An attractive property investment in Spain – often as a result of location and architectural style – is to purchase an old building. As a result of all the problems that the buyer could face the property may well have a very low price to catch the attention of foreign investors, the price can be even better if the building has a joint ownership as a result of an inheritance. I am not saying this will not be a bargain, but as it will be your own responsibility to be informed and to do your numbers to see if the investment is right for you, it is strongly advised to obtain the advice of relevant professionals to ensure your eyes are open when you take on such a challenge.
It is still very frequent that one becomes aware of the property through a Real Estate Agency. In some areas of Spain they will charge you around 3% of the purchase price and will only provide you with generalised information, since their job is to sell property, not to look after your interests.
Many properties from the beginning of the 20th century do not follow the current legal system. For example, some of them do not even comply with the urban development plan and once you purchase the property you could receive claims from the local authority to make you demolish part of the building to adjust to that plan.
Other properties haven’t passed the technical building inspection (ITE) and there could be fines for that. Be aware that as well as looking for an architect to solve this problem, (which will most likely be the highest expense to get all the necessary work done) you could face any fines that were not paid by the vendors.
It may also be the case that the building has not been divided into any separate plots for the purposes of the horizontal property laws – or often it has only been done half way through, such that there´s been a division at the Land Registry but not in the Catastro (another public entity involved). So this may be a further process that may need to be carried-out after the purchase of a building or you will not be able to sell any individual apartments independently. Most of them don’t have a community of owners constituted, which you will need in the future, especially if you are not living in Spain.
Once you sign the pre-agreement contract with the sellers you must have things clear or otherwise you will lose the money that you have left to reserve the property which, if doing so through an estate agency will be quite a significant amount. Be careful to negotiate a date by which completion should take place that you will be able to stick to.
In order to make any purchase you will need to have an NIE in Spain which will be your tax identifier number and also consider whether to buy as an individual person or through a company. We suggest that with the current law, depending on the circumstances, it could be more beneficial to buy as an individual especially if you are planning to rent out the properties as you could have interesting tax deductions paying a personal income tax rate of 19.5% of your net incomes. Be quick to obtain a mortgage, check in all Spanish banks to see who gives you the best one, bear in mind you will have to pay for the property valuation as well as for the costs of the mortgage itself. You will also have the cost of transferring your own money to Spain and we strongly advise you to use a reliable currency exchange company that could help you to save money.
When signing your sales deeds you will have to check the valuation that the regional authority has applied tor the building. This might be higher than the actual price that you are paying and could lead you to future claims from the taxman . All this could be sorted out if you introduce an additional clause at the notary specifying that the price you bought was lower due to the poor state that your building had and keeping all the architects invoices as well as all the rest of the expenses that you have had to face to be able to defend yourself from this type of fiscal claim.
Once the purchase has been completed and the deeds have been signed at the Notary, you will have to pay the notary fee and pay the transfer tax or ITP (Impuesto de Transmisiones Patrimoniales) which will depend on the region you are buying in – here in Madrid it is 6%. Your deed has to be registered at the Land Registry which has its own inscription fee too.
Owning the property involves paying a local property ownership tax called IBI which you should know in advance if it has been annually paid or otherwise you will have to assume the debt. The shared expenses of the building will also have to be paid by you and especially if you are planning to rent out the apartments we suggest you have an insurance company covering any problems that your apartments could have in the future.
When contemplating a property purchase in Spain it is always a good idea to arrange for independent legal advice, however with old buildings it is absolutely mandatory given the number of potential pitfalls. However, when all is completed satisfactorily, these buildings can provide the greatest enjoyment for foreign investors in Spain.
Below is a list of recent reviews received from our clients, obtained via the Wufoo client survey platform:
- David W Baker, MalagaTuesday, November 06, 2018We were extremely satisfied with Alvaro: He explained the law to us and gave us a solution to our problem. He could not have been more helpful and we will definitely use him again.
- Thom Koller, LondonMonday, November 05, 2018Francisca provided a perfect service!
She is professional, dedicated and took care to understand the needs of my situation. Her service offers exceptional value for money and gives complete peace o...f mind.
- Michael O'Sullivan, IbizaThursday, November 01, 2018Understanding Spanish law regarding buying and selling properties is a minefield for English speakers. Cristina provided the legal expertise, the translation of legal documents, explanations for all i...ssues, and solutions for our challenges.
Also, she provides confidence and reassurance that what we are doing is in our best interests and within the law - very important when working in a foreign country.
In summary, she is an excellent professional that we are so pleased we found and will continue to use for all our legal matters.
I think you have a perfect solution for supporting people abroad. I was lucky to find you on the internet. Perhaps you could promote your services to all estate agents abroad, so more people can get access to your service when buying or selling abroad.
- Colin Wilson, AustraliaTuesday, October 30, 2018Overall it was great. Rosa always answered all questions asked and provided clear, concise and well explained answers.
When there was a delay in responding she did offer an apology which was appre...ciated. Rosa always instilled a sense of confidence that she knew exactly what was going on, what I was asking, and what the applicable law was.
When not a Spanish local and dealing with her remotely, this provided great comfort in a sensitive matter.
- Campbell Reynolds, SpainMonday, October 22, 2018We were very satisfied with the service provided by our lawyer Sabela.
She was very accomodating, quick response to everything while thinking outside the box for solutions. Also, her English was mo...re or less fluent.
