Find here everything about the legal terms and tax breaks for buying or selling homes in Spain
This article is designed to provide and explain all foreigners, what are the requirements to buy a property especially on legal documents when buying in specific areas, complaints and other information that may be helpful.
Recommendations on legal documentation
To initiate proceedings for the purchase of a property we recommend hiring a specialist in the Spanish laws and especially in the real estate part lawyer. Your best option is to find an independent lawyer, who does not belong or work for any real estate or construction and th
us precede their interests against those of others, should also have experience as the transfer system in Spain may be different to their country and therefore needs a qualified and experienced professional.
Try not to cut corners in terms of legal proceedings, if the real estate agent or a mediator suggests it must be very careful and watch while the transaction.
At the time of signing the purchase agreement, this will be done by a notary public, an impartial official who will be responsible for drafting the contract, issuing public works and advise legally, for this reason, you have the opportunity to choose the notary and consult on all matters relating to the contract, the query can be made 3 days before signing the contract.
In case you decide to hire a lawyer outside Spain must ensure that belong to the associations of lawyers of their country and possessing extensive experience in international operations and who specializes in this type of transaction, and if this exercise in Spain, should check their registration at the local bar, ie, the law school of the region. Importantly, it should require professional liability insurance your lawyer and you should not cancel any amount or sign any document until it has been fully advised.
In Spain it is customary to employ a person who accelerates all bureaucratic processes to be performed and which is best known as manager. Not all managers are certified to do such procedures, therefore, you must validate that the person owns the mark representing the GA Administrative Manager of rest, is unreliable hiring any other manager.
It may happen that is involved in a dispute over a property, certain court costs, which, in case of not having the means to pay for the paperwork, you can request legal assistance be required. If you reside in Spain, you can go directly to the local bar association and you can find more information at the European E-Justice Portal.
For cases of disputed property, we recommend you seek the services of a specialist in civil litigation lawyer, to make demands on banks, real estate agencies or developers who are involved at the rate of compensation or claims to be made to the regional authorities in courts of administrative litigation.
For the translation of contracts and any legal document, we recommend hiring a certified translator if your Spanish is not high, and even if this is the case, you better make sure the perfect writing documents. You can find a list of qualified professionals for this job on the Spanish Ministry for Foreign Affairs.
How to choose your mortgage?
The amount of mortgages and terms that exist for loans in Spain is large, it should find out and check which your best choice of all is offered by banks and loan companies
, of which there is a list of those who are legally authorized to operate in Spain. These, you should clearly explain what all the terms and payment terms are defined in the contract.
The most important points to consider when choosing your mortgage is interest rates and payment terms to repay the loan, for this reason you should hire the mortgage that best suits their abilities and needs. This mortgage will also be used for payment of fees and other formalities.
It should be clear that in the given case it cannot honor the mortgage payments, your home can be taken by the bank, and if the case is that the value of its debt is greater than the value of the property, the bank can take as payment from their property in their country of origin. These reasons make you see that you must be very attentive to the conditions to be met, but has 10 days after it has made the offer, and if realize that may not meet future payments, your best option will talk to the bank to draw new terms of the mortgage or some other way.
What to do if your lawyer does not meet your job?
If according to you, the lawyer hired to complete the formalities of the purchase of the property, has not fulfilled its obligations or you are dissatisfied with your work, you can file a complaint with the bar association of the respective province. The document must be written in Spanish, and if their complaints are not addressed, can raise their claims to regional or national bodies.
If you are dissatisfied with the court handling your case or the notary or manager who represents, should go to the General Judicial Council and professional respectively Council.
Verify this checklist before you buy
To complete your purchase should review the following documents are in order and check this tips:
You must have revised the Land Registry prior to the sale will be only an extract also called simple note, found in the College of Registrars, and check the following:
- Details of the property or land specified in the title, must match the information in the registry. You can check it at the Colegio de registradores.
- The property must be free of any debt is mortgage, utilities, etc.
- There should be no legal proceedings against the property, as violations of the land, or other legal incongruity.
- Building permits should be in order or check that the property is a legal construction, especially if it comes to new projects or are purchased directly from plans model. If the property is built in areas outside the city or areas that are not common for construction, you will need additional authorization by the government.
- If you want to build, you should check what are the areas allocated for construction, which are colored in green on the map of the city areas, thus know if the land you are buying or property that is building meets all legalities.
- The rateable value of the property must be verified as taxes must be paid according to the type of property and its characteristics of size, etc. This will be calculated by the board based on the sale price.
You should also review the following documents:
- Check the payment of the annual property tax bills through that they should have been canceled by the previous owner, in addition to certify the city council that they have no outstanding debts.
- The cadastral certificate must contain measures and the exacts boundaries of the property, which has a cadastral reference is included in both the cadastre and land registration. Of course in both records should match the references.
- To request public services, ie water, electricity, telephone or local, you must present a certificate of first occupation which is issued by the city council.
