Cunningham Advices bank account details are the following where the provision of funds to the above amount must be transferred.
To: Cunningham Advices
Bank Entity
CAM – CAJA DE AHORROS DEL MEDITERRANEO
Account No
2090-70660-93-0084078146
Swift Code
Address
Calle Mayor, No 7 – Bajo. Guardamar 03140
Alicante
The amounts are expenses involved in the purchase of a property. Thus it is very important to provide us with the funds (after the date with the Notary) in order to pay on your behalf all the expenses and overall the taxes.
It is possible to pay in an alternative way. If you need further details regarding this please let us know.
4. COMMENTS
Concerning the Power of Attorney, this is recommendable if you think you will not be able, or you do not wish to come to sign the Property Title Deed at the Notary’s Office.
We will do so on your behalf and the fee is 141.00 euros, approx £97.00, vat inc.
5. THE FISCAL OBLIGATIONS : THE FISCAL ADVISOR
Congratulations again, you are owner of a property in Spain.
Spanish fiscal Authorities have competence in order to tax your property in Spain.
This legal procedure comes from C.D.I. This is an agreement between the two countries involved, which ensures that the purchasers only pay one set of tax and solely in the country where they have purchased their property, (in this case, Spain).
Spanish Law allows to non-residents to choose a Legal and Fiscal Advisor who can act as a representative for all legal matters and questions they may have.
Your obligations here as a non-resident are a local tax, and two general taxes, which are included on a form.
All of these taxes must be paid annually.
The local tax must be paid between July & September every year.
We will arrange on your behalf for paying it by direct debit through your current account here.
We will send to you the information related to the tax before paying it.
The other ones are rent and patrimonial taxes. They must be paid the year after the current fiscal one. The rent income tax will be 0.5% over the “catastral value”, which is the value that the local authorities give to your property each year. The Patrimonial tax will be 0.2% over the purchase price included on the Title Deed.
Annually we will inform you, between October and November, about the details and amounts involved in the rent and Patrimonial taxes that you must pay. We will send you this information in or order to charge you these taxes and our annual fees by direct debit.
Our annual fees will be 200 euros inc vat in the case of one person, or 150 euros inc vat if you are a couple.
6. ANNUAL EXPENSES
These amounts are an average; they are expenses in approximation as they depend on each individual property.
Community of Owners Fees: It depends on each community, but it can be around 240.00 euros (£165.00) per year
Electricity Supply: It is paid every two months and it is paid by direct debit. It costs a minimum of 21 euros without any consumption. (Over £14.00)
Water Supply: It is paid every three months and the minimum amount will be around 15 euros without any consumption. (Over £10.00)
House Insurance: It will depend on your property and in your own interest. It will be paid annually.
This is the whole process for buying a property in Spain. We thank you for relying on our services, and do not hesitate to contact us regarding anything else you may need.
OTHER LEGAL ADVICE
Capital Gains Tax
Although in Spain theoretically on the sale of a property you should have to pay 35% of the net price increase (the difference between the price at which you buy the property and the price at which you sell), in reality this never normally happens.
The net price increase is the increase in the DECLARED value of the property (with the Spanish Property Registry office) and not the difference between your buying price and your selling price.
For example if a resale property is bought for £100,000, depending upon the age of the property it could be declared at as little as half this e.g. £50,000.
If one year later it is then sold (say for £120,000) then the declared value must increase by a factor dependent upon the area and the kind of property (the Lawyer will take charge of this) but it could be by a marginal amount , as little as £53,000.
In this case Capital Gains Tax would be paid on the increase of £3000 and not on the actual difference in buying and selling prices (£20,000).
This is the situation at the moment but if you were worried that in the future it may change and the Spanish Authorities tighten up their practices then it would be in your own interests to have the property you are buying declared at its full price - if the property is a new build this normally happens automatically though occasionally it could be declared a little lower, 80% say.
On a resale property however it has to be agreed between buyer and seller and in the current ‘sellers’ market’ it is unlikely that the person selling will want to declare at 100% and incur maximum Capital Gains so you will undoubtedly not achieve 100% when buying a resale property.
Also note that if you become a Spanish resident, the rate of Capital Gains Tax drops substantially and is calculated on a sliding scale depending on the property value up to a maximum of 35%.
A little bit confusing at first because it is very different to what happens in the UK.
To conclude, the current level of Capital Gains Tax that is paid when you sell a property in Spain is much lower than most of us imagine.
Please Note: This is not a legal document and its contents are to be used as a guide only.
