Below is some general Spanish legal advice on buying property in Spain. We hope this will give you an accurate idea on the legal processes involved.
This in no way should replace professional legal advice, which New Wave Villas always recommends all clients to obtain prior to purchasing any property in Spain:
Instruct a lawyer or legal representative with experience of the Spanish legal system to act on your behalf. Speak to such a lawyer before you commit yourself to buy.
Open a bank account in Spain. This is usually straightforward as all you require is your passport, New Wave Villas or your legal representative will be able to assist you with this.
Be prepared to pay a reservation deposit (often 3,000 or 6,000 euros) when reserving and agreeing terms for the property. It is recommended that this payment is made to your legal representative so that they can check all paperwork on the purchase is in order.
Be aware of the taxes and costs payable in addition to the purchase price. Ask your legal representative to provide you with details. Remember that taxes and costs will add approximately 10% to the purchase price, or slightly more if you are taking out a Spanish mortgage.
At the same time obtain from your legal representative an indication of likely ongoing annual taxes and expenses, for example rates (IBI) and community charges.
When buying a property in the course of construction, where completion will often be many months ahead, speak to Currencies Direct (see Currencies section) about forward buying euros in order to avoid the risk of adverse currency fluctuations.
Your legal representative shall also conduct a Land Registry search that will check that the seller owns the property and that there are no ongoing mortgages or encumbrances which you may find yourself responsible for. He will also contact the local town hall to determine the planning zoning and status of the property (and the overall development where applicable) and check that necessary building licences have been granted.
When buying a resale property, a detailed inventory of furniture and all equipment that is being included in the sale, should be provided to your legal representative by the owners.
Your legal representative can advise you in whose name or names the property should be bought, for example, sole name or joint names, in the names of the children, or in the name of a company with, perhaps, shares held by trustees or by a company resident outside Spain. This aspect can have important tax implications in Spain, in particular with regard to Inheritance Tax.
A contract of sale (contrato privado de compraventa) is signed once searches and enquiries are completed, usually within 30 days of paying the reservation deposit and at that point a 10% payment minus the deposit which was paid – it is at this point that both buyers and sellers are protected and the purchase is secured.
When buying a property in the course of construction, check that a specification, showing what is included in the purchase and if possible details of construction (build specification), is attached to the contract – these documents should be provided in English.
It is vital that your deposit and all stage payments are covered by a bank guarantee or insurance policy to protect you in the unlikely event of the property not being built or the developer going into insolvency.
You will require a foreigner's tax identification number (known as an NIE number) and again your legal representative will assist you in this. It is important to apply for this (need to apply in person in Almeria city) as soon as possible as it may take 8 to 10 weeks to come through and delays could hold up the completion of the purchase.
After a final check of the title and the grant of the necessary Licence of First Occupation (for a new property), you and your legal representative shall attend the completion appointment at a local Notary's office. There the title transfer deed (Escritura de Compraventa) will be checked and signed by you, the final purchase money paid over and the keys released (NB – it is worth considering giving your legal representative Power of Attorney to purchase, so that you do not have to attend the notary and run the risk of having to repeatedly travel to Spain should any small problem occur resulting in a delay in completion).
Following completion, your legal representative will ensure that the relevant taxes and duties are paid and your title is duly registered at the local Land Registry, and they will also ensure that the utilities are connected (for New properties) or changed into your names (for Resale properties).
It is advisable to make a will in Spain to deal with your Spanish property and add a codicil to your UK will to exclude the Spanish property.
Appoint a fiscal representative in Spain (your legal representative should be able to assist in this) to prepare and lodge the annual tax forms which will be required.