In the process of purchasing a property, garage or premises, the purchase and sale contract is essential, which also implies a series of rights and obligations. The procedures that must be carried out can be overwhelming for some people, which is why we offer you a guide with the steps you need to carry out.

Purchase and sale contract

The first step to formalizing a sale with a deed before notary is to finalize a private purchase and sale contract between both parties. With this document, the contracting parties are subject to complying with the stipulated obligations. For this reason, it is advisable to make a thorough assessment of the pre-contract in which the obligations are reflected, and other convenient clauses can be added.

Deposit agreement
On the other hand, you also have to sign a deposit contract, which is the guarantee that implies the delivery of a deposit to ensure that the obligation to purchase the home is fulfilled.

There are three types of deposits: penitential, confirmatory and penal.

• Penitential deposits. They allow the buyer and the seller to legally withdraw in exchange for the payment established in the deposit contract. When it is the buyer who withdraws and does not wish to continue with the purchase and sale contract, he will lose all the money given as a deposit or deposit. If the seller withdraws, he will have to make a refund of double the amount that was given to him. If the contract does not specify what type of deposit has been agreed upon, generally confirmatory deposits will be used.

• Confirmatory deposit. They are an advance payment of the price of the property, which has been previously agreed upon by both parties and which is reflected in the purchase and sale contract. It can be said that it is the delivery of a first installment, so this amount is attributed to the final price. If any of the parties does not comply with the agreement, the contract may be required to be terminated.

• Penalty charges. This type of deposit does not constitute an advance payment of the purchase price. Nor does it grant the parties the possibility of withdrawing from the contract. In the event of non-compliance, the amount delivered would replace compensation for damages and payment of interest. Despite paying the penalty, the debtor party cannot be exempted from fulfilling the obligations contracted. That is, criminal deposits do not allow unilateral renouncement of the contract.

Purchase and sale expenses
In the contract where the type of deposit will have been established, data such as the total price of the property, the amount to be delivered as a deposit, the method of payment of the remaining price and the term limit available will also have to appear. to execute the deed before a notary, as well as the payment of expenses.

It must also be stated whether the property has encumbrances, such as mortgages, and if so, the buyer can choose whether to be subrogated to this pending mortgage, or can acquire the property free of encumbrances. In this case, the seller will have to take the necessary steps to cancel them. The expenses associated with the sale (registration and notary) are generally agreed so that the buyers are the ones who assume them.

If there was no prior agreement, they would be distributed as follows:

Notary expenses (deed) and granting expenses (matrix deed) correspond to the selling party.
Buyers would have to pay the other writing costs corresponding to the first copy and the subsequent ones written after the purchase.

Registration expenses in the Property Registry
They correspond to the purchasing party. Registration can only be done when taxes have been paid.

Mortgage expenses, liens, charges and derivatives.
They will depend on what the parties have agreed upon. When the sale has been agreed as free, if a cancellation is made through writing, it will be borne by the seller.

Value added tax (VAT)
When you buy a new property, you have to pay VAT to the seller. When the home is used, the amount corresponding to the Property Transfer Tax must be paid.

IBI and municipal capital gains
The municipal capital gain IBI is what is called Tax on the Increase in the Value of Urban Land. This payment is assumed by the seller, unless it has been agreed that the buyer will do so, although in this case the selling party will continue to be responsible to the City Council.

On the other hand, the IBI or Real Estate Tax must be paid proportionally, unless otherwise agreed. This means that, in principle, the payment is calculated based on the time of year in which each person has the property.

As you can see, there are many procedures that must be faced when buying and selling a property. That is why at Procasa we offer to advise and guide you throughout the entire process.

At Procasa Roses we are specialists in the purchase and sale of real estate: flats, houses, apartments and villas in Roses, Empuriabrava and other towns on the Costa Brava. For the peace of mind of buyers and sellers, we have a team specialized in all legal issues associated with the purchase and sale of real estate so that each of them is a success for our clients.

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