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PROPERTY

How not to buy a house in Spain: The top five pitfalls to avoid

Buying a home in Spain comes with its challenges, not least the possibility of being scammed, getting charged hidden fees or missing key points in the smallprint. The Local spoke to someone who experienced these problems first-hand to help others avoid them.

Published: 18 February 2020 09:45 CET
Updated: 15 April 2024 07:50 CEST
Remember that buying a house in Spain is not the same system as buying a house in your own country of origin. Here's how to avoid possible scams. Photo: Elisa Ventur/Unsplash
Don't rush into buying a property in Spain before first doing your homework. Photo: Jose Francisco Fernandez Saura/Pexels

There are many examples of people’s dreams turning into nightmares after falling into the trap of unscrupulous property developers, real estate agents and lawyers.

They may speak English and seem friendly, they may even tell you that “this is how things are in Spain”, but that doesn’t mean you shouldn’t do your own checks.

The Local spoke to Ralph de Jong, a Dutchman who in 2020 set up an independent property assessment service after falling victim to a scam himself when he bought a home in Mallorca.

Here are his five steps to avoid ruining your dream (and losing your life savings in the process).

1. Check the property is legal

Many buyers have a wish list when they search for their perfect home, but before you start negotiations, you yourself can check whether property is legal.

Visit the town hall and ask for all documents about to the house. Compare the drawings from Catastro (land registry) and registro de propiedad (property registry) with the actual position of the house itself and not just the plans you have been given.


If the house is illegal they could send the bulldozers in. Photo: Depositphotos.

2. Does it have a valid residence permit?

One of the most important documents to ask for is the residence permit, either the Cédula de habitabilidad or Licencia de primera ocupación, and check if it is valid. Depending on the municipality, this has a validity period.

But beware, every permit is immediately invalid if the property has been illegally renovated or extended.

Consider, for example, a casita, an extension or a swimming pool – even though a real estate agent or lawyer may claim that these illegal works are not known to the municipality, or have been built so long ago that it no longer matters they could still invalidate your permit.

In almost every municipality if a property is Fuera de Ordenación (without the proper planning permission)- which covers all manner of illegality – it will have the following consequences:

  • Permits for a (holiday) rental or B&B are no longer valid
  • No permits for renovation or rebuild
  • The property is uninsured in the event of major damage even if premiums have been paid
  • In the event of damage, there’s a chance of lengthy procedures with the municipality in connection with a permit for repair or rebuilding
  • If your house is declared AFO (Asimilado Fuera de ordenación – without proper planning permission) in the case of non-compliance with the law (renovation without a permit), you could face a lengthy legal battle.
  • No possibilities for new connections to gas and electricity
  • Risk of an infracción urbanistica (open file at the town hall)
  • Fines

3. Do not incur lawyers’ fees or sign anything before you know that everything is in order

A lawyer is often called in after the negotiations. There are of course costs involved, and these costs usually have to be paid in advance.

If the property is not in order you lose your money. Some real estate agencies also ask for a deposit, so that the house won’t be sold during the process. You will not be the first to have difficulties getting your deposit back if you decide not to move on with the purchase. You should put the deposit on the notary’s account to avoid this pitfall.

Another important thing you should know is that there is jurisprudence that says that if a purchaser used a lawyer in the buying process the purchaser loses his rights on possible claims when problems occur afterwards.

And finally don’t make the same mistake as many purchasers do by choosing a lawyer because of the language instead of by knowledge, professionalism and ethics. Always choose an independent lawyer and not the one recommend by the estate agent, and preferably one that signs an integrity code.


Don’t sign before you are sureof what you are getting. Photo: Depositphotos.

4. Have the house inspected thoroughly

You can try to investigate yourself, but the risks are high so get yourself some independent professional advice.

Any real estate agent or lawyer who says you don’t need to do a full inspection might have something to hide.

5. Do not pay before the property is registered in your name on Registro de la propiedad

In Spain a property is paid for at the notary when you sign the completion.

But what some people don’t realise is that there is a few months between payment and registration of your name on the register. There may be problems with property boundaries, easements, previous owners etc.

But as you have already paid and signed, all problems that might occur will be for you to solve. Do not underestimate the consequences if you were not guided correctly.

Ralph de Jong is part of a team that has developed the IGP-inspection to provide independent assessment of properties ahead of purchasing.

For more information about how to prevent making errors when you buy visit the website: https://www.casapropia.es/

Member comments

  1. Thanks for the excellent article. I’d like to know how one can avoid paying until one’s name is on the Registro de Propiedad if payment is required on completion at the notary. Does anyone have experience of this?

