Buying or selling real estate in Spain

Spain is probably no different from other foreign countries where there are unique laws and things are done in ways that are unlike the ways they are done at home.  This certainly applies to real estate transactions.

There are two deeds for a property in Spain. They are called Escrituras and one is for the building and one is for the plot of land on which it stands. It is important that your escrituras are properly registered and that you have an official receipt to prove this. There have been cases where people have their escrituras but they were never registered and someone else can claim, sell or mortgage your property without your knowledge.

You must also ensure that the tax office has your name and not that of the former owner in their records. This didn’t happen in our case and it took years and substantial fees to have a lawyer make the corrections.

There are also different property taxes you must pay. We discovered that we hadn’t been paying one of these when they wanted to sell our property for back taxes. When I pointed out that they had never sent us a bill, their response was that it was not their responsibility to do this. Only in Spain!

Selling a property is another matter entirely and it is far more complex and confusing than it would be at home. To begin with real estate agents are often unlicensed and unregulated. There is no government oversight or control. Hence there is no regulation and no standards for commissions, fees or services or closing costs. There are taxes to be withheld, and more forms, letters and documents to be acquired than you can imagine. All properties need an official energy certificate in order to be sold. Some real estate agents take care of these matters for you. Some do not.

Most agents are honest and reliable. Others are neither. We heard about one agent who would list your property at a high price but would seldom show it or would show it to people who were completely uninterested in the property. Eventually the agent would claim that the property was too difficult to sell and would suggest a very, very low price. Then a friend or relative of the agent would buy the property.

There is no Multiple Listing Service in Spain and it is not unusual for a property to be listed with several agencies at difference prices. It seems that there is widespread confusion about the correct size of lots. We had several official documents concerning the size of our plot and all of them were different. Apparently this is not uncommon

Two other issues for buyers or sellers involve inheritance taxes and renting your property. Under Spanish law you must leave your property to your children but the inheritance taxes vary depending on where your property is located. It is cheaper to die in Madrid than in Andalucía. There is no inheritance tax in Madrid but the tax in Andalucía is 62%.

The Spanish government is trying to control holiday rentals. If you rent your property you must obtain a rental license. This can be costly and may involve certain changes to your property. In addition you will have to collect passports, charge a tax on the rental fee and submit and report this to the government. Failure to do any of these things can result in significant fines. On the other hand many Spanish owners who disagree with these regulations simply refuse to comply. This is the Spanish way. In addition in some areas such as Barcelona, the government will no longer issue more licenses.

Anyone buying, selling or renting in Spain should obtain sound legal advice before doing anything.

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