It is well known that Spain is a touristic haven for foreigners since decades. Since the economic crisis of 2007 and the more recent global shifting of the borders of our security, Spain became for a growing number of people from all over Europe their favourite destination. All people who are looking to buy a dream “second” home or a solid investment in real estate, consider Spain. Buyers are looking for the sun, sea and security. And today Spain is the best place to find just that.
Whether you buy to enjoy it yourself or as an investment or both, there are some very important factors to take into consideration when buying. We now give you some pointers which can help you with your purchase.
A purchase very often is a dream and you see sometimes that people are a bit too fast and even a bit reckless in their actions and decision making. Remain rational and make sure you have good knowledge of the area where you wish to buy. Also make sure you have good knowledge of prices and compare both sales and rental prices. Would it be profitable if you ever decide to rent it out? We also advise you to look at different properties. This way you get a good feel of the market.
If you are considering buying a permanent home in a region you primarily know from your summer holidays, we strongly advise you to visit this region during the different seasons. This way you will get a better understanding of what this region is like with regards to weather, crowds and general ambiance. That cozy crowded bar downtown you like so much, might not be that crowded during winter...
Checking the property
When visiting different properties, you might be asked to put your name on a list and sign it. This usually means that the property is listed at different agencies (which is completely legal in Spain). This autograph will only be used in case there is a dispute between agencies. For you on the other hand there are no obligations attached to this signature.
Once you have found your dream home, it is important to see, or have an expert see, if the property is free of any financial burdens and that the seller also is the legal owner. For this you will need a “nota simple”, which you can ask for at a registration office (“registro de la propiedad”). This is a crucial step during any purchase. The administrator, in case needed, will also give you information regarding the state of payments and the state of the property. The documentation of your purchase, in general happens in 3 steps, each with their own contract, commitments and timing.
Closing the deal
You sign a reservation document or “reserva”. In this document the purchase price is agreed and when signed, the property is taken off the market. You pay a small amount, normally no more than 1% of the total purchase price. Make sure your reservation contract contains provisions, which can break the sale contract in case of severe problems or in case of irregularities when checking all documentation.
The final contract
The “contrato de arras” is a very important legal binding between buyer and seller, in which the buyer pays 10% of the total purchase amount. When you are absolutely sure that you want to buy the property, the contract will be signed. “Arras” will give you as a buyer, security about your purchase. Do realise that when signing an “arras” contract, it is very hard to get out of it afterwards. It takes normally 4 to 6 weeks between signing the “contrato de arras” and the signing of the notarial act. In the mean time, you will have to get your NIE number (a Spanish identification document) and you open
a bank account with a Spanish bank. It is also an option to have the NIE application done by someone who is representing you during the buying process. As the buyer, it is your right to choose the notary. The notary will ask the selling party for the required documents. Take into account that the role of a notary in Spain is limited, much narrower than in many other countries, and therefore it is recommended to go with a specialist for checking and preparation of the documents.
The big day is finally here and you go to the notary! The deal is closed, you pay the agreed amount through a bank cheque and you receive the keys! As the buyer, you choose the notary and pay their fees.
You are now the proud new owner! The property now must be registered at the registration office (“registro de la propiedad”). It is important to know that after the purchase it is necessary to pay the purchase tax. (“ITP”, or Impuesto sobre Transmisiones Patrimoniales”). This tax differs per region. In Catalonia this is for example 10% of the total purchase amount. For other regions, click here.
As the new owner, the only thing left to do is to fully enjoy your purchase, or rent out the property, so you enjoy a nice extra income.