Buy a Property in Spain - Good to know about costs
The process of buying a house in any country can be complicated and confusing. When you are purchasing a property abroad, it’s even more so. How long will it take? Who should be involved? What can you do to ensure that you buy safely?
There have been mistakes made in the past and there have been some high profile bad experiences. However, buying a house in Spain is straight forward if you take one step at a time with the right conveyancing experts.
Here we outline the steps to buying a house in Spain:
Step 1: do your research
You’re out in Spain, you see the perfect property, you want to put in an offer before you go home. Stop! This is where people make mistakes. Sometimes impulse buys can work well – especially when it comes to the odd item of clothing or a gift. When we are talking about an investment as significant as a house, it’s really not a good idea.
You need to take your time, check out the area, consider what your needs will be, not only now but in five or ten years time. Rushing into a property purchase is probably one of the main mistakes that people make.
Step 2: find a solicitor
When you have found the right property for you, you need to make sure you engage the right help to check it out. Your choice of solicitor is an important step in the process of buying a house in Spain and they must look after your interests.
Your solicitor should:
- be able to communicate easily with you – make sure they speak your native language well
- be accessible – if you are still abroad during the purchasing process how will you communicate?
- have a good reputation – always try and make sure that you speak to someone who has used them before
- have been established for a while – you want to be assured that your solicitor has the experience and is trustworthy
Step 3: complete property checks
Make sure that the correct property checks are completed including:
- The Legal status of the property
- That it’s free of debts and charges
- That utilities and community fees are paid
- That there is correct planning permission and licences for improvements
Your solicitor should check these for you and you should ask for confirmation that these checks have been completed.
Step 4: sign the private contract
The next in our series of steps to buying a house in Spain is when your solicitor gives you the green light and you can sign the private contract. The private contract isn’t logged on an official registry but it is considered to be legally binding and must be checked before you sign it.
When you sign the contract you will pay a deposit. If you, as purchaser, break the contract you will lose your deposit. If the vendor is the one who defaults then you are entitled to twice the amount of your deposit as compensation by law unless it is written differently in the contract.
Step 5: obtain NIE and power of attorney if necessary
During the process of buying a house in house in Spain you will need to obtain an NIE if you don’t already have one. The Número de Identificación de Extranjeros means that you are registered with the Spanish Tax Authorities. It must be applied for personally at the Foreigner’s Office or National Police Station.
If you can’t be in Spain when you need to apply for the NIE one can be obtained on your behalf through a Power of Attorney (Poder Notarial). You can nominate a trusted individual to represent you in certain transactions and you can sign the power of attorney in the presence of a notary. This means that the purchasing process can still go ahead without you being there.
Stage 6: sign the Title Deed
The Title Deed needs to be signed at the Notary’s office. At this stage you will also make the final payment and receive the keys.
When you sign the Title Deed you will not be given the original document immediately but an authorised version known as the Copia Simple. If you have a mortgage, the bank keeps the original of the loan Deed until the loan is cleared.
Stage 7: register at the Land Registry
Once the Title Deed has been signed then the property will be registered at the Land Registry and the utility companies should be informed of the change of name.
Stage 8: pay the bills from the purchase process
You will need to complete your payments by settling with your legal representative. You should ask for an itemised receipt rather than accepting just a total amount. You should be given original invoices for the notary fees, the Land Registry and the taxes you have paid. You should keep all the documents, invoices, receipts and guarantees – you never know when you might need them.
Stage 9: put your taxes in order
It is important that you make arrangements to pay your taxes once you have your property in Spain. What you have to pay will depend to some extent on whether you are a resident or not. Both residents and non-residents must pay IBI council tax. However, non-residents must also pay imputed income tax in Spain.
Congratulations. Your have reached the final stage in our steps to buying a house in Spain. Step-by-step you have purchased a home in Spain and should feel confident that you have done so safely. By taking good advice, one step at a time, you can now look forward to many years of Spanish home ownership. Enjoy your new home!