In the course of a real estate transaction, the purchaser of a property is confronted with many different questions:
- Is the property legally sound?
- Does the development comply with the building permit issued at the time?
- Have all taxes been paid?
- Is the quality of the house right or are there any defects?
This presentation serves as initial information for the interested real estate advertiser on the Balearic Islands.
The buyer should apply for a Spanish tax number before buying a property.
For foreign natural persons it is called NIE number (abbreviation for “Numero de Identificación de Extranjeros”).
Every foreigner who is doing business in Spain needs this NIE number. For some time now, lawyers have been able to order the tax number for their clients quickly and easily through the Bar Association.
Furthermore, it makes sense to open a Spanish bank account in good time by personally visiting a bank branch on the Balearic Islands.
Caution is advised with the fees of Spanish banks for accepting a bank transfer from abroad. Here, one should inform oneself in time, especially about the costs for the transfer of the purchase price.
When the right property has been found, a specialist should carry out a so-called “Due Diligence”, the legal and fiscal examination of the property.
In individual cases, a technical architect or engineer can also check whether the house is structurally sound and all installations are free of defects.
The buyer should request the following documents from the seller, although this is not an exhaustive list
- the notarized contract of sale (“escritura de compraventa”)
- extract from the land register (“nota simple Registro”)
- Extract from the land register (“Extracto del catastro”)
- Property tax assessment and waste collection (“Recibo de IBI y basuras”)
- Energy performance certificate (“certificado de eficiencia energética”)
- valid certificate of habitability (“Cedula de habitabilidad vigente”)
- Certificate that no proceedings for breach of building regulations have been initiated (“Certificado de no-infracción urbanistica”)
- last utility bill (‘ultimas facturas de luz, agua y gas’)
- Calculation of the municipal capital gains tax (‘calculo plusvalia municipal’)
- New building declaration (“escritura de obra nueva”)
- Building permits ( licencia de obra nueva).
The checklist needs to be extended depending on the individual case, for example if the property is located in the first sea line and a certificate from the coastal authority is required.
In Spain, private written contracts for real estate are legally effective differently than, for example, in the German legal system.
In practice, it is usually usual and advisable that the parties first conclude a private-written contract, because in the context of the private-written agreements, the course is set, not only at the notarization.
If the parties are already sitting at the notary’s office, there is little room for negotiation. In the private contract, the seller commits himself for a certain period of time and receives a down payment from the buyer, which is credited against the purchase price.
In the agreement, the seller’s side assures among other things that the property is free of defects, has all legal permits and is up to date with all taxes and duties.
The seller must provide all the necessary proof of this. If the seller sells to a third party within the specified period, he or she must repay double the deposit to the buyer.
If, on the other hand, the buyer does not pay the remaining purchase price after the deadline, the deposit is forfeited and the seller can keep it.
The down payment, usually 10% of the purchase price, is in practice paid directly to the seller, but this entails considerable risks for the buyer.
It is therefore advisable to deposit the deposit in trust with a notary or lawyer. The trustee is instructed by the parties in accordance with the private written agreement to pay the deposit only if all conditions mentioned in the contract have been fulfilled.
The subsequent notarised purchase agreement is a mandatory requirement for the purchaser of the property to be registered in the land register. With the notarial recording, the notary records the transfer of ownership and possession without encumbrances:
The buyer receives the keys to the house step by step against payment of the purchase price.
The purchase price is usually paid with a bank certified cheque from a Spanish bank.
A transfer of the remaining purchase price as means of payment is still the exception in Spain.
The buyer should be aware that the subject of the notarised purchase contract is exclusively the description of the property and the house, exactly as it is registered in the land register.
The real estate is usually bought “as seen”