The Real Spain Property Buyers’ Guide
Buying property in Spain can and should be a simple process. Unfortunately, some people’s experiences paint a very different picture. As with everything in life, understanding the process and being prepared will make the whole experience more enjoyable and less stressful.
The role of the Notary
As in the UK, most non-Spanish purchasers use a solicitor to check the documents and to ensure that there are no debts or other nasty surprises related to the property that they want to buy. However, in Spain the deeds for the property (the escritura) are signed in front of a public notary, whose job it is to ensure that the paperwork is in order and that all legal requirements are met by both the vendor and the purchaser.
The notary checks with the property registry office (Registro de Propiedades) to ensure that any existing debts, such as mortgages, are settled prior to completion of the purchase / sale. There is also a standard clause in the deeds stating that other financial obligations relating to the property (such as water, electricity and council tax charges) have been paid up to date by the current owner and that the seller is responsible for such debts up until the date of completion.
Any participant at the notary who cannot demonstrate fluency in Spanish is required to have a competent translator present (a service provided free of charge by Real Spain).
As can be seen from the above, the current laws in Spain and the role of the notary go a long way to protect purchasers against the pitfalls so often described in the media and the “how to” books and publications. Most problems occur when people buy from unscrupulous developers or agents “off plan” or “in project” where all the documentation is not yet available. For such purchases it is imperative to use an independent solicitor and to check with the town hall that permission has or will be granted for the project before parting with any money. Building laws are local, complicated and subject to frequent change – use the same common sense that you would use at home and a thorough, reputable and independent solicitor.
The buying process
Before leaving home. Make sure you have done your sums and know what you can afford. If you require a mortgage in Spain bring your most recent P60 or proof of earnings. Make sure your passport is up to date and bring a European Health Card (better safe than sorry!).
Choose a reputable, Spanish-registered estate agent that has a good reputation in the area you are looking. Don’t be afraid to ask around in the area amongst people who have already purchased – it could save you from making some big mistakes.
Open a bank account. It is the law in Spain to have a bank account at the time of purchase and this must be set up in time to make the necessary transfer of funds. If you require a mortgage, this must also be discussed early on and the application process started in good time.
Request an NIE number – a Spanish fiscal number that is necessary for the payment of taxes and for almost all operations performed in front of a notary. At Real Spain we help our clients with this process.
Locate a solicitor. An “in-house” solicitor is likely to have the interests of the agent or developer as a priority – always choose an independent solicitor, preferably with local knowledge and who comes recommended. The solicitor will deal with all the paperwork before, during and after purchase including drawing up contracts, preparing for the signing of the deeds at the notary, the registration of the property and the payment of taxes and fees.
Choose your property. The more information you provide to the estate agent, the less time will be wasted. Know your budget and stick to it. Don’t be persuaded into spending more than you can comfortably afford – far better to adjust your criteria to meet the budget than to end up with a financial burden that you cannot afford. On the other hand, aiming below what you can comfortably afford may mean you miss out on your dream home! At Real Spain we only show you properties within the budget you have set with us, so be honest and be realistic. Whatever the media may say, nobody in Spain is giving their properties away!!
Arrange transfer of funds. A deposit will be required on signing a contract with the vendor which is negotiable but generally a minimum of 10%. “Holding fees” paid to estate agents are rarely binding on the vendors and should be avoided if possible. When signing the contract, a completion date will be set and sufficient funds must be in place in your Spanish bank account in good time to cover the balance of the purchase and all fees payable such as notary and registry fees and the purchase tax. The current rate of purchase tax is 8% of the price declared in the deeds. Generally speaking, completion can take place on or before the date set, at your convenience. If you are not able to return to sign the contract or the deeds you can authorise a power of attorney so someone can act on your behalf (e.g. your solicitor).