Buying safely in Spain is different from buying in Belgium. For example, the buying process is different, different laws apply and there may be consequences for your taxes or estate. In this article you will find three tips on buying safely in Spain.
Tip 1: Inform yourself beforehand
When you start the search for a Spanish property, it is advisable that you inform yourself beforehand. For instance, this week we received a message from someone who recently bought a newly built Spanish property as an investment. The main purpose of the purchase was to rent out the property to tourists. However, the man was incompletely informed about the obligations of local rental legislation and is considering selling back.
If you have specific plans such as emigrating, starting a commercial activity, renting, or buying through a company, then sit down with an expert first. That way, you avoid unwanted surprises.
Tip 2: Know what you are buying
The duties of a Spanish notary are limited. For example, he does not do extensive legal checks on the property like a Belgian notary. As a result, you take over any (legal) defects, such as building violations, or debts on the property.
Last month, for example, we were contacted by a lady. She had bought a villa near Altea, but some three months after buying it, she received notification from the municipality that her front garden was being partially expropriated for works. This situation could have been avoided if the necessary searches were made. Had she known prior to purchase that an expropriation procedure was underway, she might not have bought the villa.
Read more about the notary in Spain.
So appoint a legal service provider to do the necessary research before you purchase.
Tip 3: Buy safely in Spain = don't sign the compromise too soon
In Spain, a purchase usually involves three agreements: a reservation contract, the compromise and the notarised deed of sale.
With a reservation contract you take the property off the market for a certain period in exchange for a reservation amount of +- 3,000 euros. The reservation contract is therefore not a binding sales contract, but it allows the seller to temporarily stop selling the property to others.
In the compromise, you clarify the contractual arrangements between buyer and seller. The compromise is therefore a legally binding (private) purchase agreement. With it, you buy the property and usually pay an advance of 10% minus the reservation amount. However, once signed, you cannot recover the paid advances.
Finally, based on the compromise, there is the notarised deed of sale with which you formalise the purchase.
Importantly, after viewing the property, you should does not immediately sign the compromise. For example, we recently dealt with a case of a sale on plan. The building permit for the flats appeared to be in order, but the permit application for the urbanisation's communal pool had not yet been approved. This seems like a minor issue, but know that the lack of a permit seriously complicates subsequent completion. The compromise was then adjusted so that payments were (partially) conditional on all permits for the urbanisation being issued.
It is better that you first have a reservation contract drawn up that clearly states that you make the purchase conditional on the positive outcome of the legal searches. That way, you are not bound and you know what you are buying before final purchase. Also, you can still recover the advances paid.
Do you have questions about buying in Spain, taxes or inheritance law? Then contact us without obligation. We are happy to help.
