There is absolute freedom on deciding how to negotiate and draft such clauses. To put an example of what a lawyer can do for a buyer at this stage. Think for example of substantial commercial property in the millions on a high street in Madrid or Barcelona. The inclusion of such a clause could save a buyer several hundred thousand euros if the deal falls through for lack of finance. If a buyer decides to rescind the agreement he forfeits the down payment.
A buyer has no right to claim it back. Likewise a vendor opting out will be forced to handover a sum of money equating to the deposit. This deposit is deducted in full at completion and forms part of the price. If the buyer opts out he forfeits the down payment in full. However should the vendor opt out he will be forced to pay double the holding deposit. This clause is applied restrictively and obviously benefits a buyer more than a vendor.
This will not technically be an escrow account, unlike in the United Kingdom, but nonetheless lawyers are legally bound to withhold the amounts safely until completion at no extra cost to the parties.
Option to Buy Agreement : a buyer may be interested in having an option to buy the property. A vendor, on agreeing, commits himself to sell the property within a pre-agreed time frame to the buyer. If the buyer exercises his option it is deducted from the sales figure at completion. Should the buyer decide not to go ahead with the purchase and exercise his option he forfeits in full the down payment he made.
The third and final phase is to complete before a Notary Public. The two previous steps have set the stage leading to this crucial moment. All associated taxes i. This goes to explain why a property takes several months to be registered. Registration grants protection erga omnes against third parties ; the strongest type of public protection available.
Spain is divided administratively into seventeen Autonomous Communities. The state has empowered communities by devolving tax competencies. Devolution implies communities hold full competence to rule on certain tax aspects and accounts for regional tax variations from one Autonomous Community to the next.
As a word of caution, sound legal and financial advice should be sought to obtain a tailored breakdown of all taxes and expenses incurred by a buyer given their own personal circumstances. The following is a simplification of the tax liability borne by a buyer on acquiring commercial property.
Besides paying the above taxes, a buyer is bound to pay the following fees:. A property normally takes two to three months to be registered at the Land Registry. A buyer can ensure everything is above board on requesting a Nota Simple. I would advise requesting one only after three months have elapsed since completion. Utility companies do not accept overseas payments and like setting invoices as standing orders against your Spanish account.
You should set at least as standing orders all the following:. Usually quarterly but can vary. You are also liable to file Income tax on owning property in Spain every year for which you may need to appoint Fiscal Representation in Spain. Finally, on owning property, I cannot stress enough how advisable it is that you make a Spanish Will to dispose of your Spanish estate. This will not preclude any other made in your home country and is limited exclusively to your Spanish assets. It will save your beneficiaries time, money and hassle at a time of bereavement.
Commercial, Rural and Distressed property are all but specialities of buying Resale property in Spain. I write separate articles on all four because each one sports its own unique nuances which I reckon ought to be fully dissected and explained. I regard Off-Plan property as a different animal altogether that requires its own space as it introduces multiple unique key concepts which are not shared by its resale cousins.
Hiring a reputable lawyer is highly advisable to ensure, as much as possible, a smooth conveyance procedure. Property purchase can quickly turn into a minefield without someone qualified to guide you through the pitfalls safely. American 16th US President — He steadfastly ensured a pro-union victory and brought about the emancipation of slaves. We will be very pleased to discuss your matter with you. This is sometimes as part of their plan to open a business in Spain and it is sometimes as a straightforward investment.
You can get a quick overview of buying real estate for your business in Spain by watching this video interview below with Spanish lawyer Miguel Manzanares.
Learn more by scrolling down and reading the detailed guide he has written with us. Probably the most significant disadvantage of buying property is inflexibility. If you want your business to double in size quickly it will be much more difficult and expensive selling your property and buying another than it would be finding another place to rent.
The advantages and disadvantages of renting are the flip-side of the advantages and disadvantages of buying! Location is as important for commercial buildings as it is for residential buildings: possibly more so.
The price you will pay for the building can vary dramatically depending on its location. For example, a shop on a main shopping street or beach-front location in Marbella can be five times as expensive as a shop in a second- or third-level location. Do you have a requirement to be in a particular place?
If not, you can save a lot of money by choosing a place only a few hundred metres away from the prime location — and often get the side benefits of easier access and more available parking.
Most of the larger estate agency firms in Spain deal with commercial as well as residential property. A contract for the purchase of commercial property is likely to be more complex than a contract for the purchase of a house and so, unless you are very experienced and your Spanish is fluent, you would be foolish not to use a lawyer to assist you. You will also need to find all of the cost of improvements, repairs and redecoration and the legal and other fees involved in buying the property.
If you are new to Spain — for example, if you are moving to Spain for the purposes of setting up a business — finding a bank to lend to you can be difficult to the point of impossible.
See below. The legal fees and taxes payable will depend upon its price, size, type and location. Your lawyer will be able to give you an estimate early on in the process. If you have only just arrived in Spain and have little or no experience in this type of business, you will probably not be able to obtain a mortgage at all.
Mortgages on commercial properties are usually from years in duration. The norm is about 15 years. To be granted a mortgage you will have to provide extensive details about yourself even if the property is being bought through a limited company and you will have to produce a business plan showing that you can afford to repay the mortgage and your accounts — typically for the last three years — showing the way your business has performed. Until the crash of , banks were prepared to take a flexible approach to people who had only recently arrived in Spain but who had comparable experience with businesses elsewhere.
This is now less common but there are still situations in which a bank will lend you money to buy a commercial property in Spain even if your business is new. There are few mortgage brokers operating in Spain but if you can find a good one it can make your life a lot easier. Obviously, this all depends on your particular case but there is a general rule of thumb that says that the overall cost of buying a property — mortgage, legal expenses etc — will be higher for the first five years that you own it than you would pay by way of rent.
For the second five years, the figures will probably be pretty much the same. For the third five years and beyond, ownership will probably be cheaper than rental. Recently, any property investment — including investment in commercial property — has been a bit of a roller-coaster ride.