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Real Estate Law

Buying, Selling and Renting a Property

Mortages

Buying a property in Spain:

Buying a property in Spain is a simple process if you only take one step at a time and hire the right experts.

Step 1:  Examine thoroughly

If you are on holiday in Spain and suddenly find the perfect home, then you might want to hurry up and make a bid before you go home. Stop! This is where a lot of people make a mistake. Impulse buying may be appropriate in certain situations – especially when it comes to clothes or a gift of some kind. But when we talk about such an important investment as a home is, it is not a good idea at all.

It is important to take your time, get to know the area, consider the needs you have, not only now, but perhaps also in five- or ten-years’ time. To throw yourself into a home purchase is probably the biggest mistake that people make.

Step 2: Find an independent lawyer

Once you have found the right home, you must make sure that you use the help of a good expert to investigate the legal part. Your choice of lawyer is an important step in the process of buying a property in Spain and it is important that they safeguard your interests.

Your lawyer should:

  • Be able to communicate easily with you – make sure that they speak your native language well or a language that you yourself master at a really good level.
  • If you are staying abroad during the buying process, how do you communicate?
  • have a good reputation – always try to make sure you talk to someone else who has used them before
  • be established for a long time – you want to make sure that your lawyer has a solid experience and is reliable
  • be unbound to all other parties to the process. You should know that your lawyer works for you and you alone.

Step 3: Due diligence of the dwelling

Ensure that the correct housing checks are carried out such as checking:

  • The legal situation of the dwelling
  • That it is debt-free
  • That electricity, water and the homeowner’s association is paid
  • That any extensions and renovations have all the correct permits and building permits

Your lawyer should do these checks for you and you should ask for confirmation that it is done.

Step 4: Sign the private contract

The next phase of our steps to buying a home in Spain is when your lawyer certifies that the residence meets all the criteria and you can sign the private contract. The private contract is not registered in any official register but is legally binding and must be checked by your lawyer before it is signed.

When you sign the contract, you must pay a down payment. If you as a buyer break the contract, you will lose the deposit. If the seller withdraws from the transaction, you as a buyer are entitled to twice the deposit as compensation under law if nothing else is stated in the contract.

Step 5: Acquire NIE and possible power of attorney

During the process of buying a home in Spain, you need to get an NIE number if you do not have one already. This  Número de Identificación de Extranjeros  means that you are registered with the Spanish tax authorities. You have to apply for this in person at the National Police Office for Foreigners.

If you cannot be in Spain when you must apply for your NIE then you can also apply for this using a power of attorney (Poder Notarial). You can appoint a trusted person to represent you in certain transactions and you must then write a power of attorney before a notary. This means that the purchase process can continue even if you are not there.

Step 6: Signing the title deeds

The title deed must also be signed before the Notary. In this step you also make the final payment and get the keys to the residence.

When you sign the title deed, you will not receive the original title deed at once without an official copy called Copia Simple. If you have a mortgage loan, the bank will sometimes retain the original deed until the loan is fully repaid.

Step 7: Register the title deeds with the Land Registry

Once you have signed the title deed, the purchase must be registered in the Land Registry and you must notify the electricity and water companies of the change of ownership.

Step 8: Pay the bills for the purchase process

You must now supplement your payments with your legal representative.  You should then ask for a detailed list of costs instead to accept only a grand total. You must also be able to obtain all documentation and original invoices for notary costs, land registers and the taxes you have paid. It is important to keep all these documents, invoices, documentation and guarantees in a safe place. You never know when you might need them, and they are deductible expenses on the day you are going to sell the home.

Step 9: Pay ongoing taxes

It is important that you arrange for someone to take care of paying your taxes for your property in Spain. What you must pay annually depends to some extent on whether you are a resident or not in Spain. Both residents and non-residents must pay the Municipal Property TaxIBI. Residents then also pay income tax and declare them in Spain, but it is important to remember that even non-resident homeowners must file an annual tax return. It is for the payment of an income tax imposed in Spain that is calculated based on the value of the dwelling.

Steg 10: Congratulations!

Now you have reached the tenth and final step in the process of buying property in Spain. You have now purchased a home in Spain step by step and should feel confident that the purchase has gone right. By taking advice from good experts, one step at a time, you can now look forward too many years as a homeowner in sunny Spain.