• New Property
• Resale Property
• Golf Property
• Commercial Property
• Build Your Own

Buying a property in Spain

Overview

There are a number of steps you need to take before buying a property in Spain.

Basics:

1. Work out your finances: before you visit Spain to look at property, know your budget, (remember to allow an additional 10% of the purchase prices to cover expenses, such as taxes, fees etc). If you need a mortgage Banks usually only lend up to a maximum of 70% of the Banks valuation (not the purchase price).
2. What will the property be used for, a holiday home or a permanent home; your requirements will vary accordingly.
3. List your ideal and minimum property requirements ie location, property type, living accommodation etc, try to be realistic and remember you may have to compromise.
4. Book your trip: some property companies’ offer subsidised inspection trips, beware these can be a false economy, use these only if you are confident they can offer you the property you require at a price you can afford and will not subject you to pressure selling. The best option is to book your own flights (see “flights information” under useful information) and accommodation, then prior to your departure contact the property companies you are interested in, give them a list of your requirements and ask them to arrange viewing for you, this option gives you greater freedom.

Once you have found your Place in the Sun, you will need to do the following:

1. Obtain your 'Numero de Identificacion de Extranjeros' or N.I.E – this literally means 'Foreigner's Identification Number'. (See useful information “Residencia & NIE” section).
2. Appoint a solicitor to start conducting all the necessary searches and make sure all the legal requirements are met. Unless you speak fluent Spanish, it is best that you find one who speaks English and can translate and explain the legal documents.
3. Arrange your mortgage, or alternative finance, if you haven't already. The Euro interest rate is lower than that in the UK and there are many offers available, always check on penalty charges and annual charges as these are quite common on mortgages offered by Spanish Banks.
   
   A number of British Banks offer Euro mortgages on property in Spain, Nat West (http://www.natwestinternational.com/spanish.asp), Barclays (http://www.barclays.co.uk/buyingabroad/spain) and Halifax to name a few.
4. Check and sign the Private (Purchase) Contact which states the terms of the Contract – deposit payable, date of completion, furniture included etc... Your solicitor will talk you through this. This is usually when you pay a deposit and both sides are committed to the transaction. If you wish, you can have a withdrawal clause included in the contract, which allows both you and the vendor to pull out: if you pull out you lose your 10% deposit; if the vendor pulls out, he has to pay you double the amount of the deposit.
5. Pay the deposit to secure the property and for it to be taken off the market. You'll need to be 100% sure this is the home for you as deposits are non refundable if you change your mind.
6. Make sure you are aware of all the costs involved including estate agents fees, taxes, valuation, notary, administration and legal fees. The total is usually between 10% & 15% of the purchase price.
7. Wait for you solicitor to complete legal investigations such as checking that the owner has the authority to sell, whether there's any outstanding debt on the property (as under Spanish law these stay with the property, so if you buy a property that has outstanding debts you will be liable for them) and if it has the full and correct title deeds. Make sure your solicitor also checks with the local planning authorities in order to discover whether there were any plans that may affect the property in the future.
8. Arrange a date for completion. Completion takes place when you sign the public deeds in front of a notary public (notario in Spanish), and pay the vendor in full. This is when the property becomes officially yours, though you still have to register your title in Spain’s property register (registro de la propiedad).
9. Signing the deeds before notary, know in Spanish as the Escritura Publica, has to be done by everyone involved in the sale – buyers and vendors (or their legal representatives). This is normally when final payments are made to the vendor. It is still quite common in Spain (though less common every day) for vendors to ask for a certain amount under the table in cash, which goes unrecorded in the deeds. This is a fiscal fraud, and should be avoided. But, if cash payments are agreed to, they usually take place at the notary’s office, once the notary has left the room.
10. Title will be registered at the Land Registry and your solicitor will advise you when you can expect to receive the full title deeds.