How to formally cancel a mortgage on a property in Spain
If you find yourself in the long awaited moment of having finally settled the mortgage debt on your Spanish property with the bank, you need to know what steps to take once the mortgage loan has been fully paid off.
In Spain, the financial settlement does not suppose the immediate cancellation of the mortgage charge. To formally cancel your mortgage in Spain, you must follow a procedure in which the main parties are involved: the creditor’s bank, the owner of the property, the notary and the Land Registry.
If you decide to sell your Spanish property, or if you wish to apply for a second mortgage on it, you must ensure that there are no further encumbrances on that property. In this post, we recommend a series of simple steps to formally cancel a mortgage in Spain:
- The first step is to contact the bank that granted your mortgage, communicating your intention to formally cancel the mortgage in the Land Registry. The bank will have to go to the Notary where the representatives of the bank must sign a public deed of cancellation in which the annulment of the mortgage is certified.
- Once the public deed of cancellation is signed, the interested party must settle the tax on the corresponding cancellation at the Tax Office of the corresponding Autonomous Community, and exempt from Stamp Duty, within 30 days.
- This settlement must then be presented at the Land Registry that the property belongs to, and, in a period of two or three days, the document will be returned with annotation of cancelation of the mortgage.
Even though the bank plays the primary role in this procedure, and it must be the bank that issues the “approval” to follow the cancellation procedures, all the formalities must be carried out by the interested party. Furthermore, in order to have the property free from any encumbrances, the owner must pay the costs that are inherent in the cancellation procedure.
At Welex, we will be in charge of all the necessary formalities that must be done to cancel your mortgage in Spain. We contact the bank and prepare the public deed of cancellation of the mortgage, and we will ensure that the mortgage is removed from the Spanish Land Registry.