Buying Spanish property bargains safely

Last updated on November 20th, 2019 at 09:26 pm.

It’s a very attractive time to find Spanish property bargains. Although the market is bouncing back, prices are still well below what they were pre-2008.

For instance, in the Barcelona area, prices remain nearly 20% lower than they were before the financial crisis. Although they’re on the up – prices were up 6.49% in 2018 – it remains a great time to buy in Spain. This climate is clear from the statistics; according to the latest figures, the largest group remains the British who bought 7,613 homes in 2018, up 8.8% on the previous year. However, they are hotly pursued by French nationals and German nationals, who bought 4,211 and 4,138 homes respectively.

Although it’s true that investors are falling over themselves to buy in Spain, it’s important to follow the correct procedure. In light of current market trends, it can be tempting to rush in to secure your new home – certainly, with the possibility of a dream home in the sun within reach, some make impulsive decisions they wouldn’t otherwise. Therefore, to avoid any nasty surprises later down the line, it’s important to keep a clear head and carry out the relevant legal checks. Generally, these fall into three categories. These include:

•  Legal status of the property
•  Utilities and taxes checks
•  Legality of any home improvements

In this article, we discuss these points in more depth.

Legal status of the property

It might sound outlandish, but it’s not unheard of for vendors in Spain to attempt to sell a property they’re not legally entitled to sell. This can cause serious problems later on, creating obstacles for the buyer and their inheritors. Therefore, if you’re exploring Spanish property bargains, it is essential to check Land Registry records. This documentation will detail the following:

• Who the official owners are
• If there are debts held against the property
• If the property conflicts with local planning laws
• The construction history of the property

You can also request a certificate from the Cadastral Registry that will provide further details. These include the total square meterage of the property, the home’s Catastral reference and the Cadastral plan. This information is essential to identifying the property’s tax band, which is indicated by the Cadastral reference. From here, the Cadastral band will show whether or not any extensions or improvements have been registered with the authorities. Once you obtain this information from the Land and Cadastral Registries, you can compare it against the title deed to ensure they are consistent. 

Further to this, you need to make sure the home has the relevant licenses and certificates. Depending on whether the property is a new build or resale, you’ll need to make sure the first occupation or second occupations licenses are in place. These are also known as habitation certificates depending on the region. Finally, you need to ensure the property has an Energy Performance Certificate, or else face a hefty fine in the future. 

Our last point perhaps goes without saying – you should also always seek independent legal advice to check the contract. With the help of a knowledgeable local solicitor, you can make sure your interests are taken care of.

Utilities and taxes checks

A further important check is whether or not there are any utility bills or taxes outstanding against the property. This is especially the case if the property is a bank repossession, which is a common background of many Spanish property bargains. Often, if the previous owners defaulted on their mortgage, it’s likely they may have missed other bills. If there are outstanding payments, you must settle these debts before utilities can be reconnected or transferred into your name. Equally, you must pay any outstanding taxes before you can take ownership of the property. Possible outstanding payments could include:

•  Electricity
•  Water
•  Community fees
•  Refuse collection
•  Council tax

Legality of any home improvements  

Similarly to the UK, homeowners have to seek planning permission before making home improvements. However, in Spain, the rules are stricter; even relatively minor works require agreement from the town hall. As a result, people sometimes forget that they need permission for renovations and home improvements. If alterations aren’t recorded on the title deed, this can cause problems at the point of sale. Furthermore, if these go undetected, they can present issues in the future – so it is essential to address any anomalies before closing the sale. Your solicitor should check the following:

• The number of rooms
• The number of floors
• If there is a basement and if it is used as living accommodation
• Records of any additional buildings
• If there is a new swimming pool or patio area
• Any other visible home improvements
• If terraces, porches or balconies have been closed in
• If the outside appearance is the same as other apartments in the same building 

Spanish property bargains: Make sure you buy safely

Remember, it’s essential to perform due diligence when buying property; omitting any of these checks could cause serious problems in the future. Although this might seem like an extensive list of checks and cross-references, don’t let it take the wind out of your sails. As long as you follow the correct procedure, many Spanish property bargains are fantastic investments. The best way to make sure your purchase goes as smoothly as possible is to enlist the help of a solicitor. Please call us, without obligation, if you would like our team to check that everything is in order before you buy your dream home in Spain.