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PROPERTY

Ten things to know about buying property in northern Spain

With it's mountains and valleys dotted with rural communities within easy reach of a wild Atlantic coast, Northern Spain couldn't be more different from the over-developed Mediterranean resorts.

Ten things to know about buying property in northern Spain
Asturias is one of Spain's greenest and most picturesque regions. Photo: Carlos Urteaga Pintado/Pixabay

For those looking for somewhere in the cooler north of Spain, where rural communities are nestled in fertile land boasting views across impressive mountainous terrain, there are great bargains to be found, especially if you are looking for a restoration project.

Mountains, forests, an unspoilt coastline boasting pretty fishing villages and isolated sandy coves as well as  small cities with bustling historic streets and traditional farmers markets, and good restaurants galore, the north of Spain provides something very different from the south and Mediterranean coasts.

If you want a quieter life and don’t mind a bit of rain, it could be just what you are looking for. 

The Local spoke to Marc Furnival, a architect who started a property company in Asturias, for his tips on buying in northern Spain. 

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The market is relatively slow and very much in favour of the buyer, so there is no hurry. Consider your key criteria including how and for what the house will be used for in the short, medium, and long term; it may change over time.

Property

There can sometimes be quite a lot of scope for negotiation in the asking price. There is a lot of property on the market, but it is important to sift it carefully to find the good ones. What is important about it are the aspects that you cannot change: location, aspect, setting, surroundings, orientation, and access. If you like the house generally, but perhaps the interior is not exactly as you would want, that can be changed; don’t be put off by an ugly coloured interior. In terms of budget, whatever level it is at, consider putting three quarters of it into the purchase, to leave the rest to have some minor works done in order to have the house and garden completely to your liking. Also, the perfect house does not exist; in the end you have to make a decision and commit.

READ ALSO: Spanish property of the week: An entire village nestled in the Picos de Europa

Deeds

Just because what is listed on the deeds does not exactly match what is being sold is not necessarily cause for concern. It is quite common that they do not match. Passing years and various generations, land additions or sales, can all leave deeds with some discrepancies. This can easily be rectified the Land Registry and then with the notary as part of the purchase process.

Although sometimes it can take a few weeks or even months. Also, inheritance properties sometimes have not had the will fully executed, so the property is not actually in the name of the person selling it to you, but their deceased relative.

This is okay and the notary ensures beforehand that everything is in order. Ensure that the element of the fees that relate to executing the will are paid by the sellers, and do not get bound up in the actual purchase fees. Confirm that all the owners are agreeing to sell. Properties can often have a number of owners because it has been inherited, and Spanish law divides property between all immediate descendants.

Legal representation

Rather than having a representation for both seller and buyer as in some countries, the purchase process is organised by the property agency, but done through a notary, who is impartial and in place to ensure that the legal purchase process is carried out correctly. The property agency can look into any other issues.

Paperwork

This initial exchange contract (contrato de arras) can be done by email and does not require the purchaser to be there. On the day of completion, the final signing of the deeds (escrituras) the purchaser does need to be present. The same day, a draft copy of the deeds will be issued (copia simple), but the actual new deeds can take a few weeks.

Taxes

There is a purchase tax on buying, usually 8-10 percent of the final price, depending on the amount. Then there is the annual tax for property owners (IBI – Impuesto sobre Bienes Inmuebles) paid monthly, which is usually in the order of a few hundred per year.

Fees

Purchasing a property incurs land registry and notary costs which can be around €1000-2000 in total. Land Registry usually takes a certain amount and then returns some after they have calculated exactly what the charge is. Property agency fees are normally paid by the seller, and are usually minimum 3 percent.

Banking

Not all banks are fully up to speed on international transfers. This is partly because many of the ‘caja’s’ – local banks, were forcibly bought up by nationals as remedial measures after the recession of 2008 to spread so called toxic debt around. This means that transfers go through a holding account, which is not a problem as such, but can cause delays. Amounts transferred can also be important. Recent changes to money laundering laws mean that where money comes from has to be accounted for and larger amounts can be subject to an auditing process. Amounts of less than €100,000 usually have less delay. So it is usually better to have a Spanish account in a larger bank, such as Santander or BBVA, and have that account in regular use. Transfer money well beforehand, in stages if necessary, so that the bankers cheque to complete the sale at point of signing can be issued easily by the bank the day before completion on the property.

