More and more people are considering alternatives to the mortgage. This is the reason why an alternative formula has been rescued that was very popular in the previous economic crisis and that made it possible to carry out successful home buying and selling operations, the deferred home purchase.
Although it is true that renting with the option to buy is also a very popular option, the deferred purchase of a home allows you to defer the payment of the price of the home in terms established by both parties to the operation. This solution is suitable both for buying and selling between individuals and for transactions with real estate agents, and is a good option regardless of the fiscal value of a property.
What is the deferred purchase of a home
When we talk about deferred home purchase, we are referring to an option to buy and sell a property according to which one of the parties agrees to deliver said property while the other agrees to pay a set price. However, unlike a normal sale, the buyer may not have all the money at the time of the sale or have bank financing.
The deferred payment between individuals allows the buyer to disburse the money in different installments and carry out the purchase despite the lack of timely liquidity. By opting for this form of sale, possession of the property can be delivered to the buyer so that he can enjoy it, even if he has not yet made the full payment for it.
Another option offered by the sale of a property with deferred payment is to establish an agreement between both parties that allows the seller to retain the property until the full payment of the price has been paid. If you know how the energy certificate works in the sale or rental of homes, there is no problem in understanding that the obligation to have the corresponding certificate is also essential in the case of deferred purchases.
Deferred payment between individuals
When resorting to deferred payment between individuals, it is usual to formalize it in a private document. In this, the public deed of sale is granted to the buyer at the same time that the entire price is settled. Although it is true that this formula may not offer many guarantees to the buyer since, for example, the property could be seized if the seller has debts, to avoid any type of problem, the ideal is to carry out this operation before a notary and register the property in the Land Registry in favor of the buyer.
The deeds of sale with deferred payment signed must take into account the possible default of payment by the buyer. In this way, the seller is offered a greater guarantee for compliance with the contract and allows him to demand payment of the rest of the price that remains to be paid or the termination of the purchase contract and thus recover the property.
The most common thing in the deferred purchase of housing is to provide for an express condition in the contract. This condition would allow the seller to demand compliance with the payment or termination of the contract in accordance with the provisions of articles 1124 and 1405 of the Civil Code, which require the return of the property to the seller in case of termination of the contract.
How the deferred payment of a home is taxed
As occurs with other operations, the deferred payment between individuals is taxed to the Public Administration. There are three taxes to which this operation is subject: the IRPF and the municipal capital gains tax (IVTNU) by the seller, and the Property Transfer Tax (ITP) by the buyer.
Since it is a transmission, the seller must pay personal income tax as a capital gain or loss. This will be calculated by comparing the acquisition and transmission values of the land. In the meantime, as far as the municipal capital gains tax is concerned, it is essential that the good has been delivered. This tax must be paid immediately once the transfer of the property has been formalized. It is essential to bear in mind that the municipal capital gain will vary depending on the location of the property, a house on the outskirts of Madrid will not be the same as one in one of the best areas of the Salamanca district.
With regard to the Property Transfer Tax, it is also essential that the seller has already transferred the property to the buyer. In accordance with article 7 of Royal Legislative Decree 1/1993, it declares that "Onerous transmissions by acts" inter vivos "of all kinds of assets and rights that make up the assets of natural or legal persons." and, therefore, the tax must be paid on the day the act or contract is performed.
Title reservation agreement case
When carrying out a deferred home purchase, you can opt for a title reservation agreement to offer greater guarantees to the seller. This option allows the seller to give the buyer possession of the property, but not the property, which is transferred automatically at the time the payment established in the contract is completed.
If you opt for the title reservation agreement, it is necessary for the buyer and seller to take into account that they cannot transfer the property to a third party while this agreement is in force. In addition, the buyer will be obliged to maintain the entire home, including possible repairs or reforms that the home needs and for which he must take charge.
While the seller, as long as he will continue to own the property, he must continue to pay taxes such as IBI or community fees. Although it is necessary to take into account that this responsibility can be transferred to the buyer if it is specified in the contract.
In the event that the buyer does not pay any of the installments that he has agreed with the seller, the latter must urge the termination of the contract under the protection of this title reservation agreement. In addition, according to said contract, he will also have the right to the compensation that was agreed at the time with the other party.