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BUYING PROPERTY IN SPAIN

Updated: Oct 23, 2019



People interested in purchasing a house, apartment or plot in Spain, will be involved in the process of buying and the transfer of property.

Spain has laws to protect the (future) buyer, these laws can be different per region but with a similar contents in the whole of Spain.

Buying an existing house

When you are looking for a house, the estate agent nowadays has the obligation to produce the following documents:

Description of the property, including address, floor area, rights which rest on the property (e.g. right of way)Current ownerAsking priceDebts and obligations of the property, which will show in a document called Nota Simple: an excerpt from the registry. This document basically tells you whether or not the property is charged with a mortgage. This should be a recent copy, in any case not older than 3 months. From the Nota Simple we cannot distract whether the seller has paid all outstanding water- and electricity bills, so this also has to be investigated.Receipt showing that all property taxes have been paid.In its case: information on the contribution to the Association of Owners. It also should be examined whether the seller has no debts to the Association of Owners.Existence of water- electricity- and gas supply, telephone connection.Energy certificate

All this information is necessary for you to decide whether or not you’re interested in buying the property.

The purchase of detached houses, that are not older than 17 years, requires special attention. During the period 2003-2008 in Spain many thousands of houses were built without the necessary licenses. This does not automatically mean that they’re illegal, but cautiousness must be taken when such a property is offered for sale.

Buying new build

When you are looking to buy a new built house or apartment, it is of course highly important to check if all required permits, certificates and declarations were granted, if utility supplies are provided etc.

Buying “off plan” requires particularly careful drafting of the (preliminary) purchase contract. This must include clauses about: completion date, penalty clauses, bank guarantee, payment terms and conditions, possibilities to cancel the contract etc.

The purchase of a building plot

The purchase of building plot also requires extra research, especially a check of the land registry plans has the highest priority. When you want to investigate this yourself, without professional help, the best thing you can do is to go directly to the “Urbanismo” department of the town hall. Nowadays in Andalusia building is only allowed on land that has the qualification “Suelo Urbano” or “Urbanizable”; land that is designated for housing. When you’re offered a plot or a piece of land in the countryside, far from any urban development or other buildings, you can almost be certain that you will not be allowed to build there.

The purchase process

When you’ve chosen a property and checked all the legal documents, the owner or the estate agent will generally offer you a “reservation contract”, which expresses your interest to buy and which will take the property off the market. Normally this is sealed with a financial contribution. This contribution can be a deposit or part of the purchase price, but that’s not always the case. If the future buyer pulls out, he will lose this money. The reservation contract gives the buyer the time to arrange the financial part of the purchase or at least to get the money together to pay the deposit.

Consequently, the owner will ask you to pay a proper deposit, usually around 10% of the selling price, and you will sign a contract with all details of the property, conditions and payments. The conditions should include the maximum period when the official sale will be signed in front of the notary public. Therefore the owner must show all necessary paperwork and the buyer will have to have the finance ready. If one of the parties cannot meet these requirements, the contract i.e. the deal will be rescinded.

When everything is in order, an appointment at the notary can be made. The choice of notary is free, but usually based on the location. Vastly different fees and therefore competition between notaries are rare in Spain. The official transfer of ownership of the property takes place with the signing of the deed “Escritura Pública”.

Registering the property in your name

After signing the ownership documents at the notary, the deeds will have to be offered at the Property Register (Registro de la Propiedad) within 30 days, and the taxes will have to be paid. For resale homes, in Andalucía this tax is currently 8% of the value of the property. For new buildings and building land other tariffs apply, which also may vary per region. Even though you legally take ownership after signing a purchase contract (not necessarily the Escritura Pública) and after paying the sum involved, this registration is the ultimate assurance that there is now no one else that could claim this property.

Registering the cadastral property

The property also has to be registered in your name at the Land Registry or Catastro. As a consequence of this, property tax will be charged by the local authorities.

PRACTICAL INFORMATION

N.I.E. number

In order to buy property in Spain, you need a Spanish tax number. This so-called N.I.E. number can be obtained from the Foreign Department of the Ministry of Internal Affairs in the province where you are going to buy, or at the Spanish Consulate in your home country. If you’re married and you buy the property in both names, then BOTH partners need a N.I.E. number. Keep in mind the period that elapses between application and granting of the document! Without your N.I.E. number the purchase (at the notary) will not proceed!

Bank account

In order to pay for your property it is by far the most convenient to open a Spanish bank account and use this for the payments . This will also be used for the direct debit payments of water, electricity etc. Opening a bank account must be done by you in person. As a result of European laws concerning money laundering and terrorism, you will be asked to hand over details about your income, tax residency and source of the funds.

Power Of Attorney

It is very useful to give Power of Attorney to a lawyer in Spain. Then he/she can sort out ALL matters for you without you constantly having to come over to fill out another form, sign a document or apply for some or other paper. A Power Of Attorney will have to be signed at the notary public and will stay in force until you revoke. Even the official transfer of the property at the notary can be done by a third person that has been given Power Of Attorney. Then you’ll just have to pick up the keys and open the door of your new house.

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