Community fees (Comunidad de Proietarios):

Many properites are situated within a Community of Homeowners. The Community takes care of a number of services within a development and the level of services will vary from place to place. Some of the factors that are commonly included are maintenance of the community gardens, lighting, security, building insurance etc. The Community will hold annual meetings during which a budget is approved by the Owners covering the expenses for the year. This budget is then divided between owners depending on the size of their property. The division is mentioned in the Title Deeds (cuota). The Community fees are normally paid half-yearly depending on the Community. It is important to try and attend these meetings and vote on any matters that may affect the Community or to make any suggestions.

Your Local Town Hall makes a charge to each property owner equivalent to Local Rates (Impuesto sobre Bienes Inmuebles or I.B.I.) The amount of this tax will vary depending on the assessed values (Valor Catastral) and is paid annually. In certain cases, discounts can be obtained for early payment or these charges. Your receipt of payment will reflect the amount you have paid, the year in which the receipt corresponds and the assessed value that year.

The Town Hall will also make a charge for the Rubbish collection (Basura) from your property or development. This can be charged annually or quarterly depending on the Municipality in which you are purchasing the property. In certain cases, this may be included in your community fees.

In certain municipalities, there is an annual charge for the Recycling Tax (Tratamiento de Residuos). This covers the recycling of waste from the numerous glass, paper, battery banks that are distributed throughout the area. Again in some cases, this may be included within the Community fee.

Most properties have electricity and water meters and you will be charged according to the amount of each consumed. Some communities will only have one meter for the whole development and therefore inlcude the water in the Community Fees.

These are the main expenses that a property will incur; however other charges such as telephone, alarm companies, gardeners etc. should also be taken into account. After you have completed the sale, it is recommended that you establish standing orders with your bank for the payments of many of these items. This avoids any possibility of non-payment and the related problems or surcharges, reconnection fees etc. Using the registration details (inscripcion) from the Deeds (Escritura), your Solicitor will arrange for a property search (Nota Simple) from the Land Registry (Registro de la Propiedad). This search will give the full history or the property, together with any mortgage charges, debts and any encumbrances on the property. This document would normally be applied for when you pay the deposit and again prior to completion.

Title Deeds (Escritura).

When you reach your completion date stipulated in your purchase contract, you will be required to pay the balance of the money and sign the Title Deeds in front of the Public Notary. The Notary is an official witness to the sale and will ensure that each party has sufficient legal authority to buy or sell the property. He will also inform you of the actual situation of the property in respect of any debts, charges or encumbrances. This information is supplied to the Notary directly from the Land Registry. The charge made by the Notary will depend on the length of the Title Deed and the price declared.

Taxes.

After you have signed the Title Deed you are required to pay taxes on the transfer of the ownership known as Impesto De Transmisiones Patrimoniales Y Actos Juridicos Documuntadios (ITP y AJD) (English translation - Tax on patrimonial transfers and legal documents act). If the property is a resale and privately owned, you are required to pay a 7% tax. Should you be purchasing a new property, or a property owned by a Spanish Company, you will pay 7% I.V.A. (VAT equivilent) plus 1% duty.

Land Registry

Once your Deeds have been collected from the Notary and the taxes paid, they can be presented to the land Registry (Reistro de la Propiedad) for registration. This process could take up to forty working days depending on the workload of the Registry. Should you not have received your Deeds after 3 months, you should contact your Solicitor in case of any problem.

At the end, your Solicitor will provide you with a detailed summary of the expenses and present you with all the original documentation. All of these documents should be kept safely as they will be required in the future should you wish to sell.

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