Tax aspects in the purchase – sale of real estate in Spain.
We will start this exposition, informing you about what the Spanish Civil Code establishes in its article 1445 on Spanish purchase sale agreements:
“By the contract of purchase and sale (of a property in Spain), one of the parties is obliged to hand over one particular thing, and the other to pay for it an agreed price in money or figure equivalent thereof.”
As you may know, the parties at a purchase or sale contract in Spain must be identified, they must have legal personality and show their identity, through the presentation of identity card or passport. Also, in case of foreigners, they must be holders of NIE in Spain.
The seller has the obligation to deliver the thing sold, to respond about its legal possession, and about any hidden defects that it might have. The purchaser has the obligation to pay the price in the agreed form.
With regard to the obligation to settle the price of the property in Spain, we recall the limitation of payments in cash established by Spanish legislation since 2012, according to which no transactions can be paid in cash, when any party is an entrepreneur or professional, for an amount equal or over than 2,500 euros, or equivalent amount in another currency.
This limit will be of 15,000 euros or equivalent in the currency of your country, when the payer is a individual who does not have his fiscal residence in Spain and does not act as an entrepreneur or professional.
In Spain, please remember that the payment by bearer check is considered a cash payment.