Guide to buying property in Spain
You've found your property, you've checked it's the right one for you and now it's all systems go. So what happens next? We can sometimes assume that the purchasing process in one country is the same as you will encounter elsewhere. However, this is not necessarily the case and that's why you need a guide to buying property in Spain.
The NIE and power of attorney
The first requirement that starts the process of buying a property in Spain is to get your NIE number. Your Número de Identificación de Extranjeros is what you will need to be registered with the Spanish Tax Authorities.
It is an identification number and you can either apply for one personally or through a power of attorney. The power of attorney in Spain (Poder Notarial) is a means of enabling the legal process to continue without the purchaser being there in person. It means that you can nominate someone you trust to represent you in certain transactions.
Once you have your representative and the power of attorney has been signed in front of a notary then you can proceed, whether you are able to be in Spain or not.
The private contract
Any guide to buying property in Spain should emphasise the importance of having a contract checked before you sign. A private contract between the buyer and the seller is signed before the official Title Deed. Although this contract isn't logged on an official register it is considered to be legally binding in law.
It is important that you don't part with any money until you have had the draft contract scrutinised and you are confident that it protects your rights and your money. The solicitor you have appointed will do this for you.
When you sign the private contract you will pay a deposit. If it makes reference in the contract to Article 1454 then there will be repercussions if either the buyer or seller changes their mind at this stage. If it's the purchaser who pulls out they will lose their deposit. If it's the vendor who breaks the contract then they must pay twice the amount of deposit as compensation unless it is written differently.
The private contract also includes agreement about who will pay the expenses surrounding the sale. In practice, purchasers pay everything except the plusvalía which the seller must pay by law. If the property is being sold by a property developer it is illegal for the buyer to take on an expense that legally is the responsibility of the seller.
Signing the title deed
Once the necessary checks have been completed then the paper work will be prepared ready for signing. The Title Deed will need to be signed at the Notary. You have the right to choose the notary who you would like to authorise the signing of the Title Deed.
Signing the Title Deed includes:
- Checking the identity of the seller and buyer
- Checking the description of the property
- Highlighting any debts that are held against the property
- Checking the 'nota simple' from the Land Registry
- Checking that any community fees have been paid
- Requesting proof of payment of the IBI property tax and informing officials of the change of ownership
- Informing those signing of their legal and fiscal obligations following the sale
- Explaining the sharing out of expenses between the two parties
- Managing payment, if it's requested, of the different expenses that accompany the process
You should take this motto as your guide to buying property, 'never sign anything that you don't understand' or that you aren't completely sure about. Once you have signed the Title Deed, you can't go back.
When you sign at the Notary's office you will not be given the original Title Deed to your property but should receive an authorised version known as the Copia Simple.
If you have a Spanish mortgage on the property the Mortgage Deed will be kept with the bank. Once the mortgage is paid then you will be given both documents.
If you purchase without a mortgage you will receive the Title Deed when you register the property at the Land Registry. Make a note of the notary who signed it so that if you do need a replacement at some point you are able to obtain another copy of the original.
Once the Title Deed has been signed then the property will be registered at the Land Registry and the utility companies should be informed of the change of name.
You will need to complete your payments by settling with your legal representative. It is important that you ask for an itemised receipt rather than accepting just a total amount. You should be given original invoices for the notary fees, the Land Registry charges and the taxes you have paid. Make sure that you retain all the documents, invoices, receipts and guarantees for future reference.
Finally, the property is yours.