Conveyancing and Real Estate and Investment Law
Purchase and sale of property
Let’s take a closer loot at the legal steps that must be taken when buying or selling a property in Spain.
If you’re looking to buy a property and want to avoid potential problems down the line, we strongly advise you to seek legal advice, as future problems can far outweigh the cost of getting a lawyer on-board from the outset.
Buying a home is usually the single biggest investment most people will ever make. Even those who own several properties will often invest in the property market. Note that estate agents always employ the services of lawyers before making an investment.
How can a lawyer help you before you buy your home?
Before buying a property, we need to do some basic research and analysis. It’s important to check the physical condition and registry status of the property, as it may be subject to liens and encumbrances, or restrictions on ownership. A specialist in conveyancing and property law will be able to find out all this information and act accordingly.
In doing so, they will contact the following bodies:
– Land Registry (Registro de la Propiedad)
To check for possible liens and encumbrances attaching to the property.
– Cadastre (Catastro)
The actual floor area of a property and the floor area recorded in the cadastre can often differ and so it’s important to make sure that the cadastre reflects the real situation, because this can have a significant impact on the appraisal value of the property. This task will be handled by the property lawyer assisting you with the purchase.
– Local council (Ayuntamiento)
The local council for the area in which the property is located can provide valuable information on the legal situation of the property, allowing us to view municipal taxes and consult the Urban Zoning Plan.
With all this in mind, the preventive assistance of a lawyer well-versed in urban planning matters will give you a more reliable picture of the real value and potential of the property you are about to acquire.
– Association of property owners (Comunidad de propietarios)
To obtain useful information on how much the communal fees are and to ensure that the property is current and up-to-date with its regular payments and with any extraordinary communal repair charges, depending on the condition of the building and any possible repair or improvement work to be carried out.
In all these cases, a lawyer is absolutely essential and relying on their services can save you a lot of money.
– Utility companies and other service providers
To investigate possible outstanding debts with utility and supply companies. The previous owner may also have cancelled the water, gas, electricity or some other supply, which will therefore need to be reconnected.
Calculating taxes and other expenses
Taxes can be significant in transactions as large as the purchase of a property. Property conveyances also come with other costs, such as the fees charged by notaries, public registries, management companies and appraisers, and if you need to take out a mortgage, then you will also have to add mortgage arrangement fees, registration costs and interest, among other expenses.
It’s therefore important to weigh up the additional cost of the purchase and sale above and beyond the price of the property, which can be as much as 10 to 15% of the property price, notably:
- fees of notaries, registries and management companies, tax on property conveyances and stamp duty (known as Impuesto de Transmisiones y Actos Jurídicos Documentados) and value added tax (known as Impuesto sobre el Valor Añadido).
- Mortgage costs:
- Notary fees
- Management company fees
- Appraisal fee
- Arrangement fee
Conclusion: prevention is better than cure
Relying on the services of a property lawyer is strongly recommended when buying or selling this type of asset and is the safest thing a future homeowner or investor can do. Not only will a lawyer help you understand all the documents you are signing and all the procedures you have to go through, they will also prevent potentially serious problems down the line.