November 10, 2008 at 9:09 pm #54472
Hi, could anyone answer a few questions. We bought a house in 2003 and have now finally found a buyer (hooray!) Both my and husband’s names are on the escritura as the owners, however when we bought we were not married and now we are.
Given all the experiences on this site, I’m hoping someone knows the answers to these questions?
Do we both need to actually go to spain to sign papers to authorise the sale, or can my husband do this on his own? Do I have to give him power of attorney?
The purchasers have asked us (via the agent) if we want to proceed by taking a deposit or by ‘compra venta’ – anyone know what this means?
We have €29k left on our mortgage, when the sale completes what would be the best (cheapest and safest!) way to transfer the balance in euros to the UK in sterling?
Do we need to ensure our ‘wealth tax’ is paid up, I don’t think we’ve paid any so far?
Many thanks in advance,
Michelle & Tim
November 11, 2008 at 2:40 pm #87626
To answer some of your questions …..
“Do we both need to actually go to spain to sign papers to authorise the sale, or can my husband do this on his own? Do I have to give him power of attorney? “
I’ll leave this to more experienced people but I see no reason why you couldn’t give PoA to your (now) husband. The fact that you bought the property when unmarried should be immaterial. What might need to happen (hopefully someone may know this) is that as you are giving PoA in your married name but the Escritura is in your single name, you may well have to get a notarised copy of your marriage certificate.
“……by taking a deposit or by ‘compra venta’ – anyone know what this means?”
I think that they mean that you can take a deposit (normally around 10%) and then move to the sale to receive the balance OR do you want to move straight to the sale, and only then does money change hands.
“Do we need to ensure our ‘wealth tax’ is paid up, I don’t think we’ve paid any so far? “
Normally, as part of the sale, you will be asked to declare that the property is free of all debts, charges, encumberences etc. So a good idea to make sure that Wealth Tax (Patrimonio), Income Tax (Renta) and the equivalent to their Rates (IBI) are paid up and you have the slips to prove it.
As you are not reinvesting the monies in a purchase of another property in Spain, you may well be liable for Capital Gains Tax.
Assuming that you are a non-resident, the purchaser will withold a percentage of the agreed price to pay directly to the Spanish Tax Man. This is to ensure that foreigners don’t run off back home without settling the Tax Liability. You will have to claim this back and I’m told that this can take a considerable time. If you can, persuade the notario to pay the withheld ammount direct to the Taxman on behalf of the purchaser via an ‘autoliquidacion’. This way you can ‘ensure’ the withheld ammount is paid and you should ask the notario for a copy of the form (Modelo 211) that shows its been paid.
Well that’s my input but there are far more experienced heads than me here.
November 12, 2008 at 10:31 am #87657
Hi Michelle & Tim
It would probably be best to appoint a solicitor to assist you as there will be various documentation to be prepared before completion takes place at the notary. Also the solicitor will take care of CGT returns and claiming back any of the 3% retention etc.
If you are not going to use a solicitor then you need to make sure in any agreement that the buyer pays all costs (excluding plusvalia tax). If not you as the seller will end up paying the notary costs!!!
Using a solicitor would mean neither you nor your husband need be there and it could all be done under a power of attorney. Completion dates in Spain are less than precise.
Always a good idea these days to try to get a minimum deposit as many deals do not reach completion – problems getting mortgage etc. But in many cases the estate agent tries to keep the reservation deposit if the deal falls through!
As regards banking you are flagged as extranjero and that means the bank will steal from you with mega commissions. If you do not negotiate the norm on overseas transfers is 0.5% with no max and you need to negotiate before the money goes into your account! One of the ways to avoid this mega charge is to have the proceeds of sale deposited with your solicitor who will not be paying tourist bank charges and then your solicitor can route the money on wherever for you. But again you need to be careful and make sure you only do this if you trust the solicitor or if they also have practising certificates from the law society of England & Wales.
Regarding Forex companies the only company I ever recommend is Travelex – they are the largest and most reliable.
You need to make sure you are up to date with IBI, basura, management fees, utilities before completion but income and wealth tax will only become an issue if you are claiming a refund on the 3% CGT retention.
If you decide to instruct a solicitor negotiate on the legal fees and make sure you agree what’s involved etc (i.e. does it include filing CGT return etc). If you want send me a PM and I will recommend reputable firms/individuals.
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