Buying Property In Spain

At the bottome of this page is my personal buying history see just what i paid and how

Legal advice

It is strongly recommended that you choose an independent lawyer who is specialised in Spanish land law

A Spanish notary public will be involved in preparing the contract of sale and issuing the public deeds. As the purchaser, you have the right to choose which notary you use. The notary is a public servant who has a duty to provide you with free and impartial legal advice on all aspects of the contract before you sign. It is a good idea to seek advice from the notary early on. When a date is set for signing the contract, you have three days beforehand to visit the notary and ask any questions you may have about any aspect of the contract.

If you choose to work with a British estate agent, promoter or lawyer, check that they are qualified, reliable and have experience operating in Spain. Check that they are registered with the Law Society in the UK and specialise in International Transactions. If your lawyer is based in Spain, ask for their registration number and check that they are registered and practising with the local bar association (Colegio de Abogados).

You should also check that your lawyer has professional indemnity insurance and not sign any papers or hand over any money until you have taken independent legal advice.

Many Spanish citizens use a ‘Gestor’ to carry out bureaucracy on their behalf. You should note that only a Gestor Administrativo with the GA kite mark is professionally qualified and certified to process paperwork directly with the Spanish administration.

Translators

If you do not have a good understanding of Spanish, make sure that you get all contracts and relevant documentation translated by an independent translator. You can find a list of accredited translators and interpreters in Spain on the Spanish Ministry for Foreign Affairs website.

Mortgages

Do your homework: you should analyse and compare a range of different products and services offered by different lending companies. If you have any doubts about the terms and conditions, ask the lender to clarify. You should also check that the lender is listed as authorised to operate in Spain with the Bank of Spain.

Look for the mortgage which is most appropriate for your capabilities and needs. There are a range of mortgages on offer and you should pay special attention to the interest rate and repayment period, fees for setting up the mortgage as well as early repayment and cancellation fees.

If you cannot keep up the mortgage repayments, the Spanish bank could repossess your property in Spain. If the value of the property is less than the total debt outstanding (you are in negative equity), the bank may pursue your UK assets to recover the mortgage shortfall using a European Enforcement Order.

Make sure you fully understand the mortgage agreement you sign. If you have any doubts check with the branch during the 10 working-day period after the binding offer has been provided. If for any reason you cannot keep up the mortgage repayments, you should speak to your bank immediately (before defaulting on repayments) to discuss the options available.

Taxation

The Spanish tax authority is called the Agencia Tributaria. It provides some information on its website in English.

Fraud

Further information is available in the property fraud guidance.

Complaints against the legal system

If you believe your lawyer has been negligent and has not met their obligations, you should complain in the first instance to the provincial bar association. If the response is unsatisfactory, you can take your complaint to the regional and then national bar associations. Complaints should be in writing and in Spanish. A full list of the bar associations around Spain can be found on the website of the General Council of Spanish Lawyers.

If you have a complaint about the way a court has handled your case, you can present a complaint to the General Council of the Judiciary.

If you have a complaint against a notary or gestor administrativo, this should be directed to the professional council of which they are a member.

Visa/residence requirements

Please see our separate guide on Residency requirements in Spain.

Purchaser’s checklist

Before you complete your property purchase you should make sure that:

·        you have seen the Land Registry extract (nota simple), available from the Colegio de Registradores (translations into English for an additional fee), and checked the following details

·        the property and land for sale match the details registered and the sellers are the registered owner(s)

·        there are no debts or charges, such as a mortgage, on the property

·        there are no legal proceedings initiated against the property for contravention of land planning law

·        you have checked that planning permissions are in order and the property is a legal build. This is particularly relevant when buying off-plan or direct from a developer. The town hall can inform you whether the building has all licences and permissions and provide details of the type of land. If the property is built on rural land or land that is not classified for construction, additional confirmation should be sought from the regional government as to whether they have authorised the construction

·        if you are buying an off-plan property, confirm that the property has been certified as finished by a registered architect and registered as a new build in the property register. The registration should also provide details of the developer’s insurance against structural and other defects in the construction. In the case of a private build (the previous owner built their own house and decided to sell before ten years had lapsed) you will need to request these details separately

·        you have checked the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar. This can be viewed at to the town planning (urbanismo) department of the local town hall

