Buying a house in Spain sounds wonderful, and it is wonderful. But what are the pitfalls of buying a house in Spain? When you picture it you think of sun on your face, a sea view and a glass of wine in your hand. But before you can see yourself sitting on that terrace, there is one crucial step: knowing what you are doing. Because the Spanish housing market is beautiful, but it is also complex. You've heard the cowboy stories….
Contents
- Which documents do you need?
- What should be in your purchase contract?
- Permits and the zoning plan: this you really must know
- The risks and pitfalls of buying a house, and how to avoid them
- Especially for foreign buyers
- Buying a house in Spain (on the Costa Blanca North) doesn't have to turn into a nightmare.
Becoming an estate agent in Spain, is it really that easy?
As it happens, yesterday I got a message from my old neighbour, who is an estate agent. 'What's going on in Spain, can anyone just become an agent over there?' Erm, yes. And in the Netherlands too. The big money beckons for a lot of people. They hear you get 5% for selling a house. Pffff, those are tidy sums. You only have to sell a handful of houses for a year's salary.
There's a Facebook page here where someone keeps asking questions about everything you ought to investigate and what you actually get. Honestly? I found the way he put his questions passive-aggressive and I didn't find him all that likeable. But he did trigger something in me. Because, hang on? None of this had been taught to us anywhere. Nobody was talking about it….. We assumed everything was fine because we had brought in a lawyer. But some things turned out to be absolutely crucial. So we now advise clients to request a legality label before signing the reservation contract, and to have the lawyer request everything.
We can't check everything for you, but we can make sure it gets checked
For us as an NVM agent it grates that you can't look everything up and check it yourself. Here we depend on third parties. That's exactly why we think it is so important to inform you properly. So that you know what you are doing. So what are those pitfalls of buying a house in Spain? How do you find out? We bring in the right parties, the ones who can check everything. We make sure you can see the wood for the trees again 😉 Because honestly, it is so different and so complicated here. How do you know what you need to know? Because how do you know what you don't know?
Because let's be honest: things really are arranged differently here. And that is exactly what makes it exciting, sometimes confusing, but above all something you need good guidance with
In this blog we explain step by step what to look out for when you buy a house on the Costa Blanca North. We don't want you buying a pig in a poke. You're putting your pension money into it, after all. Or the money you have worked hard for, and may still be working for. We want you to be in love with your house, but also to know that everything about it is in order. This purchase has to be made with your eyes open.
Which documents do you need?
No safe purchase without the right paperwork. The documents differ slightly between existing homes and new-build, but the logic is the same. You need to know that the house is legal, that the seller is entitled to sell, and that you really will become the owner without any surprises. But you also need to know whether the house could be rebuilt if it burned down, for instance. Pretty crucial.
Once the negotiations are done, a reservation contract is drawn up. You usually pay around €5,000 and the property comes off the market. After that you bring in the lawyer. A lawyer usually costs 1% of the purchase price. All fairly hefty amounts if crucial things turn out to be wrong. You want to know the risks attached to the property before you go any further. We recommend requesting a legality label up front. That way you already know the risks that come with buying that particular house. Happy to go ahead? Then you sign the reservation contract and have the lawyer check everything.
Existing homes
| Document | Spanish | Who provides it | Why does it matter? |
|---|---|---|---|
| Proof of identity | NIE/DNI | You | No purchase deed without this number |
| Title deed | Escritura | Seller | Proves that he or she is the owner |
| Land registry extract | Nota Simple | Lawyer | Shows any outstanding debts or mortgages |
| Owners' association statement | Certificado de comunidad | Seller | Stops you picking up someone else's arrears |
| Energy certificate | Certificado Energético | Seller | Compulsory when selling |
| Habitation certificate | Cédula de habitabilidad | Seller | You are officially allowed to live there |
| Proof of tax and utility payments | Justificante de pago | Seller | Everything is paid up to completion |
| Installation certificates | Boletines | Seller | Connections are safe and certified |
| Document | Spanish | Why is it crucial? |
| Building permit | Licencia de obra | Without it, building is illegal |
| Completion certificate | Final de obra | The architect confirms: the build is technically finished |
| First occupation licence | Licencia de primera ocupación | Without it you may not live there or connect to utilities |
| Ten-year structural warranty | Seguro decenal | Legally required warranty against structural defects |
| Bank guarantee for payments | Aval bancario | Your money is protected if the build is delayed |
Can't you see these documents before signing at the notary? Then you're taking a risk you could easily have avoided. I'd almost say: your own fault, your own problem.
