1.- CONTRACT A LAWYER SPECIALIZED IN REAL ESTATE LAW
It’s obvious, nevertheless it’s the most important advice you can be given before starting the complex process of buying a house abroad.
2.- LAND REGISTRY
Before you complete your property purchase you should make sure that you have seen the Land Registry Certificate, available from the Colegio de Registradores (translations into English for an additional fee available) and have checked the following details:
- the property and land for sale match with the details registered and the seller(s) is/ are the registered owner(s)
- there are no debts or charges, such as a mortgage, on the property
- there are no legal proceedings initiated against the property for contravention of land planning law
- there are no tenants
- If the real estate is part of a special program, like low-income housing (viviendas de protección oficial).
Be careful: The Land Registry does not provide any official and certificated information about boundaries and square meters.
Once you have signed the purchase deed (a public document authorized by a notary), it is advisable to register the property in your name with the Land Registry as soon as possible in order to ensure full protection of your rights (this procedure takes between one to two months). The notary can even electronically sends an advanced notification to the Land Registry once the public deed is signed.
3.- CATASTRAL REGISTRY
The Cadastral Registry might give you some useful information, mainly about taxes, but the goal of this registry is just to help Spanish Treasury to collect taxes.
So keep in mind that the Cadastral certificate neither provides any official and certificated information about boundaries and square meters
4.- LAND LAW
- you have to check that planning permissions are in order and the property is legally built. This is particularly relevant when buying off-plan or direct from a developer. The town hall can inform you whether the building has all licenses and permissions and provide details of the type of land.
- you should check the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is located in a green zone or includes a public pathway or similar. This can be viewed at in the town planning (urbanismo) department of the local town hall
- Exercise extreme caution if the Land Registry record shows that the property you wish to buy is built on rural land. In normal circumstances, this type of land is reserved for agricultural use and you would need to undertake additional checks with the municipal and regional authorities to ensure that full planning permission has been obtained for residential use.
5.- COASTAL LAW.
If you are considering purchasing a coastal property you should contact the Coastal Demarcation office in your region to get a certificate to certify that the property is not affected by the 1988 Coastal Law, especially if it’s within the protected area of Public Domain.
6.- BUYING PROPERTY OFF-PLAN
Ensure the developer has an insurance covering damages caused by structural defects. This insurance should be included in the property manual (libro del edificio) that the developer gives you.
Keep in mind that the law entitles you to secure all your payments with a bank guarantee (aval bancario) in order to protect all your payments to the developers. All your payments have to be deposited in a special escrow account.
Confirm that the property has been certified as finished by a registered architect and registered as a new building in the property register
7.- RIGHTS IN THE OWNERS’ COMMUNITY
Before buying the house, you have to know the community statutes in case there are some kind of special rules concerning your property (e. g. expenses of swimming pool, interdiction…)
The taxes you will be due to pay depend on whether you are buying a new home straight from the promoter or a second-hand home.
Buying a new home: As a buyer, you will have to pay value added tax of 10% (VAT) directly to the seller together with the purchase price. As the buyer, you also have to pay stamp duty to your autonomous community (region), which is the 1.2% of the selling price appearing in the deed.
Buying a second-hand home: in this case you do not pay value added tax but property transfer tax (ITP between 8%-10%), to the autonomous community in which the real estate is located
The normal procedure to buy a house is signing a private contract (a private document written by a lawyer) paying a down payment of 10% of the purchase price, and after a period of two or three months, formalize the purchase with a deed in a notary.
Source: gov.uk and own law firm