3. Essential documents for the purchase agreement in Spain.
In order to execute the corresponding public deed of purchase, as well as to successfully carry out the entry of the title of ownership at the Land Registry, the buyer must have a Spanish tax identification number, in force at the time of signature.
In the case of foreign buyers, the relevant document to be in possession of is the Foreig Identification Number (known as NIE, which is the “Número de Identificación de Extranjeros”).
If the foreign person does not have a NIE, there is the possibility to confer a special power of attorney in order to appoint a third person, who will carry out the entire procedure in order to obtain or renew the document. This power of attorney shall be written in Spanish and, in the event that this document is granted before a foreign Notary Public, shall be prepared with the apostille of the Hague Convention.
Meanwhile, the seller shall provide the following documents: the title of ownership, the energy performance certificate, the certificate of habitability (the so-called “cédula de habitabilidad“), the last property tax (“Impuesto sobre Bienes Inmuebles”) receipt and the certificate regarding the payments to be done to the owners’ community.
4. Further issues to be considered.
In general, all transmissions of real estate derive in the corresponding tax obligations. In this case, the relevant taxes to be paid will be the VAT (“Impuesto sobre el Valor Añadido”) and the AJD (“Actos Jurídicos Documentados”), or the ITP (“Impuesto sobre Transmisiones Patrimoniales”) depending on the fact whether it is a purchase of a newly built property or a second transfer of the same.
The seller shall pay the municipal capital gain (“Impuesto sobre el Valor de los Terrenos de Naturaleza Urbana” o “plusvalía”), based on the number of years during which the property has been owned by the seller, and the resulting amount of the profits or capital losses derived from the sale.
In addition to the above, in the framework of a real estate purchase it is highly important to request, from the corresponding Town Hall, a certificate regarding the non-existence of debts to be paid in relation to the property.
Finally, it is also advisable to carry out a study on the property to be bought, in order to verify the provisions regarding the rules set forth by the owners’ community, as well as the urban status of the property.