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Buying Property

Spain - Buying Property


As of 2016 there has been a 7.05% rise in house prices in Spain (inflation added) as announced by the Bank of Spain. The market has gradually been strengthening year upon year and both Spaniards and foreigners are purchasing houses in a stronger and stronger market. There has been a sharp increase in foreign buyers over the last four years who now make up over three quarters of all sales.

Generally, estate agents (agencias inmobiliarias) should be a member of the GIPE or API professional associations. Spain lacks regulations over estate agents in the rental market so imitation is rife. The buyer can ask what the estate agent's registration number is and if they are a member of the European Federation of Estate Agents. On top of these approaches, find out recommendations through word of mouth from trusted sources which is a reliable way of filtering out the rogue traders. Check out the local papers and magazines for reputed agencies and view estate agents websites for their full range of properties.

Kyero
Extensive website listing over 200,000 properties in Spain to rent or buy.
https://www.kyero.com/

Rightmove
UK based website listing thousands of properties in Spain for sale.
http://www.rightmove.co.uk/

Spain property portal
Website listing over 45,000 properties for sale in Spain suiting a range of budgets.
https://www.spainpropertyportal.com/

Spain Property showrooms
Website listing thousands of properties for sale with community for estate agents and news on the market.
https://www.propertyshowrooms.com/spain/

Think Spain
English/Spanish website with section on properties for sale including land for sale.
http://www.thinkspain.com/for-sale/

The Spanish News
Online Spanish newspaper in English with property section.
http://www.spanishnews.es/

Costa Brava and Barcelona Buyers' Agents (English speaking)
http://www.shortcutspropertysearch.com/
Email: John@shortcutspropertysearch.com
Tel: +34 609 892 31

Agents fees should never be paid before the completion date or before the buyer signs the title deeds. Fees are usually between 5-10% of the sale price but fees can be as low as 3% which is the Spanish Association of Estate Agents suggested rate. This fee is included within the sale price so the total is one lump sum paid by the buyer. Commission can vary per estate agent so do check out different agents and make sure to find out whether this commision includes all possible extras such as taxes. For cheaper properties there may be a fixed rate agents fee of €6,000 instead of a percentage paid.

Using a Buyer’s Agent in Spain particularly one which speaks English is common practice in Spain. The agent works only for the buyer and usually costs between 1.5%-2.5% of the transaction price. It is useful for buyers who do choose a Buyer’s Agent because the agent is able to advise on negotiations, speak the local language and work with all the agents and vendors in the local area to ease the stress of the buyer managing this themselves. The agents must also have the same qualification as estate agents, and be affiliated to the same associations to be certified.

The following list are sites which offer advice and information on the rights of buyers when it comes to properties, loans and mortgages.

Association of International property professionals
AIPP gives information on agents and where a buyer can complain about an AIPP member or agent.
http://www.aipp.org.uk/

Royal Institute of Chartered surveyors (Spain)
Information on the accredited body with list of members and contacts for a complaint.
http://www.rics.org/

Federal Trade Commision (Spanish site)
Advice on homes, loans and mortgages.
https://www.consumer.ftc.gov/

Citizens' advice
Advice for citizens buying abroad detailing consumer rights, terms and conditions and what the small print means.
https://www.citizensadvice.org.uk/

First in the process of buying a house, the buyer needs to settle on a mortgage. The buyer ideally should have settled on a lender/mortgage broker and have arranged the conditions of the mortgage before they have found the property they wish to purchase. Once the buyer has a property they wish to buy and an estate agent they want to work with the buyer needs to source a trusted, experienced and reputable Spanish lawyer (abogado) to assist with the process. During this time your lawyer gets to work checking the legal status of the property, ensuring that the bills and utilities have been paid, that it is free of charges, loans and debts and that the property has a license for improvements and planning permission. The lawyer will retrieve the A Nota Simple (legal report of the property) from the Property Registry (this can also be done in person by the buyer) to find out such information on the property.

One the property is fully available and cleared for purchase, then is the signing of the preliminary private sale contract (Contrato privado de compraventa) a contract which isn’t official in terms of registry but is legally binding between buyer and seller. A deposit is paid which is usually 5%-15% of the price of the property and is held via the estate agent in a bonded client account. Neither party can break the contract.

Now it is time to get NIE(Número de Identificación de Extranjeros) if you haven’t already. This is an identification and tax number which declares that you are registered with the Spanish Tax Authorities. New legislation as of 2016 means NIE numbers are indefinite despite previously only being valid for 3 months. You may however find that notaries will still refuse NICs more than 3 months old. Be savvy with timings. If you’ve been living in Spain more than 3 months, are a member of the EU and have had your NIE for the same amount of time, register with the government and get a certificate to show your number.

If you need to be represented so that the NIE can be retrieved in Spain you can arrange for a Power of Attorney (Poder Notarial) to get the NIE for you. A trustworthy person can represent you in the house buying process even without you being there, but the signing over must be in presence of a notary (notario). Next is the signing of the title deeds (Escritura de compraventa) by the buyer and seller which is done in the notary's office in front of the Notary Public Once this is signed you receive a copy (Copia Simple) which is also kept by the bank which keeps hold of it until the the clearing of the mortgage loan and the tax office gets a copy too.

After the deed has been signed then the property is registered with the Land Registry (Registro de la Propiedad). The utility companies will receive the information that the names have changed for the bills for the property. It’s now time to pay all of the bills, notary fees (complete with original invoices) Land Registry charges and settle it all with your lawyer. Taxes also need to be paid and whether you live in Spain as a resident or not. Non residents will pay both IBI council tax and imputed income tax whilst residents only play IBI council tax. The process is now complete.

The best way to find a reputable lawyer is through reliable recommendations via word of mouth. Try not to go with those recommended by the estate agent you are working with if possible. Contact the consulate of your country and ask them to give you a list of English speaking lawyers. Make sure the lawyer you go with is a lawyer of Spanish property law(derecho inmobiliario) and are listed in the books of the Spanish Law Society (colegio de abogados) or Local Law Society (local Colegio). You can visit your local local law office (colegio) and finding their registration number.

Generally, the costs of buying a house in Spain are as follows. 10%-12% of the price paid for the purchase will cover fees and taxes which include:notary fees which can cost from €400-€900, your lawyer's fees from €1,000-€2,000 or a fixed fee of €2500 and commission may be on top totaling 1%-5% of the sale price. stamp duty of 1.5% of the mortgage deeds, valuation fees of about €350, Land Registry fees will cost around €200-450, if the buyer is purchasing the house with a mortgage the most is 1% of capital loans. If the property is a resale, ITP transfer tax will cost 8%-10%.If it’s a new build then the buyer doesn’t pay ITP but pays 10% VAT and 1.5% for stamp duty.

Unfortunately sometimes buyers are ripped off by unlicensed lawyers who add on charges and increase the sale price of the property and pocket the difference. Buyers should be extremely aware of such agents. On some occasions, buyers are pressurised into signing contracts without legal representation and without truly understanding the small print. Consequently, what they have signed may mean large expenses further down the line. Make sure you take independent legal advice from experienced and reputable professionals who represent you as the buyer not the seller too.


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