The purchase of property in Spain consists of three main steps.

Initially, the process begins with the execution of a reservation agreement, usually followed by a deposit, typically around 1% of the property’s value.

Subsequently, the down payment contract, commonly known as ‘arras’, is signed, where about 10% of the property’s value is paid.

The final step is the signing of the purchase deed before a notary public, at which time the rest of the payment is completed, and legal ownership of the property is transferred.

• When purchasing a property, ensure you have the escritura (deeds), town hall rates (known as the IBI), water and electricity receipts, an inventory of furniture, and the licence of first occupation. If the property is part of an urbanisation, obtain receipts for community fees and minutes of the community’s general meetings for the past three years. Verify if any extensions to the property have been made and confirm that the property is fully registered at the land registry.

Before any sizable amount of money is deposited, due diligence is done between the reservation agreement and the deposit contract signing to make sure everything is in order. The property owner needs to provide all the necessary paperwork for your review..

You should obtain an updated extract from the land registry, which will provide the legally registered area, identify the owners, and reveal any encumbrances on the property, such as mortgages, deferred liabilities, or preferential acquisition rights.

Additionally, you will need:

– A copy of the seller’s deed of acquisition.
– A certificate of suitability confirming that the property meets the standards for its intended use.
– An energy performance certificate.
– A certificate from the technical inspection of the building (ITE).
– The cadastral reference, which is the property’s official and binding 20-character alphanumeric identifier.
– Receipts for the last territorial tax (IBI) payment.
– Receipts for the last utility bill payments.
– A certificate from the community of owners confirming no outstanding debts.

It is also advisable to request the most recent minutes from the community of owners and a certificate from the local council verifying compliance with all local zoning regulations.

Note that this list is not comprehensive; additional documents may be required depending on the specific situation.

In Spain, some of the most, frequent issues include, property licences, discrepancies between the actual size and the dimensions registered in the land registry, certificate of aptitude, or cadastre. Unauthorized structural modifications, particularly in attics, are also common. A typical concern is discovering pending maintenance in the building, requiring substantial contributions from each owner, or finding out the building failed its technical inspection. In major cities, one must be vigilant of fines for illegal tourist rentals.

In rural areas, it’s common to find residences built on agriculturally zoned land without residential permits, or unauthorized expansions of the structure.

The variety of potential legal problems varies with the property’s location.

The course of action depends on the purchase stage you’re in. If defects are found during due diligence after making a booking or down payment, you may claim a refund, provided you’ve included such a clause in the reservation or deposit contract. Sometimes, it’s advisable to proceed with the purchase if a discount is negotiated to offset the defects.

Should the defects come to light only after the purchase, you might need to take legal action against the seller. Spanish law safeguards the buyer against hidden defects, but ensuring that the notarial deed protects your rights is always prudent.

The buyer is responsible for all costs associated with the purchase, which typically include:

– Property Transfer Tax (ITP): This can vary depending on the region but is generally around 10%.
– Notary fees.
– Property registration fees.

The seller, however, is solely responsible for paying the capital gains tax on any profit made.

Indeed, non-residents can obtain a mortgage in Spain. It is necessary to approach various banks and examine their terms. Typically, you can secure up to 70% of the property’s value. Banks will require evidence of your financial status in your country of residence before presenting an offer.

Additionally, we collaborate with accomplished mortgage brokers who can assist you in your preferred language.

Upon completion, or shortly thereafter, it is recommended that you execute Spanish wills. Having a Spanish will is strongly advised now that you possess assets in Spain. This is a common recommendation from any competent lawyer.

Following the completion, your lawyer will collect the deed, settle the notary fees and taxes, and register the property under your name.

That concludes the process. The property is now yours to enjoy. Please reach out if you require any additional assistance.