Tag Archives: Caparra confirmatoria

The Confirmatory Deposit

Home purchase preliminary mortgage deposit

Article 1385 of the Civil Code defines a security deposit as a sum of money or quantity of fungible things paid as security and in connection with a contractual performance.

ART. 1385 "If at the time of the conclusion of the contract one party gives the other, by way of a deposit, a sum of money or a quantity of other fungible things, the deposit shall, in case of performance, be returned or set off against the performance due.
"If the party who gave the deposit is in default, the other party may withdraw from the contract, retaining the deposit; if the party who received the deposit is in default, the other party may withdraw from the contract and claim double the amount paid"..

In this regard, it should be noted that the Property purchase proposalaccepted by all parties, becomes for all legal purposes a Preliminary Sale Agreement and the Confirmatory Deposit thus takes on its legal value.
The Confirmatory Deposit is not represented by standard figures; it is usually highlighted in the 15/20% of the price agreed upon by the parties, at the negotiation stage.
Fiscal Aspect:
The Confirmatory Deposit is taxed at 0.5% at the relevant tax office, in addition to fixed charges and stamps, which are compulsory for the validity of the registration of the preliminary.
This amount is consecutively deducted from the registration taxes on the final Deed of Sale.

DEEPENING:

PRELIMINARY OF PURCHASE AND SALE