·        you have carried out a property survey. Whilst this is not obligatory, it is wise to get a chartered surveyor to check the property

·        You know the cadastral value of the property and how much purchase tax will be due. Be aware that tax is charged on the council’s valuation of the property as opposed to the amount of the sale. You can check this at the regional government’s online tax agency site using the cadastal reference number

Make sure you have seen the following documents:

·        a paid-up receipt for the previous owner’s annual property tax (IBI). It is also wise to get a certificate from the town hall proving that there are no unpaid rates from previous years

·        the Catastral certificate giving the exact boundaries and square metres of your land. The Cadastral record will be linked to the Land Register record by a cadastral reference which will be included in both. You should ensure that the property and land description contained in both records matches

·        the licence of first occupancy or habitation certificate issued by the town hall. You will need this document to connect to electricity and water companies. Developers cannot force you to complete without this licence.

·        receipt to prove all utility bills have been paid by the previous owner

·        if applicable, a certificate signed by the President of the Community of Property Owners stating that there are no outstanding debts. You should be aware that if you later find that there are such debts outstanding, as the new owner, you assume the debts for the current and previous year (two years in total)

·        as from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are considering buying a property, the seller is obliged to show you this certificate

On completion, the public deed should reflect an accurate description of the property. It is advisable that you register the property in your name with the Land Registry as soon as possible to ensure full protection of your rights. The notary can even send advance notification to the Land Registry electronically once the public deed is signed.

Buying property in certain areas

If you are considering purchasing a coastal property you should contact the Coastal Demarcation office in your region to get a certificate to certify that the property is not affected by the 1988 Coastal Law. Bear in mind that while it is possible to view the coastal boundaries of the public maritime areas online on the Environment Ministry’s website, this may not provide sufficiently accurate information on which to base a property purchase.

Exercise extreme caution if the Land Registry record shows that the property you wish to buy is built on rural land. In normal circumstances this type of land is reserved for agricultural use and you would need to undertake additional checks with the municipal and regional authorities to ensure that full planning permission has been obtained for residential use.

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Buying property off-plan

Buying off-plan property inevitably involves higher risk than buying re-sale property. If you are considering buying off-plan in Spain there are a number of points to consider.

Make sure you have a bank guarantee (aval bancario) to cover your stage payments. Developers of off-plan properties are legally obliged to secure all deposits with a bank guarantee. However, bear in mind that this obligation only comes into force once the developer has obtained planning permission for the development so you should ask to see this before making any payments. You can also check this at the Land Registry, because if the description of the future building is registered, the registrar will have seen evidence that the licence exists and work has begun in accordance with the approved design.

You should ensure that the bank guarantee is individual and not a collective guarantee covering the whole development, which does not give the same protection. You should also request proof that your payments are deposited in a special escrow account, which can only be used for the construction of the specified development.

Make sure the developer is registered with the Mercantile Registry and the person who is going to sign on the developer’s behalf has the legal power to do so. You can visit any Mercantile Registry office or use the registradores website.

Check with the Land Registry to make sure the land which is going to be built on is registered to the developer you are doing business with.

Make sure you obtain a copy of the Cadastral certificate giving the exact boundaries and square metres of your land.

Ensure the developer has insurance covering damage caused by structural defects to the building. This insurance should be included in the property manual (libro del edificio) that the developer gives you.

It is also advisable to obtain a certificate regarding the planning situation of the plot you wish to buy from the Town Planning (Urbanismo) department of the town hall. This will include other information such as whether the plot has any building restrictions, is in a green zone, includes a public footpath or if there are any current plans to build a motorway etc.

Once construction has finished, and before you sign the title deed, ask for proof from the seller that the construction has been finished in accordance with the description given in the plans. This is issued as a certificate (certificado final de obra). You can also check this at the Land Registry.

Make sure you have the licence of first occupancy (licencia de primera occupación) which is issued by the town hall for new buildings and certifies that the property is habitable. You will need this document to connect to electricity and water companies. Developers cannot force you to complete without this licence.

Consider asking a chartered surveyor to check the property. This is not obligatory but it is wise to obtain a professional opinion on the property before you complete. The Royal Institute of Chartered Surveyors (RICS) exists in Spain and there are residential chartered surveyors working across the peninsula and the islands. Members of the RICS are qualified and experienced professionals offering independent and impartial advice.

