Today, Spain is one of the most attractive European countries for living and investment for many factors: from a favorable climate, relatively low prices for life, social welfare to security and a gradual but stable way out of the economic crisis. For these reasons, for many years, foreigners have preferred buying real estate in this country both on the coasts (north and south), and in large cities in the center of the country. In addition, all conditions are created for this. Compared with other European countries, Spain has the most “soft” laws in the field of purchase and registration of real estate, even equalizes the rights of its citizens and foreigners. To buy a house, apartment or land, it is not necessary to have a residence, a residence permit in Spain.
The first step – Search for real estate: online or real estate company
The first step on the path to owning Spanish real estate is to search for an object, comparing various options. You can do this on the most popular sites or by contacting a real estate company. The largest database of real estate offers the portals idealista.es, fotocasa.es. There you can view offers throughout Spain with the ability to “filter out” the necessary characteristics. But given the seriousness of the case, it is better to contact a real estate company. The advantages of working with agents are, firstly, experience and professionalism, and secondly, geographic awareness – characteristics of districts, residential complexes, infrastructure, and thirdly, owning a database that is not accessible to Internet sites.
The second step – preparation of payment (bank account and NIE)
To purchase property in Spain, the buyer requires an account with a local bank to transfer the transaction amount. You can open it in any of them, for example, in LaCaixa, Sabadell or BBVA – first you need to collect and provide a package of documents, such as, for example, a certificate of employment, personal income tax, and only after that it is possible to open an account.
You can do without opening an account – using acta de requerimiento at a notary public. The buyer transfers the money to the notary and instructs him to pay for the purchase on the day the deed is signed. In this case, the notary receives a percentage of the amount transferred to the notary, and the client “bypasses” the item with the opening of a bank account in Spain.
Also, the buyer must receive a NIE certificate (tax number of a foreigner by which you can buy a car, real estate, pay taxes, etc.) You can get it both in Spain and in any other country in the world. In Spain, this can be done by contacting the police, or by applying for a trip at a consulate in your country.
The third step is the contract of the Reserve and Arras
Real estate transactions are usually associated with large amounts and high risks – there will always be scammers who are ready to circle customers around the finger. Especially foreigners who find it more difficult to distinguish a dirty trick abroad and subsequently punish those responsible and compensate for the damage. In Spain, this is well known … Therefore, here, and not only among foreigners, it is customary to conduct sales transactions not directly between the buyer and seller, but only through notaries.
In Spain, there is a practice until the conclusion of the purchase and sale transaction, to draw up several preliminary agreements between the seller and the buyer (not necessarily all) – a reserve agreement or intention to acquire real estate, an arras agreement (making a deposit by both parties). Note that not one of them is certified by a notary. The first to sign a reserve agreement, through which the property, as it were assigned to a potential buyer, is not put up for sale (depending on the seller and / or realtor, the amount of the reserve is negotiated).
This document is not a mandatory step, but at its conclusion the parties are obliged to comply with its obligations. As you can see, it also defines the terms for making a deposit by both parties (arras), as well as the purchase and sale transaction itself. Be careful, very often the owner or realtor tries to give out a reserve contract, an agreement that requires the buyer to buy a reserve object. It will be possible to break such an agreement only through a court.
Arras contract – guarantee for both parties
As for the deposit agreement (arras), between the buyer and seller, clauses such as:
- who is the responsible person on the part of the Seller,
- are there easements on real estate,
- transaction amount
- terms of transfer of ownership of real estate,
- responsibility for covering expenses during the transaction, etc.
So, for example, if a construction company or a real estate agency is engaged in the sale, only a person authorized to do so has the right to put a signature. In the case of a transaction between individuals, signatures must be put by all owners with ownership of the object. If the family’s acquired property is sold, then both spouses. Otherwise, the transaction may be declared invalid.
Note that arras also does not sign with a notary. At this stage, both parties contribute the agreed amount (usually it is 10% of the value of the object). This is a kind of demonstration of the seriousness of the intentions to complete the transaction and it is possible to terminate such an agreement only with certain losses: according to the law, if for some reason the Seller decides to cancel the operation, the Buyer will receive a double advance payment back. But if the transaction is not completed at the initiative of the Buyer, then the guarantee, in turn, remains with the Seller.
Types of Arras Contract
There are three types of this contract – Contrato de arras confirmatorias (confirming deposit), Contrato de arras penitenciales (deposit in case of refusal), Contrato de arras penales (penalty deposit), each of which is regulated by a separate article of the Civil Code of Spain.
- Contrato de arras confirmatorias (confirming advance payment),
This type assumes that the advance amount is a guarantee of the strength of the contract. Moreover, its failure to fulfil does not mean that the deposit has been lost. If one of the parties refuses, the other has the right to apply to the court to recover the loss incurred or to demand the fulfilment of obligations.
- Contrato de arras penitenciales (advance payment with the possibility of failure)
If the buyer refuses the transaction, he loses his security deposit. But if the seller refuses, then he is obliged to return the advance payment in double size. The issue is resolved without going to court. This type of contract is the most common in Spain.
- Contrato de arras penales (penalty deposit)
If the buyer refuses, he will lose all or part of the advance payment, and the seller in full plus the amount agreed in the contract or doubly. In addition, both parties have the right to apply to the court for the enforcement of obligations. The judge may also change the amount of damages.
The fundamental information is accurate information on the availability of communal debts, as well as information on whether the object is encumbered in any form, whether there are easements (a limited right to use other people’s property) that impede the transaction. Usually, before signing a transaction, realtors provide clients with a Nota simple informativa, which contains information about the object, but you must keep in mind that all the information that is contained in the Note simple is for informational purposes only. But if you want to get complete and accurate information about the object, it makes sense to order a Certificate, which can be requested in the Property Register.
Please note that if you ignore, for example, clauses on communal debts, then, oddly enough, the Law obliges the Buyer to bear material liability for them. It is necessary to clearly stipulate the final cost, as well as the form of payment with the Seller. If this is specified in the contract, the buyer will protect himself from additional costs, because circumvention or violation of the clauses is a violation of the law. As mentioned earlier, payment can be made not only from the buyer’s account, but also through a notary public who will transfer the amount on the day the transaction is signed. In addition, the buyer can bring a check written in advance for the required amount from the bank. In a transaction between private individuals, it should be agreed what expenses and taxes each party pays. The only exception is the surplus value tax,
The fourth step – Taxes when buying a property
By the way: Within 6 months after the conclusion of the purchase and sale transaction, the seller is responsible for hidden defects discovered during this period. In this case, the seller can demand the repair of the object, or compensation of expenses, or cancellation of the transaction with the return of the paid funds to the buyer and with the return of the property to the seller. There are hidden shortcomings of real estate that only specialists can open. Moreover, the analysis, verification of documents is performed not by a notary, but by a lawyer. The procedure for buying real estate in Spain on average takes about 2-4 months, and the period largely depends on the speed of preparing a package of documents. In order not to become a victim of scammers, remember that the buyer should not make any money, including a deposit, without signing the relevant document. The only guarantee and guarantee of your peace of mind is cooperation with notary specialists, lawyers or assessors.
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