This value often differs, sometimes substantially, from the actual purchase price. This value needs to be ascertained in advance to avoid unpleasant surprises.
For example, a buyer may be purchasing a property that is distressed at well under market value, for argument’s sake 250,000; however, the fiscal value may be 350,000.
This has the potential of creating additional tax on the 100,000 difference if not attended to in advance.
Ricky: Are there particular differences in the way that purchases are completed in Spain in relation to other countries that you can highlight?
Jaime: We are often asked if property can be purchased leasehold in Spain. Whilst this is fairly common in the UK, it is relatively rare in Spain.
Ricky: Would you advise a client to use a real estate agent, as well as a lawyer?
Jaime: A major part of any transaction is the reduction of risk. This includes ensuring that there is value in the property that you are buying that is consistent with your requirements.
As lawyers, we handle the legal aspect of the transaction, but ultimately we are not real estate agents and we cannot decide whether the price that is being paid for the property is fair value given its characteristics, location and the purchaser’s needs.
A professional and trusted real estate agent can provide this service. This will add value to any property transaction, by ensuring that you are purchasing the right property at the right price.
Ricky: At what stage would you recommend that a client involves a lawyer in the transaction?
Jaime: It is imperative that a lawyer is involved as soon as you have decided on a property and intend to proceed with the purchase. Absolutely no agreements should be made, especially in writing, before a lawyer has verified the proposed contract.
Any document that you sign in Spain that has been incorrectly drafted could work to your detriment. For example, any conditions or terms—that you may have included in order to protect yourself—may not be valid under Spanish law and thus not enforceable.
Ricky: Finally, Jaime, how do you see the future of the Spanish property market?
Jaime: Despite the fluctuation in prices over the past years, Spain remains one of the top destinations for international clients wishing to purchase a holiday home or relocate to a warmer climate.
As a result, there is always a demand for property in the Costa del Sol and Costa Blanca.
Currently, properties are priced competitively and clients are looking to take advantage of this.
There is no doubt that Spain will remain an attractive location to purchase property for years to come.
If you would like any legal advice regarding buying or selling a property in Spain, Jaime Montoro can be contacted by telephone on + 34 951 31 97 55 or by email : email@example.com.
Alternatively, please visit BSA-Law in Spain at www.bsa-lawinspain.com.