Eight Tips on Buying Off-Plan in Spain
13 March 2019
Photo credit: courtesy of Stavanger Group, Belfry villas, Estepona
The sales season is upon us.
Whether you are looking to buy as an investment or for pleasure, now is the right time to dip back into the Spanish market. Low prices and cheap mortgages won’t last forever.
Property prices in Spain (confirmed sales) jumped by almost 10% in the 1Q 2018.
The overall number of house sales increased 23% year-on-year in January 2018.
The construction sector in Spain has increased 6% year-on-year on the 1Q 2018. This explosive surge in growth is unprecedented since the year 2001.
Brick is back. Can you afford to miss out on your dream home?
8 Tips on Buying Off-Plan in Spain
1. Hire a qualified registered lawyer (Abogado)
Don’t be in a rush to hand over your money without having hired an independent lawyer first; do not allow yourself to be pressurized by intermediaries. Rash decisions often turn out to be expensive mistakes in life.
2. Plot of land under a developer’s name
One should never buy an off-plan unit in a land that is still not registered under the developer’s name. There are far too many associated risks to take a gamble with your hard-earned money.
3. Building Licence
This is by far the biggest mistake that a buyer can possibly make. Many problems could easily be staved off on following it. The Building Licence will ensure that the building is above board and the property is not being built in green belt land, for example
4. Bank Guarantees
A bank guarantee is of critical importance, acting as a safety net securing all your stage payments, should the developer fail to complete your property.
5. Licence of First Occupation
A Licence of First Occupation is a certificate issued by a town hall which confirms that a newly-built property (off-plan) fully complies with all planning and building regulations and is fit to be used as a dwelling. It assures compliance with Health, Access, Safety, Planning and Construction laws, and that the property has been fully completed, with no outstanding works.
The LFO allows off-plan purchasers to dwell in a property legally.
In general, I advise you not to complete without a Licence of First Occupation.
6. NIE number
A NIE number is a Fiscal Identification Number for foreigners and is required, among other things, to buy property in Spain.
7. Snagging list
Before you complete on a newly-built property you should always do a snagging list of the property. You can either draw up a snagging list yourself or else appoint one of the many reputable companies that may carry it out on your behalf.
8. Post-completion: dealing with property taxes, utilities, community fees & other
Once you have acquired your new Spanish property, you will have to face all the associated running expenses. Make sure you have carefully budgeted for this to avoid unpleasant surprises!
Legal services available from Larraín Nesbitt Lawyers
- Conveyancing – Buying
- Conveyancing – Selling
- Rentals (contract drafting)
- Rentals (read & review)
- Non-Resident Income Tax (Fiscal Representation) from €90/year
- Holiday Rentals Accounting Service (HRAS) from €100
Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.
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