Purchase a Property in SpainUpdated on Monday 18th April 2016
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After the financial crisis, the prices of Spanish properties have decreased and now it is a good moment for buying real estate in this country, if you want to invest. Foreign entrepreneurs who are interested in purchasing properties in Spain should know a few details about this procedure in order to maximize their profits and avoid losses.
Why you need a Spanish lawyer
If a foreign investor doesn’t know the Spanish real estate market and the main regulations related to purchasing a property, it is recommended that he/she contact a law firm in Spain for the due diligence process and the legal assistance for buying the property, no matter if it is a residential building or a commercial space. You may choose a Spanish attorney who is expert in land and real estate legislation, even if you already collaborate with a local real estate agent who tells you that he/she can handle the entire process on his own.
You will need a Spanish lawyer also if you are involved in a dispute related to a property you want to purchase or you have already bought. For buying a property, you may also need a translator if you don’t know Spanish because all of the documents must be translated in order for you to understand their provisions and sign them only after you are sure that you agree with all the provisions.
Before buying a property in Spain, be careful at the tax rates you have to pay at the purchasing and after that. You should calculate if you can afford to pay the taxes required by the local authorities and eventually if you have to renovate or repair the property after you buy it.
What you should check before purchasing
After you decide what property you want to buy in Spain, you should check a few details in order for the process to be completed.
You will need an extract from the Land Registry containing the details about the property to be bought that must be the same with the characteristics of the property mentioned in the contract and the sellers must be the owners of the building/land you buy.
When you or your Spanish lawyers do the due diligence process, before buying a property, it is necessary to check if there are any debts, mortgages or any other charges on the property. Additionally, you must check if there is any litigation related to this property and, at the ending of these, if there is a possibility to lose the property.
The steps to buy a property in Spain
The first step when purchasing real estate in Spain is to reach an agreement with the seller by singing an option contract in order to make sure the owner does not sell the property until the purchase-sale agreement is completed. When signing the option contract, the buyer must deposit from 5 to 10% of the purchase price. The moment of the purchase itself is when the seller and the buyer sign the public deed of sale before notary. You must be aware that the whole process must be supervised by a Spanish public notary.
Once the property is bought, the new owner should register it with the Land Register, as not all properties are registered in Spain.
For more information about buying real estate in Spain, please watch the video below:
Taxes related to buying real estate in Spain
Foreign citizens buying real estate in Spain must pay attention to the taxes to be paid when buying the property and the annual levies. The taxes related to the actual purchase of the property are:
- - the notary fees;
- - the land registration tax;
- - the property tax transfer;
- - the value added tax for properties bought from a real estate developer.
If you need to find out more about the due diligence process when you buy real estate, you may ask our law firm in Spain. Our Spanish attorneys will offer you legal assistance for purchasing the property you choose.