What do we do now?
Dear Sirs,
We bought our house here in Spain some 30 years ago, and for family reasons we find ourselves selling our home to move back to the UK.
We are residents here in Spain and have been for the last 20 years or so.
We have had a young family interested in the house for some time, but nothing seems to be moving forward, hence my question...What do we do now?
There are no estate agents involved.
ANSWER
If your prospective purchasers are interested in buying your house, I would assume that they would have instructed a solicitor to act on their behalf. Their solicitor and yours should be in contact to arrange all the formalities and exchange of documentation.
Usually, the first thing that is done, once the price has been agreed, is to sign a reservation agreement, where a consideration is paid in order to remove the property from the market. This consideration is usually in the region of 3.000 Euros.
A private purchase contract is then drawn up, where the terms and conditions of the sale are detailed, and a deposit is then paid. This deposit is usually the balance (including the reservation) making up to 10% of the sale price. However, both the reservation and the deposit can be any sum agreed by both parties.
When the completion date is reached, the balance of the purchase price is paid at the Notarys´
office when the deeds are signed. Since you are tax residents in Spain, you will be required to prove to the Notary that you are tax residents.
This is because if you were non-residents, the buyer would be obliged to retain 3% of the sale price and deposit this with the tax office on account of your CGT.
The Notary will need to see a certification from the tax office which certifies you are tax residents in Spain.
You or your solicitor must request this from the tax office well in advance of the completion date, as the tax office send it by terrestrial post and can take some time.
You may be obliged to declare the sale in your tax return the following year for Capital Gains Tax purposes.
The balance of the sale proceeds, may be with some money deducted. This would include the Plusvalía tax, apportionment of utility bills, etc.
According to the law, the local rates (IBI) is paid by whoever owns the property on the 1st of January, regardless of when it is sold. So if you complete the sale, on say, the 4th of January, you will be obliged to pay for the whole year. As this is a bit unfair, in some cases a private agreement is reached and this IBI bill is apportioned according to the period of ownership.
In the Valencian Community, you will need to provide the buyer will a valid Occupation Licence and the Energy Efficiency Certificate.
Since you may have done some extensions to the property during your long ownership, it is important that the correct description of any buildings are duly registered in the land registry, before completion of the sale..