Country Article / Postcards

Are you about to buy an illegal property?

Date: 01/22/2007

With year-round sunshine and an abundance of good food and drink, Spain is a perfect choice for full- or part-time living. Plus, many bargain properties still exist, particularly further from the coast. However, many properties have an illegal overbuild or may not have been registered. As such, we advise you to use extreme caution when purchasing property here. We’d like to offer a few tips to help make your property purchase hassle-free.

In this country, it is not unusual for land to have been owned by the same family for centuries. Though land tax ( IBI; impuesto sobre bienes inmuebles) is due at the time of property registration, this is often put off until the land or property is sold. When you decide to purchase land, with or without property on it, don’t pay a deposit until a document called nota simple is available—this is an extract of the deed. If the land is not registered this document will not exist; if there is a property on the land but the property is not specified on the nota simple, it is not registered.

If the land itself is not registered, a catastral number will need to be assigned through the ayuntamiento (town hall). As soon as a catastral number is issued, land tax (IBI) will be applied, probably with some delay. However the land also needs to be registered in the land registry, or registro de la propriedad. The time this takes varies from place to place. Don’t forget to determine whether the buyer or seller is expected to pay for these costs.

In the case where the land is registered but existing property is not, the structure must be at least four years old to qualify for registration; this stipulation was set up to allow local council to discover and eliminate illegal constructions. If the structure qualifies for registration, a reputable architect is required to submit a complete plan to the town hall for authorization. In some parts of Spain, a notary seal may also be required.

In the case where land or property has not been previously registered, the buyer may be liable for any unpaid debt incurred by the seller. Common practice in Spain is to add the amount of any unpaid debt to the asking price of the property in order to ensure that the debt is eventually paid. When the land and/or property has been registered with the land registry, there may be a clause on the nota simple referring to “La Ley de Hipoteca.” This is a warning to banks to exercise caution in granting a mortgage on the property in question for a specified period of time, generally between two to five years, during which additional charges may apply.

Always be sure to use a professional broker—he or she will be worth every penny. The staff at Orange Finance, website: www.orangefinance.eu.com , is experienced and will be happy to answer any questions you may have. IL