MY COSTA BLANCA VILLA

Paperwork associated with buying a house in Spain

 

Número de Identidad de Extranjero (NIE)

Put simply this is an identification number for foreigners. You will need it for anything that involves an official process in Spain so it’s worth applying as soon as possible to avoid delays. You will need the NIE number before signing the 'Title Deed' for your property, which in practice means applying at least one month before you expect this to happen.

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Nota Simple

This is a simplified version of the 'Title Deed' outlining what is registered at the Land Registry, who owns the property and whether there are any monies owing on it. The Nota Simple should be available from your estate agent, and you (or your solicitor) must review it before signing a Reservation Contract and paying the associated fee.

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Reservation Contract (Documento de Reserva)

At the point you make an offer on a property you may be asked to sign a Reservation Contract. This will mean the property is taken off the market and the seller is bound to sell it to you at the stated price. You will be asked to pay a deposit which you will lose if you pull out of the sale, unless the sale cannot proceed for legal reasons. The deposit is usually around €5,000. At this point you will sign the ‘Reservation Contract’. Make sure your solicitor checks this over before you sign. You are not committing to buying the property at this point, simply taking it off the market.

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Private Purchase Contract (Arras)

Once all checks have been completed and details of the sale have been finalised, a Private Purchase Contract will be drawn up. By signing this contract and paying a further, more substantial deposit of around 10% of the cost you are making it clear that you intend to purchase. You are now committed to buying the property. If the seller pulls out after this stage, they will be liable to return twice the deposit you paid.

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Power of attorney (Poder Notarial)

This gives your legal representative permission to act on your behalf in terms of making payments and signing deeds. This is particularly useful if you currently live in a different country.

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The Title Deed (Escritura)

The signing of the Escritura completes the sale and must be done in front of a notary. This will include the payment process and details of all final arrangements. After making this payment you will receive the keys to your new property.

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The Land Registry must be informed of the change of ownership within 10 days. Your notary will be able to arrange this if you request it.

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Appointing a notary

As the purchaser you have the right to choose which notary you will use but it is worth making sure they are local as you will need to visit in person unless you rely on Power of Attorney. A notary is employed by the Spanish government to certify legal documents, in this case those associated with the property sale. The notary will not normally get involved until the end when they will carry out a few basic checks, arrange the signature of the title deed (or Escritura) and sometimes register the property.

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Legal status of holiday lets

If you plan to let out your home on a short-term basis you must make sure that you are acting in accordance with Spanish laws. There are restrictions in many areas, not just on letting a private residential property but also marketing it to tourists. Rules will vary depending on the region in which the property is located and fines can be significant if you are found to be acting illegally.

If you plan to buy a community property, make sure you check whether there are any rules that might stop you from letting the property out.

Things to remember:

• You are required by law to obtain an energy efficiency certificate.

• You should notify your insurance company of your intention to let the property.

• You must declare your rental income to the Spanish authorities.

You can find out from the local town hall or tourist department of the regional government what the laws are for short term lets in your particular area. If in doubt it is always worth seeking independent legal advice.

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Insurance

You will need to bear in mind the cost of insuring your property in Spain on an ongoing basis. The cost of this will vary greatly depending on the type of property and what you plan to use it for.

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Important questions to ask BEFORE handing over any money:

These questions are not as scary as they sound – you, your agent, or most likely your lawyer can get all this information from the Land Registry.

• Does the person that owns this property have the right to sell it?

• Are all planning permissions in order, particularly if this is a new build?

• Are there sitting tenants in the property?

• Are there any building restrictions on the plot?

• What’s the cadastral value (the council’s valuation) of the property? This will inform the purchase tax you will need to pay.

• If the home is new or off-plan, is there insurance in place in case of structural defects?

• Is there any money owing against the property, i.e. - Mortgage - Utilities - Court judgements - legal proceedings or annual real estate tax.

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