Buying a Property
The problems associated with
buying property abroad have been highlighted in the last decade or so, during
which the property market in many countries has gone from boom to bust and back
again. From a legal viewpoint, Spain isn’t one of the safest
places in which to buy a home, although buyers have a relatively high degree of
protection under Spanish law. In the
last few decades, buying property in Spain has been the subject of much
adverse publicity, both in the foreign and Spanish media. Some people have even gone so far as to
advise foreigners not to buy in Spain!
However, although the pitfalls must never
be ignored, buying property in Spain
needn’t be a gamble. There are more
than two million foreign property owners in Spain and many millions of Spanish
owners, the vast majority of whom are happy with their purchases and
encountered few or no problems when buying their homes. This should be borne in mind when you hear or
read horror stories concerning foreign buyers in Spain. We are not highlighting the possible dangers here
in order to discourage you, but simply to ensure that you go into a purchase
with your eyes open and to help you avoid problems. Many foreign buyers encounter problems
because of their own lack of judgement or foolishness. If you plan to buy in Spain, follow this maxim - If you wouldn’t do it in your
home country, don’t do it in Spain!
Employing Professionals There are professionals
speaking English and other languages in most areas of Spain, and many
expatriate professionals (eg architects, builders and surveyors) also practice there.
However, don’t assume that because
you’re dealing with a fellow countryman that he will offer you a better deal or
do a better job than a Spaniard. Would
you imagine Spanish architects, builders and surveyors operating in the UK are
better than the locals? It’s wise to
check the credentials of all the professionals
you employ, whatever their nationality. It is utter insanity to rely
solely on advice proffered by those with a financial interest in selling you a
property, such as developers and estate agents. Avoid the “cowboy”
agents and anyone who does property deals on the side – the “man in a bar with
a mobile” – as dealing with them often leads to heartache and it could also be
dangerous!
Subrogation
One of the Spanish laws that
property buyers should be aware of is the law of subrogation, whereby property
debts, including mortgages, local taxes and community charges, remain with a
property and are inherited by the buyer.
This is an open invitation to dishonest sellers to “cut and run”. It’s possible, of course, to check whether
there are any outstanding debts on a property and this should be done by your
legal advisor and/or the notary when signing the preliminary contract and again
a few days before the completion, although the system isn’t foolproof. The notary should always obtain an up-to-date
notification from the property registry office (Registro de la Propiedad) on the day of completion.
Legal Advice
Buying Off-Plan
Buying Land
Cowboys
Common Mistakes
Common Problems Recent Legislation
WARNING
Never sign anything, or pay any money,
until you’ve sought legal advice in a language in which you’re fluent, from a
lawyer who’s experienced in Spanish property law. If you aren’t prepared to do this, you
shouldn’t even think about buying a property!
Letting Your Property
If you let a property in Spain, you’re required by law to pay tax on your
rental income in Spain
and not in the country where the income is received. Since July 1995, all legal short-term
“tourist” letting in the Canaries has been conducted by registered letting
agencies, thus ensuring that income tax is paid on earnings. In other parts of Spain, the authorities have a
problem getting foreign, non-resident owners to comply with these regulations so
many authorities have been turning a blind eye. However, there are fines of up to €6,000 for
offenders! Several regional governments (including in Andalucia)
have advanced plans to follow the example of the Canaries and it’s expected
there will be widespread clamp-downs on illegal letting.
Contracts
Using an Agent
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