What should I know before buying a house?
Buying a home is the most important investment in the lives of most citizens, so if you are thinking of acquiring a property, do not hesitate to consult with CEA's lawyers and, above all, do not sign any document without first counting with the right advice, especially before the delivery of money, even in the form of a down payment.
We summarize certain aspects to take into account:
I. Preliminary steps
Prior to the preparation of the public deed of sale , a private contract is usually signed between the buyer and the seller . The private document is not mandatory or inscribable in the Registry, but the law considers it a valid contract and obliges to comply with everything that is included in it.
Therefore, if you are going to buy a house, it is important to take proper advice before signing anything. Some important issues should be taken into account in the private document:
Who signs for the selling party. When a promoter sells, the administrator or attorney-in-fact of the company signs. If it is a sale between individuals, all owners must sign, and if it is a community or family home, both spouses.
State of loads of the house . It is essential to check if the house is free of encumbrances , if it has a mortgage , if there are liens on it, or if there is any limitation in the statutes of the community of owners . You can request a simple informative note directly from the Land Registry or do it through a notary's office. Sometimes you have to ask the city council for a certificate of urban legality in case there is some kind of affectation that does not appear in the Property Registry.
Community of owners fees. Before buying, make sure that the house is up to date with payments and expenses, since in certain cases the law requires the buyer to take charge of them.
Price. Clearly determine the price and payment method. Do not support setting a price below the actual price or pay amounts that are not documented. This is against the law and may harm you.
Arras . When you sign the private contract, an amount is usually given as part of the payment of the total price or “signal” known as a down payment that binds both parties. The most common are the penitential ones, which allow you to disengage from the contract before signing the deed. If it is the buyer who cancels the agreement, he will lose the amount delivered, while if the seller does, he will have to return twice the amount received.
If it is a home under construction, the buyer has the right to demand a guarantee for the amount delivered so that, in the event that the agreed deadline for the delivery of the property is not met, it will be returned together with the corresponding interest.
Expenses of the sale. If the parties do not agree to anything, or if they indicate in the contract that it is "according to law", the legislation of the competent autonomous community will apply. However, in the private document it is usually agreed who assumes the expenses including that all are paid by the buyer, except the capital gain that by law corresponds to the seller. If a developer sells, the buyer is prohibited from assuming expenses that by law must be paid by the seller.
II. The public deed of sale
The public deed is not mandatory to buy or sell a property, unless a mortgage loan is contracted to acquire it. However, the vast majority of citizens choose to go to the notary to do it for their reliability and legal security.
The public deed is reliable. The grantors of a sale declare before a notary their willingness to buy and sell and the conditions of the sale . The notary, public official, attests or authenticity to these statements in writing so that neither party may deny to the other what they have stated. The public deed is privileged evidence before the courts.
The public deed provides legal security. The notary is not limited to attesting. His professional performance provides legal certainty by verifying and verifying that the aspects included in the private document comply with the law.
In the act of signing the public deed, the notary:
- Check the identity, capacity and legitimacy of the seller and buyer.
- It exposes the state of loads that weigh on the house
- Confirm payment of community fees
- Request the proof of payment of the Real Estate Tax (IBI) and the cadastral reference number of the house to verify its correspondence with the seller's deed, warn the parties of the discrepancies and change the ownership of the next IBI receipts
- Notifies the parties of their legal obligations and especially the tax obligations arising from the sale
- Explain the distribution of the costs of the operation between the parties
- Manages, if the parties request it, the payment of the different expenses that the public deed entails.
III. Subsequent procedures
Once the deed of sale is signed, the following steps must be followed:
Payment of taxes and registration in the Property Registry . If you are going to personally carry out these steps, check with the notary public for the deadlines in order to avoid penalties or loss of rights. You can also choose to entrust its processing to the notary, who will proceed to send to the Land Registry an authorized electronic copy of the deed for registration. Subsequently, you will be given an authorized copy of the deed on official paper with all the supporting documents and invoices.
Supplies. Do not forget to put in your name the supplies that affect the new home.
Documentation and invoices. Keep all the documents, supporting documents, guarantees and original invoices regarding your purchase.
Don't accept global receipts; claim the original invoice from the notary, manager and property registry, as well as the tax payment letter.
IV. Expenses derived from the sale of a home
Notarial Minute : It is the invoice of the notary for his fees, set by the Government through a tariff. They are the same for all notaries.
Registry minute: It is the invoice from the property registrar for registering the deed; They are also established by the Government by tariff and are identical for all registries.
Minute management: It is the invoice of the manager when he performs the procedures. You also have the right to make them yourself or order them from the notary.
Municipal Tax on the Increase in Value of Urban Land , also known as Municipal Capital Gain . By law, it is paid by the seller, who can find out the amount by informing the town hall to which the property belongs.
Other taxes: By law the buyer pays them.
VAT : For a newly built home you will have to pay 10 percent VAT on the sale price. If it is another type of property, the VAT is 21 percent.
AJD: If it is a newly built home, you must pay the Documented Legal Acts (AJD) tax , the rate of which varies depending on the autonomous community between 1% and 1.5%.
TPO: If the home is second-hand, you will have to pay the Property Transfer Tax (TPO), whose rate varies according to the autonomous community between 6% and 10%.
Personal income tax : Finally, the seller must take into account the capital gain in his personal income tax, which can be up to 27%.