- Check that the previous utility bills are canceled, that, if possible be signed and reviewed by the president of the homeowners. If this check is not performed; all overdue invoices delayed or canceled become the new owner.
- In Spain it is necessary to present a certificate of Energy Efficiency at the time of a transaction of purchase and sale of a property, therefore, should require this document to make the purchase.
We should remind that after buying try to update all property documents as quickly as possible by placing his name in the Land Registry. If you wish, you can request an electronic notification to the register in which makes finding that the property belongs.
What if you want to buy in a coastal or rural area?
Coastal areas in Spain are legally protected so if you want to buy a home in an area close to the sea, must go to the Office of Coastal Demarcation which will determine if the property you want to buy is in a territory protected by law.
A similar situation occurs in rural areas, as these are protected to practice agriculture. For this reason, if the land or the house you want to buy are in a rural area, you should seek all the certifications provided by local and regional bodies and thus not breaking the law.
To buy in new projects do the following
- Your first task in case you`d be interested in a property under construction or planning to build, it is that it possesses development permits, and registration of land, this way you will recognize that the project is being built as planned.
- For such purchases, you will make payments in stages. After ensuring that the project meets the legalities above, you can make payments always demanding a guarantee or bank guarantee, the money will go to a trust account exclusively for the project.
- You should check the registration of the company developing the project, as well as registration of land where the project will be built. You can also request a copy of the cadastral certificate where the full extent and the limits in which the project will be built is defined.
- After the project construction is completed, you should check that you have met project planning and all the initially planned features. After being satisfied with these conditions, you can proceed to sign the deeds of the property.
- Similarly, you should demand their first occupation license, which required to engage the services of water and electricity, in addition to evidence that the property is habitable.
- To certify more precisely the conditions of their new property, you can hire inspectors from both the Royal Institute of Chartered Surveyors and the Association of Architects of Spain, which have qualified to perform such work professionals.
- If the project developers have not complied with the time parameters, characteristics of the property or provide any of the legal documents, you can:
- Waive the contract getting their deposited money plus interest rate
- Keep the contract, extending the deadline for project completion
If rescind the contract, it is advisable to seek the services of a lawyer specializing in litigation and proceed to send a document to the company developing the project, the reasons for wishing to terminate the contract and must also include certain documents that are considered important, such as a copy of the contract, a copy of deposits, etc. In Spain, it is common to use the Burofax, so it gives legality to the documents sent. If the company does not respond, you can send the same documents to demand the return of the deposits made by you.
The bank must answer for this money, otherwise, should impose a lawsuit against the bank to enforce their rights.
What you should know to rent your property?
The main requirement to place your rental property is the certificate of energy efficiency of the property is legally required for this type of contract.
- Short term rentals
Should be all in accordance with Spanish law, however, these may vary from one autonomous community to another, and between apartments or holiday homes. It is therefore advisable to seek a real estate lawyer to help with the paperwork and provide legal advice in local and national terms, and must take into account that in some regions of Spain, the marketing of such services by foreigners is restricted.
On the other hand, if your property is in buildings, it must equally abide by the rules imposed by the homeowners association, otherwise, can be seen in the obligation to pay fines that reach up to 30,000 euros. Thus. It is best accompanied by a lawyer to represent you in all these procedures.
- Long-term rentals
Spain has a law where conditions are set to place a property for rent long term. Therefore, there are different types of contracts depending on the length of rental. Seek professional help will help you choose the correct contract and to place all the legal paperwork in order.
- Taxes associated with rent
As the property is renting in Spain, you must report the Spanish state taxes regardless of whether they are resident in Spain or not. Counter services are the most recommended and also has experience both at home and in Spain, since the tax is not a simple procedure.
Know the equity release schemes
These relate to plans that allow owners to free up capital through the value of their property as an income, a lump sum or a mixture of both. One of the most common forms used for the release of capital, is the reverse mortgage, which allows homeowners to borrow against the value of your property and is used as collateral. These types of mortgages are normally suitable for seniors who are retired.
To perform these procedures, a number of companies that are registered in the National Securities Market Commission (CNMV) is the regulator of the securities market in Spain.
Legal aid is more especially when signing the contract, to thereby prevent harm or clauses that the company is not registered.
You should keep in mind that the schemes of equity are NOT used for tax evasion, so if a company offers you this, be wary of it and seek advice best in terms of taxes, may also review the Spanish Tax Agency any doubt.
In which case you will not be satisfied with the scheme acquired, you may file a claim on your investment to the company, and if no response occurs, you can make your complaint with the CNMV.
Problems with timeshare properties
This is a method widely used by resorts, agencies and companies, but is often used as a fraud by providing up shares in the stock and promotions in terms of airfare and lodging.
Written by: CAPD
Contribution to reader: Legal and tax procedures to acquire a property can be complicated for most people and even more if the purchase is made outside their country of origin. Therefore, this article presents a guide for those foreigners who wish to buy a property in Spain, giving some guidelines and tips to follow to make your purchase.