The Spanish College of Architects in each province also offers a list of independent specialist surveyors.

Should the developer not build your property within the timeframe stated in the contract, or services and utilities are not completed and connected to standard, or the habitation certificate cannot be issued, you are legally entitled to either:

·        rescind the contract and have the deposits returned plus interest

·        or extend the deadline, allowing the developer to complete the property

If you want to rescind the contract, it is advisable to seek independent legal advice. Once you have consulted a lawyer, the first step is to write to the developer to explain that due to non-compliance with the contract, you want to rescind the contract and request that the deposits paid so far are returned, as well as the accrued interest. You should include any relevant documentation (e.g. a copy of the contract, copies of payments made, copy of the bank guarantee) and state a timeframe by which you want the amount to be reimbursed. It is advisable to write to the developer via Burofax, which enables you to prove that you have sent a specific document, and that the recipient received it.

If the developer does not respond to you within the specified timeframe, you should contact the claims department of the bank or savings bank responsible for the guarantee to request a refund of the payments made. Again, it is wise to make contact via Burofax and attach copies of all relevant documentation, including a copy of the bank guarantee, a copy of the complaint submitted to the developer, a copy of the developer’s response (if any) and copies of any documents which indicate that the developer has not complied with the contract.

Should the bank not comply, the only remaining course of redress is to instruct a lawyer to take a civil case against the bank.

If you believe you have been a victim of fraud and you have neither a bank guarantee nor an insurance policy from the developer, you should seek independent legal advice regarding taking criminal legal action through the courts and register a statement with the police.

Renting out your property

As from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are offering your property for rent after this date, you will need to obtain an energy certificate first.

Short-term lets

If you want to let your property to tourists on a short-term basis, you must ensure that you are doing so in accordance with Spanish law. The regulations on letting tourist apartments (apartamentos turisticos) and holiday homes (viviendas vacacionales) to tourists will vary depending on the region where the property is located.

If you are planning on making a return by renting out your property on a short-term basis, it is best to seek independent legal advice and check what the rules are at the local town hall or the tourist department of the regional government before you buy. Be aware that the marketing of private residential property to tourists is strictly regulated in many regions of Spain.

Owners who are caught illegally advertising or letting out their properties without complying with local legislation can be liable for significant fines, in some cases reaching as much as €30,000. If you are planning to buy an apartment which is part of a residential block, you should also check whether there are any rules set by the committee of owners that prohibit or restrict short-term letting. You may want to consider hiring a Spanish letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf. In some regions, such as Murcia, it is obligatory to use a specialist tourist apartment management company for short-term rentals to tourists.

Long-term lets

Owners who let their properties on a long-term basis are free to do so within the terms set out by the national rental law. However, it is worth seeking professional advice to make sure that you are complying with Spanish legislation and that you are using the correct rental contract.

In Spain, there are different types of contracts depending on how long the property is due to be let. You can get copies of these contracts from tobacconists.

Letting taxes

You must ensure that you declare your rental income to the Spanish tax authorities (Agencia Tributaria) whether you are resident in Spain or not. Taxation is a complex issue, and it is advisable to seek the advice of an accountant or professional tax adviser with comprehensive and up to date knowledge of both the UK and Spanish tax regulations.

Davids Personal Buying History.

After 16 years here i have bought and sold a few properties here and below is some of what i have paid and how we did it as a guide for you.

The first apartment i rented here through an agent and we paid a deposit of one month up front and one month deposit that was returned at end of rent.

The first apartment i bought we paid a deposit of 1000 euros and then signed at the notory and paid the balence then but things have change now and you now pay around 1000 to 3000 deposit at the estate agents once you say you will buy th eproperty then around 1 week later you pay 10% of the perchuse price "THIS IS NON RETURNABLE"and the balence is paid when you sign at th enotory.

I have just bought some land here 800 square mters and we paid 1500 euros depoist at the agents office then 10 days later we paid 30,000 and the balence when we signed at the notory.

Today i just sold an apartment here for 115,000 euros, we took a deposit of 1500 euros and the buyer needs to pay another 10,000 in the next 10 days then the ballance is paid at the notory  in a few weeks time.

Deposits 

If you pay a deposit then these are non refunable if the buyer pulls out.

If you change your mine to not sell you pay the buyer double the deposit.