There are many pitfalls in purchasing a property in a foreign country and Spain is no different. With a combination of strange laws, selling difficulties, inheritance law and a reputation for dodgy dealing it is a good idea to beware of the potential dangers to your wallet and sanity.
Beware of dodgy dealers
Whilst most people encounter no difficulty buying a property in Spain there are some that fall victim to unscrupulous dealers. Recently the British embassy in Spain released a statement warning against such people.
“You should exercise extreme caution if an estate agent, promoter or lawyer urges you to cut corners to save money or time,” said Embassy property adviser Alex Brown. “The Spanish property conveyancing system is different to the UK,” she explained. “When you choose an estate agent, promoter or lawyer to help with your purchase, check that they are qualified, reliable professionals and have significant experience of operating in Spain and expert knowledge of how the system works. We strongly urge people to check the advice in full, make sure they use fully qualified, reputable advisers throughout the purchase process, and avoid any kind of ‘dodgy deal’ that could end up costing huge amounts of heartache and hard-earned money later on.”
If you die whilst in Spain your relations will be faced with a confusing set of rules and laws regarding your property and assets. The Spanish Laws on Inheritance state that, on your death, your estate will be shared among the heirs as per the law of the country from which you originate, for example British law for a British national. Confusingly however British law states that you must follow the law of the country in which you died, i.e. Spain. To avoid this confusion it is advised that you write a Spanish will and testament relating to your assets in Spain. If you are in a couple each of you will have to prepare their own will as Spain does not recognise joint Wills.
Spain has been making headlines lately and they’re often not good. Since the global recession began in 2008 many countries have suffered but it has only been in the last few years that countries like Greece, Italy and Spain has felt the full brunt of the debt crisis. As a result the countries government has been forced to impose harsh austerity measures forcing up prices and leaving the countries people worse off. There has been political unrest but so far not on the scale of that seen in Greece.
Possible problems with selling property
When selling a property in Spain you should be aware of the various costs you will have to pay. The main costs are as follows:
Community fees – make sure your community fees are up to date normally you will have to present a CERTIFICADO DE COMUNIDAD.
Mortgage cancellation fees- your bank will probably charge from 0.5% to 1% for a cancellation on top of that you have to ensure you notify the Notary and registry, this can cost from 600 Euros to 1000 Euros.
Agents Commission – If you have used an Agent to sell your property, then you will also have to account for the Agents fees which can range from 3% to 8% depending on the agent, and the agreement you have made with them.
Plus Valia – every seller has to pay a tax based on the incremental value of the land which the property occupies over the amount of years you have owned it.
Strange property laws
A strange new law was introduced of February 2012 by Spain’s minister for development, Jose Blanco. In it all residential buildings are to have a ‘technical’ safety inspection. What’s strange about the new law is that it only applies to towns with a population of more than 25,000 people. It seems that all smaller towns and villages old buildings never become unsafe. Another controversial law called the land grab law resulted in many expats homes and lands being seized by the Spanish government. It is wise to research the many laws in force before committing to buying a property.