Frequently Asked Questions – Sale with Guaranteed Rental
Can a physical person carry out a Sale with Guaranteed Rental as a buyer?
Yes, of course. These operations are normal Sales to which the constitution of a conventional rental is added, therefore they are formalised the same way both by a legal person as by a physical person.
What taxes must the Buyer of a property pay under this legal form?
The Buyer of a Sale with Rental must assume all Expenses, Taxes and Professional Fees corresponding to the acquisition of any home. Specifically, they will have to pay the Tax on Capital Transfers, as well as the Notary Public and Property Register Fees. In the Rental Contract they will assume the costs of its creation and those corresponding to registration in the Property Register.
Does the Rental Contract have different conditions to those usually in such Contracts?
No, the stipulations are those of the rental contracts based on the current Urban Renting Act of 1994 (modified by Law 4/2013) and the agreements which may freely be established by the parties, respecting the limits established by said Law.
Why is the Rental Contract registered in the Property Register?
Although this is not common practice, it is highly recommended for all types of rental contracts. In Sales with Rental processed by GRUPO RETIRO we always require the registration of rental in the Registry, as in this way legal security is established for the parties and the right to rental is safeguarded for the Senior Citizen for the established time.
Can the Senior Citizen transfer any rights of the Rental Contract to their heirs?
Absolutely not. In accordance with article 16.4 of the Urban Renting Act, the parties will agree in the Rental Contract that there is no right to subrogation when the death is after 3 years and will automatically terminate at the end of this period, in case of the death being before these 3 years have passed.
How is the monthly income to be paid to the Senior Citizen determined?
This income normally corresponds to the market price of a home with the location and characteristics of the one being transferred, although logically a different agreement between the parties is always possible.
Can the buyer request financing through a mortgage with the guarantee of the acquired home?
Of course, the buyer of the home may apply for a mortgage, guarantee or other type of financing with the guarantee of the acquired property, always with the obligatory prior registry of the Rental Contract in the Property Register, guaranteeing the rights of the Senior Citizen as tenant against third parties who may claim rights on the property in the future, as these must fully respect the Rental Contract given its public record.
How are the home’s expenses shared between the owner and tenant?
In Sales with Guaranteed Rental, the division of the home’s expenses is the same as in any Rental Contract. Thus, the buyer, as full owner of the property, pays the Land Value Tax and Housing Association Fees (ordinary and extraordinary). The tenant will take charge of the bills for supplies (light, water, gas, telephone) and the Urban Waste Rate (“rubbish” rate) in those municipalities in which this is in place.