Purchasing property in Spain can be a dream come true, but navigating the legalities of real estate contracts, especially for non-Spanish speakers, can feel overwhelming. Spanish property contracts are written in technical legal Spanish, often containing terms and clauses that may be unfamiliar. Misunderstanding these documents could lead to significant complications or even fraud.
In this guide, we explore the key terms you’re likely to encounter in Spanish real estate contracts and provide their English translations. By understanding these terms, you can confidently navigate the property-buying process in Spain. At the end of this article, you’ll also find practical tips to protect yourself from fraud and make your purchase as smooth as possible.
Contrato de Compraventa (Purchase Agreement)
The Contrato de Compraventa (Spanish Property Purchase Contracts) is the backbone of any real estate transaction in Spain. This contract formalises the agreement between the buyer and seller, specifying key details such as the property’s description, price, payment terms, and any conditions for the sale. It’s signed once both parties agree on the terms, and it becomes legally binding.
Escritura Pública (Public Deed)
The Escritura Pública is a notarised document that officially transfers ownership of the property to the buyer. This document is signed in the presence of a notario (notary public), who acts as an impartial legal authority to ensure the transaction complies with Spanish law. After signing, the deed is registered in the Registro de la Propiedad (Land Registry), securing the buyer’s ownership rights.
Nota Simple (Land Registry Extract)
The Nota Simple is an essential document that provides a snapshot of the property as recorded in the Registro de la Propiedad. It contains key information, including the property’s legal description, the owner’s name, any debts or mortgages attached to it, and its boundaries. This document is vital for confirming the property’s legal status before committing to a purchase.
Arras (Deposit Agreement)
The Arras agreement is a common practice in Spanish real estate transactions. It’s a preliminary contract where the buyer pays a deposit—typically 10% of the property price—to reserve the property. If the buyer backs out of the deal, the deposit is forfeited. Conversely, if the seller backs out, they must return the deposit, often doubled.
Impuesto de Transmisiones Patrimoniales (ITP) and VAT
Taxes are an integral part of property purchases in Spain. Resale properties are subject to the Impuesto de Transmisiones Patrimoniales (ITP), which ranges from 6% to 10% depending on the region. New properties, on the other hand, are subject to VAT (IVA), usually 10%. Understanding these costs helps you prepare for the total expenses involved in buying a property.
Certificado Energético (Energy Certificate)
The Certificado Energético provides an assessment of the property’s energy efficiency, rating it from A (most efficient) to G (least efficient). This certificate is mandatory for all property transactions in Spain and gives insight into the energy consumption and potential future costs of the property.
Tips to avoid Fraud and ensure a smooth Purchase
- Verify Ownership: Always request the Nota Simple to confirm the seller is the legitimate owner of the property and that there are no outstanding debts or claims.
- Work with Reputable Professionals: Engage a bilingual lawyer experienced in Spanish property law to review all contracts and ensure your rights are protected. Use a trusted notary for the signing process.
- Avoid Suspiciously Low Prices: If the price seems too good to be true, it probably is. Sellers offering unusually low prices may be hiding legal or financial issues with the property.
- Secure Deposits Properly: Pay deposits through a secure escrow account or a lawyer’s client account. Avoid transferring money directly to the seller’s personal account.
- Check Tax Obligations: Ensure the declared property value in the contract matches the purchase price. Under-declaring the value to save on taxes is illegal and could lead to severe fines.
- Confirm Registration: After signing the Escritura Pública, ensure the property is registered in your name at the Registro de la Propiedad promptly. Delays can leave you vulnerable to disputes.
- Inspect the Property: Conduct a thorough inspection to verify the property matches its description in the contract. Check for unapproved extensions or construction issues that could lead to legal problems.
Why work with Albir Abogados?
Navigating Spanish Property Purchase Contracts and Real estate law can be challenging, but having the right legal team by your side makes all the difference. Albir Abogados specialises in providing expert legal assistance for property transactions in Spain, ensuring your investment is safe and your rights are fully protected. With years of experience in Spanish property law and a commitment to transparency, they guide clients through every process step, from initial property checks to final registration.
Whether you need help translating complex contracts, verifying property ownership, or ensuring compliance with Spanish tax laws, Albir Abogados is your trusted partner for a seamless and secure property purchase. Visit their website or contact their team today to start your journey toward owning your dream home in Spain!