The purchase and sale of real estate properties in Spain entails various procedures, which depending on circumstances, may present greater or fewer difficulties.

In such cases where the objective of the purchase consists of a property under construction (or the construction of which has not even started), the process of purchase and sale is more complex, as the property does not yet exist. Such cases are known as “purchase and sale off-plan”.

When the purchaser of an unfinished  property decides to initiate the process of an “off-plan” purchase and sale, the following must be taken into account:

1) That the property must be under construction with the required municipal licence;

2) That the developer makes available to the purchaser all documentation which accredits, among other issues, the existence of the construction project and the structure and materials to be used in building the future property;

3) That the construction of the property may undergo delays which may affect the deadlines for the completion and handing over thereof, and that certain penalties must be provided for as a remedy;

4) That the purchaser will be obliged to make advance payments of certain amounts  on account of the final price in respect of a property that does not yet exist as such;

5) That the developer must guarantee the advance payments made by the purchaser in accordance with the provisions of Law 38/1999, of 5th November, on Building Standards;

6) That the declaration of new construction of the property, once completed, and if applicable, the division into horizontal property of the building of which the property forms part, must be formalised by the developer before a notary public;

7) That the taxation on the operation is different to that of already existing properties, which are not of new construction.

Furthermore, additional procedures must be taken into account if the purchaser is not a resident in Spain, such as the obtention of a Foreigner Identification Number (número de identificación de extranjero – NIE), the opening of a bank account, possible bank financing, the accreditation of the marital property system in the purchaser’s country of origin, etc.

Obtaining a NIE, or where appropriate, a Tax Identification Number (Número de Identificación Fiscal – NIF) is an essential requirement for the purchase of a property in Spain by a non-resident. In addition it is possible that a residence permit must be applied for (and on occasions, a visa must be obtained beforehand), in those cases where the purchaser resides in a country which is not a member of the European Union and intends to relocate to Spain through a real-estate investment (pursuant to Act 14/2013 to support entrepreneurs and internationalisation).

If the purchaser requires bank finance to cover a part of the purchase price, matters such as the bank requirements for financing (minimum income, origin of the funds to cover the purchase price, etc.), the applicable interest rate, bank documentation for signing and the deadlines to be complied with for correctly contracting and granting the mortgage loan, must all be taken into account.

Thus, there are various issues to be borne in mind at the time of purchasing a property in Spain, and even more so when the purchaser is not a resident in Spain and when the property being purchased is yet to be built, is under construction or is recently constructed. Our firm offers legal advice for the purchase and sale of real-estate property in Spain, in order to advise clients in all matters that may arise, from the monitoring and completion of the purchase and sale process to the negotiation of the content of the contracts to be signed and the determination of the characteristics and potential modifications of the object of the purchase and sale.

 

 

Albert Zúñiga

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

14th April 2023