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PROPERTY

Why Spain is looking to Vienna to fix its housing crisis

Spain is trailing behind the rest of the EU when it comes to social housing and has one of the lowest proportions of stock, so could replicating the Austrian capital's model be the solution?

Published: 26 April 2024 10:50 CEST
Why Spain is looking to Vienna to fix its housing crisis

According to figures from Spain’s Land and Housing Observatory, in 2020 just 2.5 percent of total constructions in Spain were for social housing, far lower than in countries such as Austria, where it was 24 percent, the Netherlands, with 30 percent, and Denmark at 20.9 percent. 

Spain is one of a small handful of EU countries that have surprisingly low social housing provisions. Spain ranks 18th in the EU overall and is joined at the bottom of the table by countries such as Romania (1.5 percent), Estonia (1.7 percent), Croatia (1.8 percent) and Portugal (2 percent).

Spain’s 2.5 percent figures are also much lower than the wider European average of 9.3 percent. In recent years, Spain has not even managed to complete 10,000 social housing units per year, compared to 60,000 a decade ago.

READ ALSO – EXPLAINED: How Spain plans to address its huge lack of social housing

Furthermore, public housing has become increasingly privatised in recent years, affecting most of the almost 2.5 million subsidised homes built since 1981, when the first plan was approved. In 2012, the construction of social housing plummeted and dropped from 50,000 homes annually to just 9,200 in 2022.

The Viennese model

For decades now, Vienna, the Austrian capital, has increased its stock of price-controlled social housing and has stood out for its housing policy.

Although there is social housing throughout the country, the majority of it is concentrated in the capital city. 

The Vienna City Council has become the biggest homeowner in Europe – around 60 percent of residents live in one of 220,000 properties subsidised by the public sector, and the city invests up to €600 million annually in affordable housing models.

By increasing social housing and limiting rent, the value of housing has also been limited and prices have been regulated. For example, in Vienna, rent is around €9 per m/2, according to the consulting firm Deloitte.

This figure is much lower than that of the rest of the European capitals, compared to London or Paris, for example, where the rental price per m/2 is around €30. In comparison, rent in Barcelona and Madrid is around €17 and €14 m/2 respectively.

The requirements to be able to access social housing in Vienna are also very broad. Basically, you need to be 17 years old or older, be registered Vienna and earn more than €43,000 net annually. Rent can also not represent more than 30 percent of your income.

READ ALSO: Spain needs to build 1.2 million affordable rental homes in a decade

How Spain is planning on replicating the Vienna model

Spain, like many EU countries, has begun to turn towards the Viennese model.

Madrid in particular hopes to increase the real estate stock by 70,000 homes in four years, of which up to 40,000 will be dedicated to social housing according to regional president Isabel Díaz Ayuso.

Like in Vienna, Madrid hopes to balance the real estate market naturally without limiting prices. For example, in Vienna where the private real estate stock has been regulated, 60 square meter homes can vary between €600 and €700 per month. This is almost impossible in Madrid and Barcelona, where a home with the same characteristics can exceed more than €1,000 per month.

The Spanish government recently approved a plan to allocate 50,000 ‘Sareb’ homes to bolster its dwindling social housing stock. La Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria or ‘Sareb’ was created eleven years ago to buy real estate assets from banks that went bankrupt during the 2008 financial crisis, and has been state-run since 2022.

Sánchez followed up on this 50,000 pledge by announcing the financing of a further 43,000 homes for social housing paid for with €4 billion of European funds.

“I want to announce that, in addition to the mobilisation of 50,000 Sareb homes, we are going to finance the development of another 43,000 new homes for social rent and rent at affordable prices,” the Prime Minister said.

He also criticised Spain’s “embarrassing” social housing stock compared to Europe, and reinforced his “commitment” to “move forward so that housing is a right and not a problem for the majority of citizens”. 

Having an extensive public housing stock allows prices to be lowered and ensures that there’s sufficient supply.

Christian Schantl, the head of the International Relations department of the public company Wiener Wohnen, the entity that manages public rentals in the city of Vienna, has advised Spain that to do this, they should not sell public housing under any circumstances.

In an interview with El País he said: “You cannot completely copy and paste the system, it would not work. One thing [the Spanish Government] should not do is sell its public housing. This is very important because many cities in Europe have made that mistake and are now facing serious problems. So that’s the first thing: never sell what you have. And then, there are some elements that are important to take into account, such as the financial situation, the necessary land, the legal framework and housing policies,” he continued.

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