- David Edwards, EnglandWednesday, October 17, 2018Very Satisfied with the service provided by Oliver. He was quick, efficient and value for money. Would definitely recommend to friends.
- Andrew Morecroft, LubrinMonday, October 15, 2018Juan was extremely helpful during every part of the purchase. As I was buying an older property there were slight complications but Juan explained every issue and managed to work through the difficult...ies with supreme efficiency.
Also there was a ridiculous situation with my Spanish bank account where I could not access the money even though it was in the account. Thankfully I had given Juan power of attorney and he managed to sort-out the problem.
He went above and beyond the call of duty and I am very grateful for all his help. I would strongly recommend him to anyone looking to buy in the Almeria region.
- Manoochehr Jafari-Nahad, UAESaturday, October 13, 2018Jose-Antonio was extremely helpful and prompt and also it was helpful that he could be contacted via social media like Whatsapp
- Michele Jansen van Vuuren, BenajarafeSaturday, October 13, 2018Alvaro was extremely helpful, he couldn't have done more. Very quick to respond to my query.
Only issue was that some of the documents I needed to provide were not mentioned. However, would defini...tely recommend his services to friends.
- John Fraser Dunfield, San FranciscoFriday, October 12, 2018Good understanding. Applied sufficient pressure as needed to get the issue resolved. Reasonable charge for service provided. Would definitely recommend this service to friends.
- Rosemarie Byrne and John Cooper, Dublin IrelandcoupleTuesday, October 09, 2018We found Francisca extremely helpful with a great amount of knowledge about buying a house and re-locating to Spain.
- Jane Evanson, London, UKfemaleTuesday, October 09, 2018Francisco was very helpful and professional. I was very happy with the advice and service.
- David McChesney, Puerto BanusWednesday, October 03, 2018Alvaro was very professional, Knowledgeable of the subject at hand, did not over-charge - in fact cut costs in the best way for me. Very efficient in the entire process. Thank you.
- Martha Kimes, Scottsdale, Arizona USAfemaleTuesday, October 02, 2018Francisco was incredibly responsive (and quickly).
Unlike American attorneys (and I know, because I am one), he didn't even bill me for a few follow-up emails/calls that he made on my behalf which... he easily could have done.
I was supremely happy with his legal services.
- David Roots, EnglandMonday, October 01, 2018We were very satisfied with the service we received. Rosa dealt with the matter in hand promptly and efficiently.
- David Knors, BarcelonaWednesday, September 26, 2018Oscar was very kind, professional and fair. He was able to help me with my problem and he was very determined that he would.
Oscar is very competent, polite and showed a lot of effort to solve my ...problem. I strongly recommend him.
- Tauri, EstoniafemaleTuesday, September 25, 2018Very satisfied with the service. Francisco is bilingual English-Spanish and was always quick to respond and was very professional at all times.
- Mohamed kheder, Dublin, IrelandMonday, September 24, 2018Every thing was great ... Rosa was really helpful and understanding. And I see the value for money was good enough.. of course I would recommend it to any of my friends.
And I would like to have th...e chance to thank Rosa and the whole company for everything.
- Daniel Elias, New YorkTuesday, September 18, 2018Excellent service, delivered exactly as promised, and at half the cost a different translator had requested for the same project!
- Darren & Gemma Nesbitt, ValenciaTuesday, September 11, 2018Inmaculada has been of excellent service to us, as a family and in helping to set up a business in Spain. She has now undertaking several project for us and has delivered high quality on all of them. ...Perfect service!
- Patsy Valentin, GranadaTuesday, September 11, 2018Extremely accommodating and highly professional and very pro active. Excellent result and service. Highly recommended.
- Jovie, MalagaWednesday, September 05, 2018My lawyer Alvaro was extremely helpful and very efficient. I would definitely recommend his services to friends.
- Albert Roldan, FranceTuesday, September 04, 2018Alfonso was extremely helpful, particularly since we requested a quick turnaround for the 18 documents needing to be translated from English and French to Spanish.
He was fluent in our phone conver...sations and email correspondence, he never misunderstood what our requirements were. He was was clear in explaining how this process works and what the price included.
I would highly recommend him to anyone needing these services.
- David Grundy, UKFriday, August 24, 2018Jose was very polite and we received an excellent service from him. Nothing was to much trouble and his communication was 2nd to none. Highly recommended!
- Mario Klappholz, Miami, FloridaThursday, August 16, 2018Inma was very helpful, always happy to assist. I particularly appreciated her professionalism. I would not hesitate to recommend her services to friends.
- Daniel Spitzhorn, SpainTuesday, August 14, 2018Miguel in Oviedo helped us during the process of buying a flat in Asturias. He was just brilliant!
- Tracey Iliffe Bradley, UKfemaleTuesday, August 14, 2018Rosa dealt with everything efficiently and promptly and went beyond our expectations by helping us to open a Spanish bank account and deal with other minutiae.
- Erslaan Ahmed, BangladeshFriday, August 10, 2018Gave very good advice and provided an excellent solution. Inma is very professional in her work. I would recommend her services to friends.
- John Ryan, Derby, EnglandWednesday, August 08, 2018A perfect relationship between client and professional. Nothing was too much trouble.
Went over and above his job and more. I would only use his services if I need legal services. I were very lucky... to find Jose first time round.
Thank you jose
- Robert Brownlee, Almeria, SpainWednesday, August 08, 2018Everything was as it should be: excellent. Had to pay by bank transfer and maybe would have liked another means of paying.