Casa Nova Properties Service:

Properties on Majorca - Our Purchase Transaction Services at a Glance

Dear Client,

Our goal is to guarantee a simple, safe and straightforward purchase transaction in the interest of all parties involved. Therefore, below we provide you with a description of the services we offer:

Drafting of purchase agreements (with option to buy):
Once you have found your dream property, at CasaNova we draft a preliminary contract containing the personal details of the contractual parties, the land registry details, the purchase price, the amount of the advance payment and the dates for the execution of the sale. There are no specific rules to consider until the day of the appointment with the notary public, since it all depends on the will of both contractual parties. The parties are required to sign the agreement in order for the operation to be binding and withdraw the property from the market (this is crucial in the event of a prior sale, since otherwise the buyer will not be able to secure his/her dream property!).

Compliance with the EU General Data Protection Regulation of 25.5.2018 :
The processing of the personal data of the contractual parties is required for the entire preparation of the meeting with the notary public. Your consent will be granted to us upon signature of the purchase agreement with option to buy. Please be assured that your personal details will only be transferred to the people and authorities directly involved in the preparation of the meeting with the notary public (lawyers, bank, interpreter, notary’s office, Land Registry, owners’ association, where applicable). In addition, you have the right to receive information from us regarding all bodies to which your personal details have been transferred!

Payment of the purchase price:
The buyer undertakes to make an advance payment (at least 10% of the purchase price) within the period agreed either into a special bank account of the notary’s office or into the bank account of the owner, or proportionately to both parties. The remaining amount must be paid in a timely manner within the option term prior to the appointment with the notary public. It must be deposited into a

private bank account duly opened with a Spanish bank institution or into the account of the lawyer designated by the seller. Please note the following rules (pursuant to the Anti-Money Laundering Act), which must be mandatorily complied with: The transfer must be made from a private bank account of the buyer and indicate the reason for payment. The Spanish bank institution of the buyer is responsible for the issuance of the corresponding bank cheque before the appointment with the notary public. As a real-estate agent, we undertake to duly inform all parties of the amounts featured on the bank cheques and will be pleased to act as an intermediary with the bank.

Spanish Tax Number for Foreigners (NIE):
All real estate owners in Spain require an identification tax number. You can request your NIE either at any Spanish consulate or at any private service agency (e.g. notary’s office). Obviously, the fact that a foreigner obtains the NIE does not mean that this person is automatically subject to taxation in Spain. The NIE is simply a requirement to enter into any sort of agreement (with power suppliers, phone companies, banks). In the event that you don’t require any financing services, you can still apply for the NIE at the meeting with the notary public.

Spanish bank account:
We help you open a bank account with a Spanish bank institution with a German-speaking contact person. You will need a Spanish bank account to pay your utility bills, phone bills, community charges, etc.

Cadastral reference of the property (Referencia catastral del inmueble):
Through the cadastral reference we can identify all tax-related data such as the year of construction, dimensions of the plot, surface area of the construction, etc. The cadastral reference provides basic data that must be mandatorily included in the purchase agreement with option to buy.

Land Registry Extract (Registro de la Propiedad):
This document allows us to determine the existence of encumbrances of any kind such as mortgages, third-party rights, seizures or tax debts. All these encumbrances will be settled before the purchase transaction (under the supervision of the notary public and our lawyer) in order to ensure that you acquire a completely unencumbered property.

Deed of sale (Escritura de compraventa):
The former deed of sale (also known as “property title”) allows us to find out who the present owner is (individual, association, company, proxy, usufructuary), so that you know who you are signing the agreement with.

Property tax (IBI y basura):
The previous owner provides us with the last paid property tax bill, so that you know the annual current fee you have to pay. The property tax includes the annual waste collection fee (for example, in the municipality of Calviá, the property tax is due in July). For the ongoing year, the amount due is split proportionately among the seller and the buyer.

Submission of the Energy Performance Certificate:
For some years now, the submission of the energy certificate (certificado de eficiencia energética) has been mandatory in Spain in the event of a change in ownership. This certificate must be duly registered with the corresponding public authority.

