The information set out below is intended to acquaint the would be purchasor with an insight of the purchasing process. Purchasors will be using a lawyer and there is no need therefore to set out comprehensive and detailed information, but rather to make the purchasor aware of the stages involved.
a. The first stage of course is to find a property and agree a price with the vendor.
b. Normally a reservation deposit of about €3,000 is paid so that the property will be removed from sale. The reservation deposit is refundable if legal or structural issues frustrate the sale. If there are no such impediments and the purchasor does not proceed the reservation deposit is not refundable.
c. The purchasor will need to obtain a – ( National Identification number) which will be needed for the sale to proceed (see below).
d. After the reservation deposit has been made matters will proceed to a contract stage. In Spain the contract is known as a “Contrato de Compraventa de Vienda” – Private Property Sales Contract. When it is signed a 10% deposit becomes payable from which would be deducted the amount paid as a reservation deposit. The completion date is set out in the contract having been previously agreed by the vendor and purchasor.
e. Completion takes place at the offices of a Notary when the balance of the purchase price is paid.
f. If the vendor does not complete after contracts have been exchanged the 10% deposit will be refunded to the purchasor. The vendor would also have to pay an additional 10% of the purchase price to the purchasor by way of penalty. This rule was introduced to reduce the likelihood of gazumping.
g. If the purchasor fails to complete after contracts have been exchanged the vendor will retain the 10% deposit.
h. Prior to signing the contract searches would have been made similar to those followed in the UK. Legal title would have been deduced from the “Escritura” (Title Deeds) and the seller would have produced a valid ” Cédula de Habitabilidad” ( Habitation Certificate) that is issued by the local town hall once a property has been built. The certificate often referred to as the “Cedula” is confirmation that the property has been built correctly and in accordance with the planning permission the builder was granted by the town hall.
i. Once the Cédula de Habitabilidad has been issued it is valid for 5 years. After this date has expired it is necessary for the current owner of the property to renew the certificate in their own name.
j. In June 2013 it became a legal requirement that all properties for sale or rent in Spain must have an Energy Performance Certificate (Certificado de Eficiencia Energética, CEE). It is the responsibility of the vendor to provide this.
k. During the legal process details of fees and taxes that are payable to government agencies and the local authority will be ascertained by the Lawyer together with the amount payable for legal costs. In the case of “repossessed” properties there could also be amounts payable to utility companies in order to have services reconnected. These are referred on the page headed “Property Costs” more
l. After completion details of the transaction will be first registered with the tax authorities and then with the ” Registracion de la Propiedad” (Land Registry) .
Purchase Processing Time
Like in the UK this can be quite quick or can drag out. Much will depend upon the co-operation of the respective lawyers, whether there will be a mortgage required and whether there are issues or impediments to be resolved. As a general rule a period of three months should be allowed although transactions can take a lot less.
Obtaining the NIE number:
These are issued by the National Police and can be obtained by attending a local National Police Station and requesting an “EX18 NIE” form and “RESIDENCIA” application form. For non -Spanish speaking applicants it is advisable to be accompanied by someone who does. Alternatively you can collect an application form to take away for completion.
You will need to take with you your passport, together with a photo copy of it, and two passport size coloured photographs.
An application must provide a Spanish address. This is required for communication purposes. If you do not have a Spanish residence this can be another persons address but they will have to accept responsibility to notify you of any communications received.
Upon submitting your completed forms you will be issued with a Form 790 which you will need to take to your bank so that the police administration fee can be paid by them on your behalf. Your bank will issue a receipt confirming that the fee has been paid which you will need to give to the police when you collect your NIE and Residencia certificates.
This identification number is used to track the individual’s financial and official activities in Spain. Spanish citizens have a NIF number (Fiscal Identification Number / Número de Identificación Fiscal) which is their DNI (National Identity Document/ Documento Nacional de Identitidad) followed by a letter. The NIE number always starts with “X” and is followed by seven numbers and a letter. The number is personal to an individual; it is not transferable and it does not expire.
Notification needs to be made when there is a change of address.