Guide to purchasing property in Spain.

Buying a property is one of the most exciting and important projects in our life. If the property to be purchaesed is outside our home country, it usually creates additional excitement, as it will be either the place to enjoy holidays or a new home for a new life abroad.

The excitement and importance involved in the purchase are good enough reasons to consider the issue as a serious matter an not to be undertaken lightly. Therefore, our first advice for people planning to buy a property in Spain is to bear in mind that the procedure to complete a successful and plesant transaction requires an accurate knowledge and understanding of the legal formalities and obligations to be fulfilled both by the vendor and the buyer.

Only registered Spanish lawyer can guarantee proper and professional advice about the legal considerations to be taken into avvount. Once the decision to buy a certain property has been taken and the price has been agreed with the vendor, the wisest move is to instruct a local lawyer to start dealing with the legal issues involved. The main point at this stage is neither to sign any document nor deposit before  your lawyer provides you with his/her professional advice about the best way to proceed.

First of all, your lawyer should provide you with an approximate estimate of all cost and taxes involved in the purchase procedure: Notary, and Registration fees, Transfer Tax/IGIC (Canarian VAT), Plusvalía Tax (If any), compulsory tax retencion for cases in which the vendor is not a Tax Recident in Spain, etc. Once you know the total amount involved in the purchase you will be able to confirm whether or not you are financially ready to proceed.

Secondly, your lawyer should check the legal situation of the property in orden to avoid any kind of unpleasant surpriseses regarding mortgages, attachments or any other kind of problems that could affect your ownership after completion.

Once confirmed that the property is free of those encumbrances, your lawyer will be in a position to draft a private document between you and the vendor, in whichall the terms and condition of the agreement will be ratified on paper. The usual practice is to draft an „option contract“ by means of which the vendor grants an option in favor of the buyer to have a priority to buy the property within a certain term and according to the conditions agreed. The buyer is normally required to pay a deposit in advance (5%-10% of the price) to optain this option from the vendor. This document is of huge importance to secure a safe outcome for your interests, as it is the contract in which both parties definitively state essential issuessuch as the price of the property, the payment conditions and the prospective compensations to be awarded in case of breach of contract.

Allthough private contracts are fully valid and enforceable according to Spanish Law, the Spanish property system requires the previous notarisation of every document to be registered at the Land Registry. Therefore, the next step in the purchase procedure is to sign the Public Title Deeds at the Notary´s office. Your lawyer will provide the Notary Public with all the relevant information and documents required to draft the Title Deed.

Further, on completion´s date it will be very important for you to be assisted by your lawyer during the reading of the public document by the Notary, so that you fully understand the contents of the „closing ceremony“ of the purchase procedure.

Finally, your lawyer will also be able to undertake on your behalf the „after-completion“ tasks. Payment of all relevant cost and taxes within the relevant legal term and subsequent Registration of your Title Deed at the local Land Registry in order to obtain full and public protection of your rights to ownership.

As a conclusion, our main duty is to be prudent and to avoid unnecessary risk when purchasing property in Spain. Correct professional advice provided by a duly registered Spainsh Lawyer will guarantee a safe outcome for your investment and your only problem will be to enjoy your new home! 

Hardarson Investments use lawyer for the whole process when buying a propertis to secure both buyer and seller.