INVESTING IN REAL ESTATE IN SPAIN
Spain has become been very popular for international investors for several reasons: good climate and food, easy going way of living, popular holiday destination in Europe and attractive prices. But which are the steps in the process of purchasing a property in Spain?
1.- Get a NIE number
The NIE number is an identification card for resident as well as non-resident foreigners owning any assets in Spain. So you will need this document, for example, when buying real estate, opening a bank account, setting up a company or working in Spain. The NIE, however, is neither a resident permit nor a work permit. Non-EU citizens, if they intend to work or live in Spain, will need one of these other permits.
2.- Open a bank account in Spain
Once you have received your NIE number, you will be able to open a bank account with bank operating in Spain. You will need this bank account to be able to take out a mortgage in Spain or to pay the purchase price to the seller at the notary. You will also use the bank account to pay the ordinary supplies and fixed costs of the purchased property as well as the annual taxes.
3.- The legal investigation
As lawyers, it is our duty to ensure that a complete legal investigation is completed before the executing any document. We check all available documentation of the property, (such as encumbrances, mortgages, occupancy certificates, inexistence of debts, administrative claims, etc.) and we make sure that all legal procedures are properly carried out and prepare all forms and contracts to acquire the property.
4.- “Contrato de Arras”
Regularly, though not necessarily, the parties sign a “Contrato de Arras” when selling real estate. This is a private contract in which the parties undertake to carry out the future sale of a property. Under this contract, the buyer pays down payment of usually 10% of the sale price of the property.
The “Contrato de Arras” itself determines a penalty for the party who does not fulfill the obligations of the private contract. Briefly, if the buyers ultimately decides not to buy, they will lose the deposit and if the sellers forgoes, they will refund the buyer their original deposit plus an equivalent amount to compensate for the loss of the property.
5.- Notarial deed of sale
The notary is an independent officer who is authorized to draw up authentic documents. In such manner, the validity of certain documents is verified and it can be stated with certainty that the signatures under the documents correspond to reality. The transfer shall not be completed till the execution of the parties of a Notarial Transfer Deed. Moreover, when buying real estate, the notary further guarantees that the agreement is legal, immovable and secure.
Additionally, it is important to note that only notarial deeds have access to the Land Registry, giving “erga omnes” effects and publicity and preventing the seller to make a “second sale” to the same property.
6.- Payment of Taxes and Registration
The final step for the full completion of the sale of the property is the payment of the associated taxes and the registration in the Land Registry as well as in the Cadaster the change of ownership.
The purchase process is complex, so we recommend you to always have legal guidance from a lawyer with experience in real estate law in Spain.