Current utility companies:
The present owner informs us about any existing utility contracts (electricity, water, gas, phone, Internet, buildings & contents insurances). At CasaNova Properties we will help you deal with the utility companies according to your needs.

Community charges (Comunidad):
If the apartment or house is located within a residential complex, at the meeting with the notary public the owner is obliged to submit a certificate confirming that the current community charges have been fully paid. This certificate is also important for you to know how much you will have to pay for such expenses on a monthly basis. As for advance payments, community fees must be split among the seller and the buyer.

Legal support:
We have been collaborating with a Spanish lawyer for many years now, who guides our us during the entire process, from all preliminary arrangements through to the appointment with the notary... obviously without any additional cost for you. Any supplementary legal assistance will be subject to the payment of the corresponding fees.

Signature of the deed of sale at the notary’s office:
We will guide you every step of the way until the day of the appointment with the notary public. During the appointment, an interpreter will translate the content of the property title for you. The interpreter’s name will also be featured in the deed. Towards the end of the meeting, the purchase price will be transferred in order to complete the entire purchase transaction. Upon completion of the operation, you will be handed over the keys to your dream property!

Congratulations!

One-off taxes and charges to be paid by the Buyer:
A: The Buyer shall pay a real estate transfer tax (for the property only and not for the furniture or similar items contained therein) amounting to:

Up to the purchase price of 400.000 €

there is 8 %

400.000 € to 600.000 €

each 9 %

more than to 1.000.000 €

each 10 %

more than 1.500.000 €

each 11 %

For example: Purchase price 1.500.000 €

up tp 400.000 €

32.000 €

from 400.000 € to 600.000 €

18.000 €

from 600.000 € to 1.000.000 €

40.000 €

from 1.000.000 € to 1.500.000 €

55.000 €

Total

145.000 €

Exceptions:
Purchase transactions for new properties acquired from a property developer are subject to the payment of 10% VAT and 1.2% registration tax (impuesto sobre actos jurídicos documentados).

In the event of purchasing a plot from a property developer, the buyer will have to pay 21% VAT and the corresponding registration tax.

B: The notary costs corresponding to registration will be assumed by the buyer and are calculated based on the actual purchase price.

C: The buyer is responsible for paying the taxes corresponding to the registration of the property with the Land Registry. Registration taxes are also calculated based on the purchase price.

The real estate transfer tax, the notary fees and the registration taxes must be paid within one month after the meeting with the notary public. We strongly advise you to arrange the payments through a lawyer so that you don’t miss any deadline. This service is subject to a legal fee that is calculated based on the purchase price. We will be happy to forward you the contact details of the experienced and renowned lawyers we collaborate with.

All other taxes and charges are to be paid by the seller, including the land appreciation tax (Plusvalía), possible mortgage cancellation fees, a 3% withholding tax (if applicable) and the real estate agent’s commission. These taxes and charges will be deducted from the total purchase price at the notary’s office.

Annual taxes and charges to be paid by the Owner:b>
A: The property tax and the waste collection charges are payable on an annual basis to the corresponding municipal city council (e.g. in Calviá, they are due in July). To do so, you will be required to sign a direct debit mandate in order for the city council to be able to collect the corresponding amount from your Spanish account.

B: Non-resident owners must also pay an annual income tax on their own-use properties. This tax is calculated based on the cadastral value. The payment should be made through a tax adviser or lawyer of your choice. Example: Cadastral value €300,000, subject to 1.1%, and the result thereof to 19% (in 2017), total income tax due: €627.00.

C: Properties located within a community residential complex (Comunidad) are subject to the payment of the proportional community charges (calculated according to each owner’s share of the development or building) in accordance with the rules of the owners’ association.

General Information:
Please keep in mind that, in Spain, the non-compliance with the payment deadlines may result in the imposition of high late payment penalties! Therefore, we strongly advise the buyer to designate a reliable lawyer to deal with the above described matters (tax authorities, Land Registry, notary public, private service agencies).

May, 2018

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