Documents Needed to Buy or Sell a House in Spain
When it comes to buying or selling a second-hand property in Spain, it's important to consider the necessary documents to carry out the legal process. While the seller and buyer have different responsibilities in terms of providing documents, both parties should be cautious and aware of the details. The purchase or sale of a real estate property is subject to several legal and tax obligations that should not be overlooked.
The documents that the seller must provide include a Certificate of Energy Efficiency, which is required to advertise the sale of the property and will later be handed over to the buyer. It's also necessary to provide a Certificate of Debts with the Community of Owners, if applicable. This document must be signed by the administrator and the president, and the notary will request an original for the deed signature. It's important to note that if there are debts with the community, the buyer will be responsible for those corresponding to the current year and the three previous years before the purchase.
The seller must also provide the Statutes of the Community of Owners, and the documentation of recent meetings (minutes, last budget). If there is a building book, it must also be provided, especially in buildings less than ten years old, where the insurance for structural defects is still in effect. The habitability certificate is necessary for autonomous communities where it's required, and the last paid receipts of the IBI must also be available.
The sale will take place before a notary, but before that, it's recommended that the buyer and seller agree on a deposit contract. The buyer should also be cautious and verify the information the seller provides. One way to do this is by requesting a Simple Note from the Property Registry to confirm who the owner is and what charges weigh on the property. The description that the Note makes of the property is important to compare with reality and with the information that appears in the cadastre.
It's also recommended that the buyer consult the cadastral information of the property to know the material characteristics of the house, such as its age, surface area, and land use. Some apartments appear as storage rooms or premises in the cadastre, and if the information doesn't match that of the Property Registry, there may be problems obtaining the mortgage and registering the purchase. If there are doubts about the legality of the construction, it's possible to request an urban certificate from the city council.
Another very common mistake that occurs when not reviewing this point is to believe that we are buying a house and, after signing the contract of deposit and delivering to the seller 10% of the agreed price, we realize that in reality, that property is registered as an office, which in addition to numerous administrative inconveniences (such as not being able to register in that property) will require us to pay the VAT tax, which is 21% of the purchase price! and not the ITP that we thought initially (between 6 and 10%, depending on the autonomous community and other circumstances).
The buyer should also consult the property's tax value to avoid surprises in the Property Transfer Tax (ITP), which is calculated based on the reference value published by the Land Registry and can be checked online (be aware that since January 2023 there are 2 possible calculation methods). It is also recommended that the buyer request a copy of the latest minutes of the community meeting, in case there are planned expenses for repairs or fees that are not yet due but have already been approved. The buyer should also request copies of utility contracts (water, electricity, gas) to manage the change of ownership and request floorplans if available.
In addition, other factors such as the nationality and residency of the seller should be taken into account since if the seller is not a resident of Spain, the buyer will have to comply with some additional obligations (such as a 3% withholding tax).
Furthermore, in the buying process, it is essential to take extreme precautions and follow some advice to avoid unpleasant surprises after signing the contract. For example, in the case of second-hand homes, it is recommended that the contract and deed indicate that the property is sold "as is". This means that the buyer has examined the property and accepts it as it is, although the seller is still responsible for hidden defects for six months after the sale.
It is also important to request all necessary information about the supply of water and sewerage, especially in remote areas where there may be connection problems.
On the other hand, if the sale is made by a company and the buyer is a consumer, clauses that have not been individually negotiated should not be imposed. A frequent case is the payment of the municipal capital gains tax, which can be considered abusive. Remember that you only have to pay capital gains tax if there is a profit from the sale.
In summary, before buying a property in Spain, it is essential to inform yourself about your tax obligations and take all necessary precautions to avoid future problems. Or take the easy, safe, and smart path and delegate the entire process to Valido Home. Avoid stress and unnecessary risks in the purchase or sale of a property. Contact us now without obligation!
Miguel S. Moreira
Miguel is a trained architect and building engineer with a ample experience in the real estate sector. He is the co-founder of Valido Home and loves to inform about the risks involved in purchasing property in Spain.
