Guide to Buying a House in Spain
Buying Property In Spain can be confusing and a little scary and this is something we understand as expats and we have had first hand experience of this ourselves. Learning about the process you are about to embark on is important and the aim here is to give you an over view and hopefully put to rest any fears you may have as a buyer.
When buying in Spain you are probabaly dealing with a system that is unfamiliar to you and in a language you may not understand so there are some important facts to be aware of and things you will need.
• An Abogado (Lawyer)
• An NIE number
• A Spanish bank account
This is the most important decision you will make. Your lawyer will be handling most of the transaction and will be acting for you and representing your interests throughout. With this in mind it stands to reason that it should be someone you trust. If you are not currently living in Spain you would probabaly need to give your Abogado power of attorney which would allow them to sign papers on your behalf, this both saves you constant travelling and will speed up the process. This is something we had to do when we moved to Spain and had no problems with it.
It also follows that good communication is important so if you do not speak Spanish it would be wise to choose one that speaks English and there are plenty that do. If you do not know one or have no recommendations then we can suggest one for you.
Your Lawyer will check the Escirtura publica (escritura de compraventa) which will confirm the property you are buying is the same as that on the deeds - any major changes made by the owner would have needed to have been recorded - in addition they will confirm the property is not built on rural land and is as the seller says it is.
They will also check the Catastro which in turn dictates the IBI impuesto sobre inmuebles which relates to the owners annual property tax. Before completion your lawyer will ensure that all IBI taxes have been paid dating back to 5 years and that there is no liability to you - the debt can be incurred against the property not the individual.
Your Lawyer should also transfer your name to the utility bills, gas, electric, telephone etc and an agreement between you and the seller as to who pays what on the final bills will need to be agreed upon depending on when you take possession of the property.
In Spain when you make an offer on a property and it is accepted you then pay a non refundable fee of E3000 -E7000 depending on the sale price. The vendor then takes the property off the market and now cannot enter into an agreement with anyone else, meaning from this point you cannot be 'gazumped'. This money forms part of the sale price - it is NOT in addition to the price. The money is paid to us, the agents, and is held in our client account until completion and the transaction should be overseen by your lawyer. Do not make the payment unless you are committed to buy.
Upon completion your lawyer will sign and forward the escritura de compraventa which is similar to the land registry in the UK and confirms you as the owner of the property. This contract will need to be signed in front of a notary (a person authorised to perform or witness certain legalities, for example contracts and deeds)
No doubt this sounds like a lot to contend with but with the right legal assistance it should be reasonably straight forward. Do not worry - it is estimated aproximately between 350,000 and 760,000 British live in Spain depending on whos figures you believe. In addition to this there are many thousands of other nationalities both EU and non EU and although the media sometimes publish horror stories of property disasters these are the exception to the rule. Spain is a well regulated modern country and providing you exercise the same caution when choosing the people you deal with as you would at home you should be ok.
Your NIE (numero de identidad de extranjero) is your formal identification number in Spain and you will need one for any action you take that has legal implications such as buying a house, registering a car, having utility bills in your name etc. You will need one of these if you are serious about buying or even making an offer on a property.
• You can apply through the Spanish consulate in the country you live in although this can take a long time and may be problematic should you have deadlines to meet.
• In person from the issuing office. It is recommended you at least take an interpreter with you or even a representative from your lawyers office. Even if you can cope with the language the bureaucracy can be a lot to contend with.
• If you have given power of attourney to your lawyer they should be able to obtain one for you.
Spanish bank account
You may be able to obtain a mortgage from abroad but most likely it will be through a Spanish bank. In any case you will need a Spanish account for bills and standing orders etc. There are several large high street banks and opening an account is simple as long as you provide the correct documentation and you do not need to be a resident of Spain to do so.
Taxes and fees
When purchasing in Spain, as with anywhere, there are various associated costs and taxes to pay. This can amount to roughly 15% on top of the purchase price so this should be taken into consideration when making your bid.
Impuesto sobre transmisiones patrimoniales is the main tax on houses that are not bought from new and this can be as much as 10% in the Valencian region (this is similar to stamp duty in the UK), you then have your lawyers fees, notary fees, a fee to the real estate commission and possibly smaller local taxes depending on where you are and there can be other costs on top.
Your lawyer will be able to give you a breakdown of your tax liability and other charges.
If you are moving to Spain from abroad then the cost of travel, transportation of possessions and maybe even pets can add to your costs and should be considered.
As a buyer you pay no fees to us as agents, the fee paid to secure the property when making a bid is held in an account and forms part of the overall purchase fee. Our fees are paid by the vendor upon completion.
It is not obligatory to have a survey done on a property before purchase in Spain although your mortgage company may insist on you having one. In any case they tend to be fairly superficial and not a lot can be drawn from them and there is not much you can do should a problem develop in the future (not entirely dissimilar to the UK in that respect).
Houses in Spain are subject to problems the same as they are anywhere else so when buying you may deem it sensible to pay for your own survey to put your mind at rest.
British citizens post Brexit
At the time of writing there is no answer to what the position of British citizens in Spain will be although it seems unlikely there will be mass purges and forced deportations! There are a considerable amount of British living in Spain - it is the most popular destination for those moving abroad and the Spanish appreciate the input to their economy and are a very welcoming people.
The following is a quote from President Puig of Valencia -'I want to send a message of absolute affection to the whole British community who live amongst us and guarantee them there will be no interruption in the fundamental public services (and) that health care is guaranteed to anyone who lives in our region'.
This at least sounds promising.
It is also worth remembering that an estimated +2 million non EU citizens currently reside in Spain and at worst British people would only have to live under the same conditions as them. British people have been living in Spain since before the European union and it is safe to predict they will continue to do so afterwards.