Buying A House In Spain Without Risks

Buying a Home Safely in Spain

In collaboration with the Association of Spanish Property and Commercial Registrars, the Ministry of Public Works, Transport, and Housing has created a simple, straightforward document that outlines the various stages and suggestions that a private buyer should follow when purchasing a home in Spain.

It is open to any buyer, whether they are Spanish or from another country, and it is completely free. It strives to help such buyers make educated choices.

There are a number of documents that attest to a house’s entire legality within the Spanish legal system. Before buying a house, make certain you have each of them ready. These are:

A building permit and certification from a qualified expert attesting that the structure complies with the project’s specifications and the license given by the town council.
A first occupancy permit, a certificate of habitability, and other administrative authorizations that prove the house is legitimately livable.
The utilities that provide the necessary services (electricity, water, gas, and telephone) have to sign the documents.
The building’s registration in the Property Register (for new construction) and insurance coverage against construction errors or hidden deficiencies, as required by law.
A Property Registration Certificate outlining the structure’s status legally.
Statutes governing owners associations (or inscription in the Property Register of the deeds of any new, finished and horizontally-divided building).

For brand-new constructions, prospective buyers should request the following documents from the developer: a Commercial Registry Certificate attesting to the company’s legal existence; information regarding its registration; the administrators and/or their representatives; the company’s registered office; its fiscal identity number; confirmation that bankruptcy proceedings have not been registered; and a statement that there are no claims, lawsuits, or other potential contingencies that could affect the development.
A certificate stating that the property you are purchasing is current with all payments, signed by the owners association president and endorsed by the building secretary, as well as a formal confirmation and a public document stating that the property is not subject to any rental contracts should be requested in the case of non-newly constructed housing.

There are a number of procedures you may take while purchasing real estate to provide yourself complete assurances:

1. Contact the Property Registry to find out the property’s legal status.

The Property Registry is a government agency, and the Registrars are employees of the government who are able to give you verbal information about the legal status of the property without charging you for it.

The Property Registry contains the following details regarding each residence:

A description of the property, including its location, surface area, the portion under common ownership in an apartment building, the administrative system that may have an impact on it (such as whether it is subsidized housing), any mortgages already in place, their expiration dates, the capital, interest, and costs associated with them, any embargoes to which the property is subject, any litigation that may have an impact on it, and whether or not proceedings for zoning violations are ongoing. If you specifically ask for it, you can also learn about the title deeds, the mortgage stipulations, the amount paid in prior ownership transfers, and the statutory framework for apartment properties.

The Property Registry can provide you with this information in the form of a simple informative note, or in the form of an ownership and liabilities certificate, which is an official public document. In addition, you can also ask the Registry to issue an explanatory report describing the registration position of the property.
In Spain, regardless of the municipality where the property is located, any Property Registry can give you these documents. Additionally, you can request this information via the Association of Property Registrars’ website at www.registradores.org, via fax, mail, or email.
When requesting one of these certificates, you will be required to provide proof of your identity as well as information that will enable the property for which the certificate is being requested to be identified, such as registration information (the registered property number, the section, the municipality), owner information (name, surnames, corporate name, fiscal identification number/fiscal identification code), or other straightforward information like the street and house number.

2. Study the existing mortgage charges

In addition to the legal requirements, it is important to pay attention to whether the property you are going to acquire has a mortgage (if this is the case, it will appear in the Property Register). If so, we recommend that you:

Request a bank certificate from the vendor showing the outstanding balance.
Negotiate a better interest rate with the bank. Hypotea will help you to compare offers from multiple banks in one go. You are not required to take over the mortgage loan that the vendor arranged with you under the same terms; instead, you can request its cancellation or get a new loan from a different institution.

3. Go to a notary to carry out the purchase and sale

Additionally, notaries are independent public officials with the power to attest documents and a duty to advise parties about the applicable laws at the time of the sale. Additionally, it is their responsibility to draft the contract in accordance with the wishes of the parties and to conform it to the law. The agreement is presented as a public deed.

The public deed is essential in order to register the sale in the Property Register and to benefit from the security it gives you, as explained in point 5.
Before he or she authorises the sale, the Notary shall request a non-certified extract from the Property Register. You may therefore review the legal status of the property again at this point.
If you have any doubts, ask the Notary before you sign, it is his or her role to advise you.

The sales contract may have been previously formalized by both parties in a private document, but if it is not changed into a public deed, that document will not have all the legal guarantees.

The Notary in Spain performs their duties at the moment of the transaction, but they can also provide you advice beforehand, much like lawyers and agents would in your home country.

4. Make sure you pay the corresponding sales taxes

Purchasing and selling property in Spain implies payment of certain taxes:

When buying a new property, you must pay VAT to the vendor.
When buying a used property, you must pay the Tax on Capital Transfers through one of the banks recognised by the Government.
In both cases, if you buy via a mortgage you must pay the Tax on Documented Legal Acts to a Tax Authority account through the collaborating banks.

5. Register as owner of the property in the Property Register

Visit the Property Register pertaining to the property’s location to register the sale once the transaction has been completed and the taxes have been paid. Although registration is not required, buyers who do so are completely protected as the proprietor:

What appears in the Register is presumed to be true and can only be modified by a judge.
Nobody may dispute your ownership of any property that is still unregistered at the time of the transaction, and anyone wishing to record a document may only do so with your permission or through a court proceeding to which they were a party.
You shall be protected against the vendor’s creditors and against any charges that may occur which have not been entered in the Register.
Even if a judge finds that the agreement under which the person who sold you the property initially acquired it is invalid for reasons that do not appear in the Register, you will still be protected.
You should also be aware that under Spanish law, even if the vendor was not aware of a concealed defect, the vendor is nonetheless responsible for it if it is present at the time the property is sold or is later discovered. This suggests:
The buyer has the option to either waive the sale (paying the vendor the costs he or she has paid) or to a price reduction, duly defined by official experts, if the property does not meet the quality objectives in the habitable indoor space as stipulated by current legislation.
You may enforce liability on the building’s developer and the builder and the technical supervisor for structural construction defects that may occur during a period of 10 years; for damages that may affect the building’s habitability for a period of 3 years; and for damages caused in finishing defects for a period of 1 year.
Spanish Law requires those persons who may be liable to have insurance coverage which guarantees that you may recover indemnity without any problem, should this be the case.