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What’s the process for buying a property in Spain?

Here's The Local's quick guide to the buying process once you found a property you like in Spain.

What's the process for buying a property in Spain?
Image: kirkandmimi/Pixabay

You’ve scoured the adverts, walked the streets looking for “se vende” signs, been shown around dozens of properties that aren’t quite right and then…you find the one.

So what next?

The buying process

Most foreigners say that the hardest part of the buying process in Spain is all the bureaucracy that goes with it. There is always a lot of paper work involved as well as some processes you won’t be used to, therefore it’s important to get an agent or a consultant to help you. 

1) Step one: Make an offer. When you’ve found a property you want, the first natural step is to put in an offer. You do this by filling out an official form. Despite what you might be used to in your country, many vendors in cities such as Barcelona won’t be willing to negotiate too much below the sales price, however this is changing during the current Covid-19 crisis. Fernàndez says: “It’s important is to never look like total foreigner, even if it’s your first time in the city, as you want to pay the same price that a local would”. He suggests that a good agent might be able to help you negotiate a better deal.  Once your offer has been accepted, others can’t keep viewing the property and you’ll move onto the next step.

2) Step two: Contrato de Arras. After signing the reservation document, you’ll need to sign a second private contact between you and the vendor called the ‘Contrato de Arras’. This is when you show your true intention of buying the property buy putting down a deposit. This could be anything from 10-40 percent, depending on what you agree, but usually it’s around 10 percent.

It acts as an incentive and security blanket for both you and the vendor to continue with the process.  If you pull out after this time and don’t sign the deeds on the day you both agree upon, the seller will get to keep the deposit. However, if the vendor pulls out or there is a legal issue with the property on their end, they must pay you back double (20 percent for example).

3) Step three: Signing the Title Deeds. When all the legal matters have been sorted and the final contracts drawn up, both you and the vendor will meet to sign the title deeds on the day you agreed upon earlier. This meeting takes place before a public notary. It’s also the time where you’ll hand over the rest of the money for the property and get the keys to your new Barcelona apartment.

Signing the deedsImage: Cytonn Photography/Unsplash

Legal representation

Solicitors don’t really exist in Spain, it’s just notaries who are in charge of the legal process and overseeing the signing of the official deeds and payments, however they represent both parties – the buyer and the seller. Most Spanish people don’t use the services of a lawyer when buying a property, however we’d recommend that you do, especially if it’s your first time buying. Fernàndez says: “When buying a property, you are legally protected by the notary, but that’s just basic protection. Many properties (especially when the price is attractive) have legal problems. All of them can normally be solved, but with the help of a lawyer they can be done correctly. It will save you a lot of stress, time and future problems”.

Finances

The cost of the apartment or flat isn’t the only thing you’ll have to factor into your budget, there are several other costs involved with the buying process. This all adds up to around 12-14 percent of the total cost of the property, added on top.

  • IVA or VAT: Value added tax added to the property. This costs around 10 percent of the of the price you agreed to buy the property at. 10 percent is quite a big chunk, so when you’re budgeting, you need to make sure you have enough money for this, as well as the property itself.
  • Legal fees: If contracting the services of a lawyer, you’ll typically pay them 1-1.5 percent of the total cost of the property.
  • Notary: The notary should cost just under 1 percent of the property price.
  • Stamp duty: If getting a Spanish mortgage to buy your property, you’ll need to also add on another 1 percent of the property cost for the mortgage stamp duty.

Find hundreds of properties for sale across Spain on The Local’s Property page

FinancesImage: Kelly Sikkema/Unsplash

To survey or not to survey

Most locals in cities don’t bother getting a survey done on the property before they buy it – a very common practice in somewhere like the UK. Most buildings now should have a TIE certificate, which states that the building is structurally sound and safe, however, it is advisable to get a survey done as many of the properties are very old. You may have to get an architect to do this, as surveyors don’t really exist. This will set you back around €800, but you may be able to find architects who will do it for less, particularly if you’re fine for the report to be in Spanish or Catalan only.

Agents’ top tips

Hankö says:“You must be very careful to check everything regarding the property, not only the apartment, but the whole building. You can’t choose your neighbours, they come with the purchase, so it’s very important that they’re ok and that they will pay for their part of the upkeep of the building”.

Fernàndez says: “Don’t buy in a hurry. To find a good property, that is also a good deal, you need to dig and dig. Many times, good properties don’t arrive on the market, so having good contacts can help you find a real bargain”.

Palchevskiy says: “A key takeaway in the current market is to look at buying properties with the intention of renovating them, instead of looking at turnkey unit. The most added value is in properties with historical value and original features”.

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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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