7 FAQs about Buying a Property in Spain

Sponsored by Klev&Vera International Law Firm.

The process of buying a property in Spain can be very different from other countries. Many expats are often surprised that the role of the real estate agency here varies greatly from that of their home country. Agencies here are generally not forthcoming to buyers during the purchase process as they usually represent the seller.

1. What Is the Process of Buying a Property in Spain?

There are three main steps. Once you have finally found the property you would like to buy, you start the process by signing a reservation agreement. This usually involves paying a deposit of about 1% of the purchase price. The agent will often bring a prepared form outlining the conditions of the deal and will push you to sign it on the spot.

Then comes the downpayment contract, the arras, in which you will normally be required to pay 10% of the purchase price. Finally, you will need to sign the purchase deed at a notary public, where you will pay the remaining balance of the agreed price and you legally become the owner.

2. At what point is due diligence done and how does it normally happen?

Ideally, due diligence would take place between the reservation agreement and the signing of the arras contract so that you can make sure that everything is in order before putting down a significant amount of money. The seller or agency is obligated to provide you with all the necessary documents to review. However, what commonly happens in practice is that the buyer is provided with the absolute minimum amount of information and then often discovers many characteristics of the property only after becoming the owner.

3. What Documents Should the Buyer Request to See?

The most important one is an updated extract from the property registry. This document will tell you what the legally registered surface is, who the owners are and if there are any liens on the property, such as a mortgage, a deferred liability, preferential acquisition rights, etc.

Apart from this, you also need to see:

• A copy of the acquisition deed by the seller.
• Certificate of fitness verifying that the property is up to code for its intended use.
• Energy efficiency certificate.
• Certificate of the technical inspection of the building (ITE).
• Cadastral reference (the official and binding identifier of the real property, a 20-character alphanumeric code 20).
• Last paid land tax (IBI).
• Last paid utility bills.
• Certificate from the community of owners that there are no pending debts.
• We also recommend requesting copies of the minutes from the most recent community of owners meetings and a certificate from the local town hall to ensure that the property complies with all local zoning laws.

This list is not exhaustive; additional items are often needed, depending on the circumstances.

4. What Are Some of the Most Common Problems That Come up during Due Diligence?

If we are talking about city apartments, then frequently found issues are that the surface area is different from that stated in the property registry, certificate of fitness or cadaster, or that structural changes or additions were made without the necessary permit—especially in penthouses. One of the most common issues is to find out that some works are pending in the building and each owner will need to contribute a significant sum, or that the building didn’t pass the technical inspection. In big cities, especially Barcelona, you need to be careful with potential fines for illegal tourist rentals.

In rural areas the most common problem is that the residence was built on land that is zoned for agriculture and not dwellings, or that there were extensions made to the structure without a license.

In fact there can be a wide variety of potential legal issues that can arise, depending on the area where the property is located.

5. What Are the Rights of the Buyer If Any Hidden Defects Are Discovered?

That would depend on the purchase stage. If you discovered any defects during the due diligence process after paying the reservation or the down payment, you can claim to get it back. However, to be able to do that it is important to include such a clause in the reservation or arras contract. It might make more sense to continue with the purchase but request a discount in the final price to compensate for the defect.

If defects are discovered after the purchase, it is quite likely that you would need to sue the seller. Spanish law protects the buyer in case of hidden defects, but it is always best to make sure the notary deed covers your rights in this sense.

6. What Are the Purchase Taxes and Who Pays Them?

The buyer generally pays all the purchase related expenses such as:

• Property transfer tax (ITP)—may vary depending on the region but usually about 10%
• Notary fees
• Property registry fees

The seller always pays the capital gains tax—the plusvalia.

7. Can a Non-resident Get a Mortgage in Spain?

Yes, it is possible. You will need to get in touch with a few banks and study their conditions. The maximum amount you can expect to get is 70% of the purchase price. The bank will request proof of your financial status in your home country and,  depending on that, will make you an offer.

Anna Klevtsova is managing partner of Klev&Vera with over 18 years of experience in public service and international cooperation projects. Anna leads the corporate and immigration practice, specializing in company formations, investment transactions and immigration strategies. Anna is fluent in English, Russian, Spanish, and also speaks French and Catalan.

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Updated May 1, 2022.

Sponsored by Klev&Vera International Law Firm.

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