It’s time to start seeing buying a home in Spain as being as safe as buying one in the UK or US. These day, a network of property professionals has replaced the cowboy operators and dodgy developers of the pre-financial crisis market. Of course, you need to employ a good lawyer and currency company, but with these in place you can buy in confidence. Here is how you purchase a home in Spain.
And what a choice of upmarket homes you will have! From the cool Moorish palaces of Palma de Mallorca to the golf course properties of Tenerife, the stylish townhouses of Barcelona to the gleaming modern villas of the Costa del Sol, Spain has five-star luxury at affordable prices.
Spanish Property Buying Need to Know
International buyers have the same right to buy in Spain as the Spanish do. For British buyers, this will not be affected by Brexit as property ownership is not ruled on by the EU. Moreover, although property ownership does not automatically give you the right to live in Spain as a non-EU citizen, Spain does operate a “golden visa” scheme. This allows non-EU citizens to acquire a long-term visa when buying property worth over €500,000.
Spain gained notoriety for illegal property and unfinished developments in the mid-2000s. However, it is now an object lesson in recovering from and learning from past mistakes and should now be seen as a safe place to buy property. It has a strong property-buying infrastructure, with excellent estate agents, surveyors and specialist property lawyers. Choose the right partners and you should have no fears about investing in Spain.
Although Spain uses a system of notaries, it is highly advisable to invest in the services of an independent, English-speaking Spanish solicitor, who specialises in property law.
For anyone with world-wide assets or property, you need a financial lawyer or tax specialist to advise on structuring any property deal. It is easy to either pay too much tax or leave heirs with serious inheritance issues.
It is important to establish in whose names the property will be put and who will inherit it. This is especially important for unmarried couples with children from previous relationships.
The Buying Process
A good estate agent will be worth their weight in gold when buying in Spain. They will help you find a notary (notario), get your tax number, advise on areas, connect utilities and many other aspects that a UK agent would never get involved with. It is not, however, a good idea to let them choose your lawyer. Call us on xxxx to be introduced to a lawyer who is not financially connected with the agent.
When you have found the right property and agreed a price, you will normally be asked to sign a reservation agreement. This will take the property off the market, usually for 15-30 days. For an expensive property this could be as much as €10,000, so do check if and under what circumstance the deposit will be returnable if you change your mind at this early stage.
For example, that the property passes preliminary legal checks and a building survey, or that you will get a mortgage agreed (if required), are typical arrangements for the return of a deposit.
Getting your NIE number
The buyer (each person named as buyer) must get their número de identificación de extranjero. This is relatively straightforward – a quick to the immigration or tax office with all the correct documents – but it can take anything up to six weeks, so do this as soon in the process as you can agreeing on a property. Your estate agent will normally help, since their commissions of around 5% depends on it!
Your lawyer will now start checking that, among other things, the property is legally the sellers to sell, has planning permission and no debts or restrictions on the sale.
Before the dates set out on the reservation agreement have run out, you will sign the deposit contract (contrato de arras). This sets out the exact details of the property, how much it is, where it is, who owns it and how you will pay. It also commits you to buying the property and the seller to sell it to you. There are various legal ways of doing this, but for most international buyers it will be using something called an ‘earnest money contract’.
The buyer normally pays a deposit of 10% of the price at this stage. Although the parties can agree not to include these conditions, the law says that if the buyer now pulls out (breaches the agreement) they lose the deposit and if the seller is in breach, they must return the deposit DOUBLED.
The sale contract, escritura
Signing the escritura completes the process. You normally sign this at the notary’s office, but you can give your lawyer Power of Attorney if you prefer. Signing the escritura pública (contract of sale) is the formal handover of the property. The buyer pays the balance and gets the keys in return.
You should allow for buying costs of 12-14%.
Power of attorney
If it’s inconvenient to return to Spain to sign each document you can grant Power of Attorney to your lawyer or other representative. Most do this at the notary’s office in Spain, but you can also assign power of attorney before a notary in the UK, or at the Spanish consulates in Manchester or London. The process cost around £250 in the UK but much less in Spain.