By Carlos Baos (Lawyer) • 16 March 2023 • 10:35
Image credit: pics five/Shutterstock.com
In today’s article we analyse some of the most unnoticed aspects of purchases, through a compilation of previous articles. You will find the complete articles in our website: https://www.white-baos.com/en/
Reference value and its new regulation. Legal Regulations. Its importance in Spain with the transaction with real estate assets: purchase, selling, etc.
The reference value is the value determined by the General Directorate of Cadastre and must be considered for the Transfer Tax and Stamp Duty (ITP y AJD). If when purchasing a property, the declared value or the value paid (for instance, €250,000) is lower than the reference value (€280,000) please note that the Spanish Tax Agency could review you tax declaration and request you to pay the difference.
Basic legal advice on mortgage loans to purchase properties in Spain
If you need to obtain a mortgage to buy a property in Spain, it is highly recommended to include a clause in the private purchase contract, reservation, etc stating that as a condition you place as a condition, the approval of the loan by your bank. So that if the bank ends up not approving it, the deposit paid will be reimbursed back to you. If not, you risk being taken before the Spanish Tribunals for a claim of breach of contract.
Right of preferential purchase of neighbours on rustic land in Spain. Right to acquire a rustic property sold to a third party.
Under the Spanish Civil Code, neighbours in rural areas and farm owners, when an adjacent land to their plot is being sold to a third party, have a preferential right to buy the land in the same conditions. The requirements are foreseen in art. 1523, one of them being that the land must not have a land area of more than one hectare, must not be separated from the adjoining property by streams, ditches, ravines, roads, etc.
The importance of the wording on a Purchase and Sale contract. Penalty clause vs “Arras Penitenciales” (Penitential Deposit).
Although both clauses have similar wording, their legal effects are very different. It is essential when buying or selling, to make sure that you receive expert legal advice, and that the wording of the agreements that you sign protect your rights and interests.
Criminal arras / deposit or penalty clauses are those for which there is agreed a penalty on how the buyer or seller shall compensate should they not fulfil the contract. But the clause does not mean or authorise any of the parties of the contract to terminate the contract unilaterally. This means that the party wishing to fulfil the contract, could enforce the agreement. On the other hand, the arras ‘penitenciales’ or penitential deposits, allow the parties to unilaterally terminate the agreement without the other party being able to force the fulfilment of the contract.
At White Baos Lawyers we are experts in conveyancing. If you have are interested on buying a property in Spain, please do not hesitate to contact us. We will study your case and offer you expert advice on the matter.
You may be interested in the following services and articles:
Registering a new construction with the land registry. Taxes: Spanish Stamp Duty. Habitual Residency Tax Benefit.
New Registry of Real Estate Agents in the Valencian Community. Everything you need to know. Decree 98/2022. Is it compulsory in all cases? Registration requirements. Real Estate Agents. Legal advice.
Compensation for delay in fulfilling a contract in Spain. Penalty clause. Claim for the potential rents.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
White & Baos 2023 – All Rights Reserved.
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