New-build
Buying a new-build home off plan? Some important extras come into play here:
| Document | Spanish | Why is it crucial? |
| Building permit | Licencia de obra | Without it, building is illegal |
| Completion certificate | Final de obra | The architect confirms: the build is technically finished |
| First occupation licence | Licencia de primera ocupación | Without it you may not live there or connect to utilities |
| Ten-year structural warranty | Seguro decenal | Legally required warranty against structural defects |
| Bank guarantee for payments | Aval bancario | Your money is protected if the build is delayed |
What should be in your purchase contract?
Your contract is your safety net. It stops verbal promises evaporating the moment you have signed.
- Details of all parties
- A clear description of the property (m2, location, cadastral reference (and, for example, that the utilities are connected)
- The total purchase price and the payment plan
- Who pays what? (tax, notary, estate agent)
- Completion date and conditions (e.g. that the property is empty, and what stays behind)
- A clause: completion only after receipt of the LPO and the Final de obra for new-build
A good contract makes sure that you, as the buyer, always stay in control.
Permits and the zoning plan: this you really must know
Was the house built legally? Are you allowed to renovate it and to rebuild it? What may be built nearby? The answers are in the zoning plan (PGOU).
Have your lawyer or architect check the following:
- Is the land “urbano” or “rústico”?
- Is everything registered with the Catastro and in the property register?
- Are there future building plans in the immediate area?
- Are you allowed to rebuild if the house is damaged?
The legality label checks all of this for you. Not requesting the label? Then make sure the lawyer requests it on your behalf. Without these checks you might be buying a view that turns into a car park in two years' time.
The risks and pitfalls of buying a house, and how to avoid them
Existing homes
- Alterations carried out without a permit
- Arrears on charges, or tax debts
- Squatters or tenants who won't simply leave
- Technical defects that only come to light after the purchase
New-build
- No permits or warranties at handover
- Construction delays with no compensation
- No utility connections because documents are missing
- Poor build quality or deviations in the materials used
With a good lawyer and a surveyor you avoid 90% of these problems. And at Gusto Casa we tell you honestly when a property doesn't stack up, even if that means we don't buy anything.
Especially for foreign buyers
- Apply for your NIE number before you sign anything
- Open a Spanish bank account for payments and direct debits
- Count on 12–15% on top of the purchase price for costs and taxes
- Have contracts and properties checked by independent professionals
- Make sure you understand every step. Ask for an explanation, with an interpreter or a translation if need be
We're happy to help you at every step of the process.
Buying a house in Spain (on the Costa Blanca North) doesn't have to turn into a nightmare.
Buying in Spain isn't rocket science, but it can be an unpredictable minefield. Don't let yourself be led up the garden path. It really is different from the Netherlands. The oversight in particular is genuinely different. For years there was less enforcement and everything was less regulated, and that is how a great many illegal situations came about.
Without proper preparation, experience and guidance it can feel like jumping in at the deep end without knowing whether there's any water in the pool 😉
At Gusto Casa we believe in clarity, honesty and a healthy dose of Dutch down-to-earthness. We'll tell you what is possible, but also what you would be better off letting pass. We'd rather do one deal fewer than leave a client with a pig in a poke.
Want to be sure that your Spanish dream home stacks up on paper too? Call us. Email us. Or drop by for a café con leche.
