How to stay savvy when buying Spanish property

As British summertime kicks off, it’s only natural that our thoughts turn to sun, sea and sand. The laid-back lifestyle on offer in Spain has, for a long time, appealed to Brits but the property market there has not been without its problems in recent years.

Dedicated Spanish property lawyer Susana Lajusticia shares her top tips on buying real estate in the popular Mediterranean holiday destination.

Legal system

The legal process when buying a property in Spain is different from the English system and one should not assume or expect to find many similarities.

Spain is a notarial system and any property transactions will be executed before a Spanish public official, the Notario. However, Notarios are independent and would not represent each party individually in the property transaction but will give validity to the property transfer and the parties’ will and capacity to enter into the transaction.

It is therefore in your personal interest to engage the services of an expert Spanish lawyer who will represent you solely in the transaction.

Two property registers

You can find two different property registers in Spain:

• The Registro de la Propiedad – containing details of the ownership, description and charges on properties.
• The Catastro – a second registry dealing with the description, location, and local maps.

In an ideal world these two registries should contain the same information; however, this is not always the case and your Spanish solicitor should inform you on the position and any corrective action that might be required.

Language barrier

Many investors and private purchasers will not speak Spanish or will have only a very basic level of the language, which can create a dangerous barrier in any property transaction.

We recommend that you instruct an independent English-speaking lawyer who will protect your interests. Your English-speaking lawyer will advise you on the Spanish documentation and will also act as a link in the transaction, minimising any language barriers between the parties involved.

Legal insurance for any professional liability

Make sure that your legal adviser is qualified to offer such advice and that their work is covered by the required legal indemnity insurance.

Declaration of the full purchase price that is paid

This is something that cannot be even considered as an option. We all know and are aware of the strict anti-money laundering regulations in both countries, the UK and Spain, and the full price that the parties have agreed to pay is the one that goes on the deed.

Not only are we regulated by the above laws but it is also in the personal interest of any purchaser to declare the full price as you would not want to be left with a massive future capital gains tax liability. You should also bear in mind that the Spanish authorities are more and more proactive at tackling this old bad practice and reviewing property transactions and prices declared, and they have the powers to demand further taxes if they deem the price to be below their estimated property value.

Surveyor report

If you are mortgaging the property, your lender will want to make sure that the property offers a good security by being in a good condition. Likewise, you would want to make sure that you are making the right investment and it is, therefore, highly recommended that a survey report is carried out in Spain.

Home insurance

Remember to shop around and always do your homework. Prices can vary and there are many providers based in the UK, or in Spain, who can offer English policies and English-speaking assistance which will be of interest and handy should you need to make any claims.

Spanish wills

This is another important issue that is often overlooked. It is highly recommended that a Spanish will is put in place and a dedicated lawyer can assist you in organising this.

Spanish wills are not compulsory, but will make any probate process and estate administration more straightforward and hence should be considered in the early stages.

Top documentation and enquiries to be carried out by your Spanish solicitor:

Land search/nota simple: checking the title, vendor’s ownership, description of the property and potential charges including unpaid taxes or mortgages.

Checking the type of land: rural/urban. Note that some restrictions might apply.

Requesting a copy of the title deed (escritura pública).

Making the necessary enquiries with the local town hall/Ayuntamiento.

Requesting copies of the necessary planning permission, building permits, habitation licence/Cédula de habitabilidad and first occupation licence/Licencia de primera ocupación.

Requesting a copy of the impuesto de bienes inmuebles IBI/local council tax and rubbish collection bills/basuras.

Requesting copies of the most recent utility bills (facturas de agua, electricidad, gas, teléfono).

Requesting a copy of the building/complex regulations/Estatutos de la comunidad de propietarios re the co-ownership association regulations.

Requesting a copy of the paid receipt for the community charges/Comunidad de propietarios.

Making sure that your deposit for off-plan properties is legally secured by way of a bank guarantee/aval bancario or insurance policy/póliza de seguro.

Requesting the 10-year building guarantee for insurance defects for new properties/Seguro decenal.

Making sure that the property is free of tenants and other charges.

Obtaining your NIE numbers in Spain or through one of the Spanish Consulates in the UK.

Calculating the approximate tax and costs due in Spain. This is always something that can surprise any potential purchaser as the purchase tax and costs associated can be higher than you might expect. Make sure that you budget for these costs in your calculations!