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Have you paid off your Spanish mortgage?
Economic cancellation vs. registry cancellation
In Spain, it’s common for people to pay off their mortgage (economic cancellation) but to then forget to remove it from the property registry (registry cancellation). Here’s a guide on how to fully cancel a mortgage:
- Economic Cancellation: Once you’ve paid off your mortgage, you no longer have debt with the bank, but the mortgage still shows up in the property registry.
- Why Registry Cancellation is Important: The mortgage showing in the registry doesn’t affect you immediately, but you need to remove it if you want to sell your property. Doing this right after paying off the mortgage is easier than waiting years, since, quite often, finding the files corresponding to the economic cancellation is difficult and takes time. Particularly if the bank was involved in a merger or just simply does not exist anymore.
3. Steps for Registry Cancellation:
- Go to the bank to request the “zero debt certificate”. Financial institutions must deliver it free of charge.
- Notary: Take the zero-debt certificate, your ID, and property purchase deed to a notary. You’ll sign a public deed certifying the mortgage cancellation and pay notary fees (around €100-150). A bank representative needs to be present to sign the cancellation deed, and again the bank should not charge for this.
- Documented Legal Acts (AJD) Form: Complete this form and get it signed at the tax office (Hacienda) of your autonomous community’s delegation. Although the process is tax-exempt, you must complete it
- Property Registry: Submit the stamped AJD form, zero debt certificate, and the deed to the Property Registry to finalise the cancellation. Here you will have to pay the registration fees that will depend on the value of your mortgage (around 35 euros).
4. Verification: It is recommended that after submitting the documents, you request a simple registry note to ensure the mortgage has been removed.
5. Alternative Option: If you wait 20 years after the mortgage term ends, you can cancel it without a notary by applying directly to the Property Registry. They might still require the AJD form mention above.
Following these steps will help you ensure that your property is fully cleared of the mortgage in the registry, making future sales or transactions smoother.
Should you have any enquiries regarding the content of this article, or any other questions relating to mortgages in Spain, please do not hesitate to reach out to us for further information.
Patricia Nadal: