The first thing you must do when you decide to buy a property in Spain, is to choose which area in Spain and what type of property you want: new build or resale property. One typical myth is that in Spain all properties have the same regulations. The fact is that the law applies and that the requirements for new build properties are different than for resale properties. There are also no similarities between homes located in the city or urbanisation and rural, rustic homes; a different approach applies to each of them.
Once you´ve decided on the type of property, you must look for a reliable and professional real estate agency which can help you with your search. Fact: the majority of real estate agencies have the skills and experience to do it professionally.
When you’ve found your dream property it´s important to hire a lawyer for the conveyancing process. Fact: only a qualified lawyer can give you legal and correct advice. He must be member of the Bar association and specialised in property law.
And when you have found your dream property please contract a lawyer for the process of Conveyancing. Fact: only a qualified lawyer can legally and correctly advice you, who must be a member of the College of lawyers and specialize in property law. Ask for references and schedule a introductory meeting with him/her. A Legal figure of English Conveyancer does not exist in Spain. Your real estate agent can recommend a lawyer to act independently on your behalf.
After this brief introduction, please find below the most important facts you must take into account:
Secure the property
After following all these steps, when you want to secure the property please ask your lawyer, real estate agency or builder to draw up a contract and transfer the deposit to an escrow account, never directly to a private seller. Myth: if you pay the funds directly to the seller, they are secure. There are many examples where buyers have had to carry out legal action and come into litigations to try to recover their deposit paid. A lawyer, estate agency or builder must have an escrow account, where the deposit is not released until it has to be.
Get your legal documents
Then you must open a bank account, apply for a NIE number (tax number in Spain), do a Power of attorney (if necessary),… Fact: ask your lawyer to guide, help, assist you by getting these legal documents. Myth: any other person can do it, maybe but with many risks involved and with no professionalism.
Searches/Due Diligence
Your lawyer will do all searches on the property, new or resale, urban or rural. These searches imply requesting certificates, get statements, approach different entities (Town Hall, Land Registry, Catastro, Council, Utility Companies,…) check all legal and technical paperwork, etc,… Myth: anybody can do it, or even a translator. Really? You should use a lawyer in your own country when you buy a property. Why should it be different in Spain?
Survey report of the property
In Spain, it is not compulsory and for that reason we include it in our services. Fact: we highly recommend for you to have one carried out, our in-house architect can do the survey-report for you.
Expenses
It depends on whether the property is a resale or a new build property, the selling price of the property, the region in Spain where it´s located, is it habitual residence or not, … and the amount can slightly change if you apply for a mortgage or if it is a rural property. Myth: 13 % of the total price. Fact: as I have mentioned it is not a percentage but as a rule people usually say 13 % on a resale property of 100,000 €. Fact: in that “common percentage” must be included taxes, lawyer fees, notary fees, land registry fees, and others,… So, please contact your lawyer and he will inform you on all the expenses that apply to your purchase.
Completion
Your lawyer will accompany you or act as your Power of Attorney. The transfer of ownership will be a smooth process which will take place on the date you´ve decided with the seller. Fact: it is not like in the UK that there´s an exchange of contract.
After the completion process
Your lawyer will pay the taxes for you, pay your bills, register your deeds in all entities, change over the name on the utility contracts, do direct debits… Fact: you don´t have to worry about anything, this process will be done automatically by your lawyer and can take approx 2 months.
Yearly taxes
Like in the UK or Ireland you must pay 2 taxes:
- Council tax: a direct debit will be set up for you
- Non-resident tax: you will need to appoint a legal and fiscal representative in Spain who will attend your tax duties
- Resident tax: if you decide to become fiscal resident in Spain, I mean live permanently or more than 6 months in Spain you must submit taxes as resident declaring all tax obligations in Spain.
Myth: anybody can do this for you. Fact: Even if you can calculate and submit yourself the taxes, it is still highly recommended that you appoint your lawyer to fulfill your obligations, calculate the taxes and submit them when necessary. Furthermore as non-resident you must appoint a legal and fiscal representative in Spain.
If you have other questions or enquiries regarding the process of buying a property in Spain, contact our legal partner Legal Iuris, an independent lawyer firm with 3 offices located on the Costa Blanca:
- Office Orihuela: Calle Obispo Rocamora 10, 2º Derecha – Tel +34 966 34 43 46
- Office Torrevieja: Av. Habaneras 2, bajo b – Tel +34 965 70 48 09
- Office Algorfa: Av. Antonio Pedrera Soler – Tel +34 27865 75 01 54
