Question
Consultation about a purchase of a property in Spain. I am Irish and have been renting a property in Valencia for some years. Also, I am considering buying a secondhand house in Alicante. And would like you to provide me with basic information about the steps to be followed and taken into account when buying a property. I would also like to know the situation of the real estate market in Spain.
Answer.
Dear reader, thank you for your query.
According to the information provided by the relevant Ministry (Ministerio de Vivienda) the real estate market has increased 39.6% in the second quarter of 2010 in terms of home sales in Spain (in comparison with the same quarter of 2009). And in the Valencia Community (Alicante, Valencia and Castellon) increased 48.2%.
The purpose of this article is to provide general guidelines and steps to consider and take into account for you and anyone interested in purchasing a second-hand property. This article is not in relation to rural properties, commercial properties and /or sale or purchase from a developer, coast and other protected areas, etc.
First we must consider that despite all the bad press real estate has been receiving from the media (both Spanish and foreign), the truth is that the Spanish system is very safe and there should not be any problems with the purchase of a property in Spain, as long as you obtain the appropriate legal advice.
Please find below a short summary of the steps to be followed:
1.-) Once you have found the property you would like to buy you must take into account the following:
1. A) YOU NEED AN NIE:
If you are not Spanish and do not have a National Identity Document (DNI) (Documento Nacional de Identidad). You must obtain an NIE Number, (Foreigners Identification Number) required for the payment of taxes in Spain. The Deed (Escritura) of your house will not be granted at the end of the conveyance process without an NIE number. You can apply for your NIE in person at the competent National Police Station.
1.B) YOU WILL NEED A BANK ACCOUNT IN SPAIN:
it is important to consider that you may have to pay commissions if you have to send money from your country to Spain, please check all the conditions of the account. This account is needed for household bills, paying taxes, etc.
2.-) It is highly advisable to engage the services of a lawyer in Spain.
It is advisable to use the services of an independent lawyer who speaks your language and is able to explain the process. It is very important that the lawyer is independent from the agent and the developer (promotor) and takes care only of your interests. Do not forget to ask the independent lawyer to provide you with his number in The Spanish Law Society (número de colegiado). And make sure you do not use a “consultant” that is not a licensed lawyer-solicitor and not subject to the rules of The Spanish Law Society and does not hold a professional liability policy. Unfortunately, this area has been very much intruded by people who are not really qualified or registered with the risk that this implies.
3.) MAIN LEGAL CHECKS TO BE CARRIED OUT DURING THE PROCESS OF A PURCHASE OF A PROPERTY IN SPAIN.
3.1) Land Registry:
the lawyer must verify that the property you are looking at (built and plot area) is registered correctly and under the vendor’s name, free of any charges, limitations and encumbrances, etc. Which will give adequate registrar protection as buyer. In the event that there is a problem your lawyer should verify if it can be corrected through an appropriate expansion of new construction, Acta de Notoriedad , etc.
3.2) Check with the Town Hall (City-Hall):
You must verify through the lawyer if there is any penalty proceeding (infracción) against the property. And if it complies with building and urban regulations in the area where it is located (if it is an urban, able to be urban, or rustic land, the urban parameters e.g. minimum plot area, distance from the built area to the boundaries, etc).
He should also check whether the property is likely to have a second occupancy license (licencia segunda ocupación) after the sale. The seller must deliver the previous occupancy licence (also known as Habitation Certificate).
Check with the seller and with the Town Hall or agencies managing local taxes (such as SUMA), that the payments for IBI-Council Tax – Local Rates, (Impuesto de Bienes Inmuebles Naturaleza Urbana) and the rate for garbage-rubbish collection (Basura) are updated.
3.3) Verify with Cadastre:
The property should be properly registered in Cadastre (Catastro) if not any inaccuracies found should be corrected by submitting form 902 or any other required form.
3.4) Community of Owners:
If the property is part of a community you will need to check with the president or the administrator of the community for any outstanding debts or extra charges (derramas) and it is also convenient to check if there are any other problems in the community. It is also interesting even before deciding the purchase of a property to know the amount of the community fees to get an idea of the annual costs of maintaining the property and also to be aware of the wording of the statutes and internal rules of the community.
3.5) Utility companies (electricity, water, etc):
You must ensure that housing supplies have definitive contracts and that there are no outstanding debts or any other circumstances that would compromise electrical or water, power after the purchase.
4.- OTHERS TO BE CONSIDERED FOR A PURCHASE OF A PROPERTY IN SPAIN.
4.1. – Valuation and / or architect’s report: if you decide to know in depth the structural situation of the property you could require the services of an architect (expert in this field). You could also ask a professional surveyor to render a valuation to know the approximate market value.
4.2.-Non-Resident Tax Return: Remember that if you are not resident in Spain just for the fact of owning a property or a share of one you must submit a Non Resident Tax Return.
4.3.-Spanish Will. When you have any kind of asset in Spain (bank account, car and of course a property or share thereof) it is very convenient to make a Spanish Will. Having a Spanish Will has only advantages, and it could save you and your family thousands of Euros during the inheritance process.
OUR LAW FIRM PROVIDES ALL THE ABOVE MENTIONED SERVICES.
Therefore, should this be your case or the case of someone you know in the process of purchase of a property in Spain, please do not hesitate to contact us.
*The information provided on this article is not intended to be legal advice but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
E-mail: info@white-baos.com
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