is the case, the notary indicates that 3% of the purchase price should not be paid to the seller, but to the Spanish tax authorities.

The notary notes, he does nothing more. The notary notes the amount deducted does not pay it. 
You, or the office that settles your financial affairs, retains 3% and, within
30 days, must pay it to the Spanish tax authorities.

This may be expensive.
Your seller claims to be a tax resident. He demonstrates this with the wrong papers, in order to receive the full selling price. He leaves with the money to another country.

The failure to pay 3% of the purchase price, sooner or later, will have to be settled by you. This is where you have to be careful, because it can be so expensive.

This is pretty standard, but still pay attention.
When there is an owners association, or community, ask what monthly charges there are and whether payments are up to date.

Also, especially check for unpaid water and electricity bills as you could have problems. You will have to pay unpaid debts and could even have the service cut off.
This step is known to everyone but you have to be careful.

The moment of signing is the moment you have to settle everything.

Do you have a question?
Call: 0034 699775233
Mail: info@housesinspain.com

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