Ownership

There is no problem buying and owning a property in Spain. All you need is an identification number (NIE – numero de identidad extranjero) which can be issued at the main police station in each province (Asturias – Gijon; there are less people than the principal office in the regional capital, Oviedo, and it can be done the same day).

Trip

Although you are visiting to view properties, part of your time should also be spent enjoying your time here; taking advantage of what the area has to offer, be it grilled fish restaurants, mountain walks, being on the beach or horse riding through the forest. That’s why you are thinking of buying a house.

Marc Furnival runs Iberia North. a bespoke property agency presenting interesting homes from across the region. Based in Asturias, it introduces local properties to an international market. It also worked with estate agents in the area to find particular properties either directly or as a commission.

READ HIS STORY HERE: Why I swapped London life for a tiny village in northern Spain

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PROPERTY

How to turn a bar, office or shop into a residential property in Spain

Commercial properties in Spain can be a lot cheaper than residential ones, but it’s not as straightforward as buying a former restaurant, office or shop and moving in. Here are the steps to follow and what you need to be aware of.

How to turn a bar, office or shop into a residential property in Spain

One of the tricks budget property hunters in Spain have been using in recent years is buying a local (commercial property), oficina (office) or nave (industrial unit) and transforming it into a vivienda (residential property) to live in or let out. 

It’s a trend that’s roughly doubled in big cities such as Madrid and Barcelona in the last five years. 

Buying a commercial property can work out to be 50 percent cheaper than a flat or house in Spain and there can be other advantages such as it being more open plan than Spain’s typical corridor-themed apartments as well having more money to invest in the renovation. 

Is it possible to turn a commercial property into a residential property in Spain?

Yes, in theory it is, but it’s not always possible. The rules relating to a change of property’s usage from commercial to residential or vice versa are determined by each municipality in Spain, so before you rush to buy un local, you have to do your homework first and be aware of some of the most common pitfalls.

It could be that the limit of residential properties per hectare has been surpassed already, or that without some major changes the property doesn’t meet the standards of size, rooms, space, height, layout, ventilation, air extraction or light of the town or city hall. 

It isn’t the most straightforward process and depending on the property and the individual municipal rules in place, it might just not be possible to live in the property or rent it out to others.

Living in a commercial property is illegal and may cause you problems such as not being able to activate water and electricity or register your padrón at the town hall.

Despite all the paperwork needed, flipping a bar or office and turning it into a home usually works out cheaper than buying a residential property in Spain. (Photo by ANDER GILLENEA / AFP)

Don’t be discouraged however, as in many cases it is possible to change the use of a property from commercial to residential and in regions such as Galicia authorities are currently facilitating the process to address the matter of empty abandoned stores and the lack of well-priced accommodation for young homeowners.

What are the steps to follow in Spain to change a property from commercial to residential?

Check the statutes of the community of owners: In order to make any changes within the community of neighbours, permission must be requested in advance. Beforehand, you can ask the comunidad president for a copy of the community statutes to see if the change of use from commercial to residential is mentioned.

READ ALSO: ‘La comunidad’ -What property owners in Spain need to know about homeowners’ associations

Request permission from the town hall: After getting the green light from la comunidad, you have to go to the ayuntamiento (town hall) of the town where the property is to find out if it’s possible to add another residential property to the finca (building). 

Even if this is confirmed, it doesn’t certify that the change of usage from commercial to residential is allowed, for which the town hall will ask you to provide an architect’s proyecto técnico or feasibility report based on municipal urban laws. You will only be allowed to swap from commercial to residential if the project meets the safety and habitability requirements of the Technical Building Code (Código Técnico de la Edificación).

Get the Building Licence: Known as licencia urbanística or permiso de construcción in Spanish, this is an official document required by the town hall for you to carry out a construction or renovation project. In other words, you’ll need this municipal authorisation to begin work on your future residential property, whether it’s major work or minor . 

Get the Certificate of Habitability: Once the renovation work is complete, you’ll need the cédula de habitabilidad to be able to move in or let the property out . The conditions for this are regulated by each regional government and again it’s an architect who must prepare a technical report in order for a town council technician to issue the certificate of habitability.

The certificate we need for the change of use is that of primera ocupación (first residential occupation), which has to include the usable surface area of ​​the home, rooms, address, location, maximum inhabitants etc.

How much does it cost to transform a commercial property into a residential one in Spain?

If for example it’s a 80m2 property with two rooms, the total would be about €50,000, according to property websites Idealista and Habitissimo, with the bulk covering renovation costs (€500/m2= €40,000) and the rest going to cover permits, architecture costs and taxes.

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