When it comes to purchasing property in Spain, there are two main groups of buyers:
- Those who buy property impulsively
Those who buy property considering the legal aspects that are involved
What could be the outcome for those within group number one? Just to name a few:
- The property could not be fully legal and/or have debt
- Heavy and unexpected amount of tax
- Nobody took care of the essential check-ups such as water, electricity or community fees.
It’s the usual problem, it all gets confused: the dream, the illusions for the new life in Spain, and the complexity of purchasing property in Spain.
Believe us, we’ve met countless people who when through the previous. The resulting feeling seems to be similar: a foreign person who does not speak the language (Spanish) in a foreign country (Spain) is lost in bureaucracy. In short, a foreign unprotected person in the dark.
For this reason, we’ve written this definitive guide so that you can learn more about the legal purchase process. Furthermore, we’d like to help you understand it’s not an easy procedure for one to do on your own, or through an unknown company.
It’s our recommendation. After all, we’ve been in business since 1985 and have done over 10,000 property purchases for clients using the legal processes.
Step 1: Pre-purchase
Four kind of properties that can be purchased in Spain are:
- New build
- Bank Repossession
Either way, you should make sure that it is the property of your dream. In your everyday Spanish life, you will be enjoying spending time in the sun.
So, it would be useful to ask yourself the following questions:
- How far is the hospital or the health centre?
- Do I have to drive far to go to the local shops?
- Are there any leisure facilities around?
- Will I live in a safe area?
You should look for a reputable estate agent to help you answer the previous questions. It is easy to fall in love with the home of your dreams and not to look around or take into consideration the distance between your home and those necessary services.
Another important point. Make sure you are working with a properly registered law firm run by registered lawyers. The consequences can be disastrous if you contract a company that does not operate as lawyers and are not knowledgeable in Spanish law.
Our approach works the following way. When you contact us and give us power of attorney, we will:
- Apply for an NIE number
- Open a Spanish bank account
- Make general legal searches to make sure the property is legal and without debt
- Help you requesting a mortgage if needed
- Assist you with life/home insurance
For off-plan property, we will:
- Go through a background check of the developer or promoter
- Make sure the project is fully registered with the town hall
- Check there is an up-to-date building license
- Review all the contracts to confirm everything looks all right, including the bank guarantee
Step 2: The day of purchase
Before signing the title deeds, you will receive three items:
- A scheduled breakdown of payments showing each stage of payment
- A final balance
- A list of all the purchase costs
We don’t like surprises, so we will keep you informed of all the stages of the process via email and phone calls.
At Sun Lawyers, on the day of the signing, we will prepare the checks and bankers drafts required to proceed.
The purchase process officially ends when the title deed of purchase is signed by you (or by your legal represented) and the seller before the Public Notary.
The seller will grant you a copy of the title deeds of ownership, as well as the keys to the property in exchange for the purchase bank draft.
Throughout the signing process at the notary’s office, our clients are always accompanied by us.
We go through the following steps:
- Prepare the deeds
- Prepare funds from the client’s bank account
- Oversee the documentation
- Check that everything is in order
- Act as an interpreter
Finally, if for some professional or personal reasons you cannot attend to the signing of the title deeds, we will take care of everything through power of attorney.
If the seller is a non-resident, the buyer has also the obligation to withhold 3% of the agreed price and pay it directly to the Tax Office on account of the potential Capital Gain Tax of the seller. At Sun Lawyers we guarantee to do this important step properly and efficiently. If a claim against the Capital Gains Tax can be made by the seller, then we can apply for a refund, provided that the seller is up-to-date in their annual non-resident taxes over the last four years. Public Notaries in Spain are public officials and, consequently, they are independent from the parties. They publicly attest that the parties have agreed the transaction and that they have done so in keeping with the law.
Step 3: Post purchase
Once ready, the original public deed must be collected from the Public Notary and then be submitted along with the duly paid tax models which correspond to the Land Registry.
Within this step, we will change into your names all the utilities (water and electricity), community and council tax, as well as setting up direct debits from your Spanish bank accounts.
You must be registered as a taxpayer with the Spanish Inland Revenue for payment of the taxes arising from the purchase and for payment of your annual tax. No problem will take of it on your behalf.
Some final important thoughts
Reserving your property
To ensure your Spanish property is taken off the market you will need to sign a reservation contract and pay a reservation fee (deposit).
We advise you not to sign a reservation contract or pay any money before first consulting us.
This is something we do within Step 1, but we would like to emphasis this point again.
When buying property in Spain it is a must to carry out a complete set of legal checks to ensure that the property does not have any problems or hidden defects that might affect you later.
At Sun Lawyers, we will check many aspects including that:
- The appropriate planning permission has been obtained.
- There are no outstanding debts attached to the property.
- There is a mortgage.
In addition, we will send an architect to inspect your property to confirm that it is structurally sound.
Private purchase contract
At the private purchase contract stage of your purchase, we will negotiate with the selling party the most favorable conditions in your own interests.
It is essential to have a proper contract covering all possible scenarios. A “contrato de compraventa” agreement suits buyers as it brings penalties to sellers who try to change the agreed price of the property.
We also produce the contract in your language in case the seller is Spanish. It is very important for us that you understand every single word from this important document.
Are you ready for the big move to Spain? Please fill out the form below, we will be happy to represent you and go through all the legal processes to perfection. You want to have peace of mind in Spain. We want to protect you and make possible that piece of mind.
Contact us now to speak to our professional lawyers about your particular situation and to arrange a FREE consultation.
Our legal team will let you know what documents are needed to analyse your case and advice you on the best course of action to take.
Call us now on: (0034) 96 532 11 93, email email@example.com or simply fill in the form provided.