Buying a property is like buying anything else in life: Calmness and foresight protect you from unnecessary, later expenses and unpleasant consequences. That's why you should have the property and contract checked by an independent third party you trust before making a purchase. Lawyer Sonja Willner provides an overview and relevant tips.
You don't buy a property in passing. The buying process takes some time. Those who act quickly will always have the benefit of hindsight. However, potential buyers are often slowed down by the documents required. To purchase a property, you need a so-called NIE number, which is applied for at the foreigners' register. This can take a few weeks. It is also important to register with the Spanish tax office using the NIE number and to set up a Spanish bank account. Please also note that even the cheapest property always comes with additional costs. These are hidden fees and taxes that are incurred when buying a property. There are also possible loan fees and certain conditions. Although interest rates are currently low, some banks in Spain link the granting of a mortgage to the conclusion of a life insurance policy. Our lawyer clarifies the situation.What data, information and documents should be checked in detail and presented by the seller before the purchase?
A distinction must be made here as to whether you are buying an existing property or a new build property.
In the case of existing properties, you should ask for all documents relating to the property, such as the building permits and building inspections from the municipality, entries in the land register, property tax assessment notice, certificate of habitability; in the case of apartments, the latest minutes of the owners' meetings; in the case of fincas in the countryside, a certificate from the municipality stating that there are no building code violations.
Which parties are involved in the purchase process and what are your responsibilities?
The estate agent brings the parties together and assists with the negotiations. An architect checks the building regulations situation with the local authority, a building surveyor checks the substance of the property, in particular possible moisture problems. The lawyer checks the documents relating to the property, secures the client's private contract accordingly, prepares the notarial deed and accompanies the client to the appointment. Unlike in Germany, the notary in Spain has a purely notarization function: he notarizes the will of the parties. A tax advisor should examine the tax implications of the purchase and provide advice, particularly with regard to property tax and the like. The tax declaration after notarization and the entry in the land register can then be carried out by the tax advisor or an authority service provider (Gestoria).
What costs are incurred by the property buyer?
In the Balearic Islands, the buyer pays the notary. He must also pay the costs of registration in the land register. In addition, there are taxes, for existing properties the land transfer tax (staggered according to purchase price 8-13%) or for new properties 10% reduced VAT and 1.5% stamp duty.
In addition, the buyer must include the costs of any service providers they engage (lawyer, surveyor, tax advisor, etc.) in their planning.
Real estate as an investment – what legal hurdles must be observed as a private individual and entrepreneur? It is comparatively easy for Europeans to purchase a property in Spain. Every buyer, whether a natural or legal person, needs a tax number in Spain. A valid identity card is sufficient for a private individual, for a company it is a little more complicated, here a certified, apostilled extract from the commercial register must be organized and sworn in, the managing director also needs a tax number.Prospective buyers from non-EU countries and non-Schengen countries require a military permit in the Balearic Islands if they wish to purchase a property outside the EU. This is often a time factor that should not be underestimated. A property in Mallorca in a good location is and remains a good investment. However, be careful, there is no speculation period as in Germany. The profit made on the sale is always taxable.What should buyers, but also sellers, pay particular attention to during the purchase process?Both buyers and sellers should seek legal and tax advice from experts. Private written agreements are binding, so you should seek advice before quickly signing anything and possibly even making payments without being able to assess the legal and tax implications.
From professional experience: What is the most common mistake made when making a purchase?
Acting hastily, saving money in the wrong place, namely in the absence of expert advice. Only lawyers are allowed to give legal advice, they are trained to do so and, should an error occur, they also have insurance. Statements from intermediaries, uncles and neighbors are entertaining, but are neither legally binding nor are any of these people liable if something goes wrong.
The legal process for any disputes is extremely long. What tip would you give buyers to be on the safe side? Court proceedings are not only lengthy and have an uncertain outcome, but are also much more expensive than expert advice before the purchase. I therefore always recommend having documents checked, only having contracts drawn up by lawyers and keeping a cool head during negotiations.Sonja Willner
German lawyer | Spanish abogada
Plaza Porta Pintada 3, Entlo B
07002 Palma de Mallorca
Tel. +34 871 180 197
Tel. +49 (0) 30 629 37 600
