Buy property in Spain
Regardless of where you buy a property, there is a lot to think about. If you purchase in a foreign country, you will need to know the laws and regulations of that country. In Spain however, there is plenty of expert help available. Here we give you some general information about what you should consider.
To buy a property in Spain, you need an NIE number. This is a Spanish social security number for foreigners. To obtain the NIE number can take from one day up to a week. It differs from place to place. You can also search by proxy in connection with the purchase.
When you find the property you want to purchase, a reservation agreement needs to be prepared to remove the property from the market. The cost of this agreement is usually €3000, this will be deducted from the final payment.
When the reservation agreement is signed and the payment has been made, the next step is to sign the purchase contract. In this contract will be the conditions of sale, which will then be in the title deed, the price, the description of the property, payment terms, buyers and sellers details, etc. This will also show the date when the deed is to be signed at the notary.
Once the contract is signed it is customary to transfer 10% of the purchase price as a deposit. The remaining amount, minus the reservation agreement amount, is payable when the deed is signed at the notary.
Before the contract is signed a thorough investigation needs to be carried out in the home to be purchased, to ensure that all details are correct. This may include getting a certificate (Nota Simple) from the Land Registry (Registro de la Propiedad). Land Registry’s primary function is to provide reliable information before signing contract.
The certificate is checked to ensure that the seller is the rightfull owner of the property and that the property is free from debts and mortgages that could reduce the value of the property. It is also important that the property is not of the type of Viviendas de Protección Oficial. This type of property is cheaper, because they are partly subsidized by the state. Such a property can not be sold at a higher price than valued or within a certain period of time.
If the property is part of a cooperative, Communidad, the seller must submit a certificate issued by the trustee to the association, which informs whether there are liabilities. The certificate must also clarify the community cost ie. elevator installation, facade renovation etc. that each home owner must pay.
It is important that there are no liabilities for the year that you purchase, as well as the previous year, as the new owner will otherwise be responsible for the outstanding costs.
For properties with a plot of land, you need to check by the Town Planning Department, Departamento de Urbanismo del Ayuntamiento, to apply for a certificate proving that everything is ok with the property.
This certification ensures buyers that the land is legal and that the property is not bigger than what is legally registered and has no pending litigation against the property.
Important to remember is the Coastal Law (Ley de Costas). If suspected that a home is affected by the Coastal Law, a certificate obtained from the Dirección General de Costas. The certificate states whether the property is affected and what impact it has on the property.
Another thing to consider is whether the property has tenants. If a tenant is having a long term rental, it may be that they have the right to stay in the home for five years.
Information on the costs when purchasing, like taxes, fees, agent, arranging loans, etc. can be found under our heading, Costs of the purchase and also in the article about buying a property in Spain.
How can you purchase a property without risks in Spain?
We understand investor’s fears. Especially when we read all the articles that are published daily in the press. Many of these are obviously sensationalist and unhelpful. The situation is difficult, but the investor should know that Spain continues to be a serious and democratic country with a fully consolidated rule and whose law is one of the safest and most complicated, for the protection of the consumer, the purchaser of the property.
With this we mean that, if the investor is taking the precautions that Spanish legislation itself provides, it is difficult that a purchaser should have any problems. There are sufficient guarantees that, if the buyer uses these and requires these, shall ensure that the investment is going to be absolutely secure. We say absolutely, be aware of the word that we use.
What are the new benefits of buying homes in Spain?
No one is unaware of the serious economic crisis still affecting Spain today. A crisis that is mainly due to the housing bubble that burst. In everyday language called crisis or crisis part Ladrillo (brick crisis). Spain have built too many homes. Banks gave all the possible benefits to the lenders. Individuals indebtedness for the purchase of housing at abnormally high prices, exceeded all precautionary limits.
The new Spanish government however, is aware of the need to restore confidence in the property market by creating a system that is serious and strong and that is sustainable without “bubbles” and with this not to abandon one of the greatest financial riches together with tourism.
While introducing tax exemptions of 60% for the taxation of IRPF, Impuesto Renta de las Personas físicas (personal income), for the non-resident owners who rent out their homes. This exemption could amount to 100% if these owners are resident in the EU. Length of rental contract with automatic renewal of leases shortened from 5-3 years or 3-1 years, depending on each case. In this way, the landlord is not bound to such a long lease that the current lease has demanded.
Finally, a very important measure, the situation should arise that the tenant does not pay, it will no longer be necessary to take legal action to obtain a judgment for eviction. The process is simplified, since it only becomes necessary with a notary involvement, who may order that restitution of property can be made within ten days. That is the procedure for eviction simplified. This is an important measures that the prospective non-resident investor should know.
In addition, the substantial reduction in prices in the housing market, which is equivalent to 50% of prices before the crisis and in some cases even more, the Spanish real estate market begins undoubtedly to become attractive again.
Here follow some questions of our readers:
The prices are better. It may be interesting, but can you now buy a property in Spain with certainty, without any legal risks, without fear of losing the property and without facing any major problems? The answer is YES. One can buy property without any kind of risk.
Despite the difficulties affecting Spain, we must not forget that Spain is a EU country with a structured right system, a democratic country which guarantees rights and freedom to their citizens.
We must also not forget that the Spanish legislation that protects consumers is one of the most advanced and progressive in the world. That is to say that there is a legal framework, with the laws and regulations that fully defends the consumer, in this case the purchaser of the property.
Therefore, in case you want to buy a property in Spain, do it without worrying about it. You will only need to follow some rules when you have made your decision and also some precautions and professional advice that will give you an absolute guarantee for your investment. You will be able to enjoy your property without worries or concern.