When buying property in Spain it’s important to realise that there are crucial differences compared with buying property in the UK. In Spain, buying property can be especially complicated as Spain has 17 autonomous regions, which all have their own regulations. This is why we strongly recommend that you seek reliable and independent Spanish legal advice before you commit to a property purchase in Spain.
Many people liaise with estate agents and find a property before seeking legal advice. Although some estate agents are perfectly reputable, the profession does not have the best reputation for having a buyer’s best interest at heart. Making sure that you have all the necessary information to make an informed decision when buying a property in Spain is crucial to ensure the success of the purchase and to prevent any future problems. A Spanish estate agent will provide you with a lot of helpful information about the property in Spain, but you need to know what else to look out for and ensure that you instruct a reputable Spanish lawyer to check this for you before you commit to a purchase!
Here are some of the main things to check to make sure that buying your dream home in Spain doesn’t become a nightmare!
Ask whether there any charges or debts attached to the property
In Spain, mortgages or unpaid taxes, for instance, are attached to the property rather than the individual. So, your lawyer in Spain must get proof that the vendor has paid all his debts before finalising your Spanish property purchase.
Check that whole property is registered at the Land Registry
If it is not registered, the ownership and legality of a Spanish property can be questioned, potentially causing significant complications. The Nota Simple (a short legal report of the property detailing the current owner(s); the type of ownership; a brief description outlining the size and boundaries of the property and more) should clarify the ownership and legality of the Spanish property you are considering purchasing.
Find out whether there has ever been a breach of planning on the property
Your lawyer must find out whether a Spanish property is subject to any breach of Spanish planning rules or building regulations. Understanding whether the property has ever been inspected by the town hall regarding breaches of planning permission is a good starting point.
Ask to see a plan of the plot
Property boundaries, in Spain, especially concerning rural properties, can be very unclear. A reputable estate agent should be able to provide a plan of the plot. Your Spanish lawyer will help you to check the boundary of the Spanish property and make sure that the boundaries are clear, as well as match also those outlined in the Nota Simple. They will also check that all of the Spanish property and land you are considering buying at is actually included within the boundaries registered.
Check that the property is registered with the local town hall for IBI
IBI (Impuesto sobre Bienes Inmuebles) is a local Spanish tax, similar to council tax in the UK, which must be paid by the owners of all Spanish properties, even unoccupied properties. It’s important to note that Spanish properties that are not registered are not exempt from the tax and are subject to hefty fines if left unpaid. Asking the estate agent for a copy of the most recent bill, will help you find out what the annual IBI bill is for that Spanish property.
Ask about the License of First Occupation
All property in Spain requires a Licence of First Occupation (LFO), or equivalent for older properties. The LFO guarantees that when the property was first built, it was inspected by the local town hall to make sure the building meets the criteria of the planning permission granted. Most Spanish mortgage lenders require the LFO before they will offer a mortgage loan against a property.
Find out the taxable value of the Spanish property
The taxable value of a Spanish property (also known as the Cadastral Value) is the minimum value that the Regional Tax Authority deems the property to be worth. If the minimum taxable value is higher than the purchase price, you may need to pay Spanish transfer tax on the higher value because taxes are calculated against this value not the purchase price. This means that there could be an opportunity to negotiate on the purchase price. Your lawyer in Spain should check this before you commit yourself to the property purchase, so you can accurately budget for the taxes due and negotiate the purchase price of the Spanish property with this in mind.
Check whether the property has its own meters for water and electricity
Some Spanish properties have shared meters or may be subject to supplements. It’s worth knowing this in advance to avoid future complications. Ask for copies of the most recent bills to help you budget in terms of the cost of utilities for your Spanish property.
The property buying process in Spain is significantly different to conveyancing processes in the various parts of the UK and can therefore be daunting for UK buyers in Spain. However, as long as you obtain proper legal advice in relation to your property purchase from reputable Spanish lawyers from the outset, you can enjoy the process of acquiring your dream Spanish home and avoid future problems.
For more information about buying a property in Spain or for assistance from one of our recommended Spanish lawyers give us a call on 01244 470 339 or email email@example.com. You can also download our FREE Buying Property in Spain guide here.