The purchase and sale of real estate in Spain by foreign investors are one of the most common legal transactions. It is very popular to buy a second home in Spain for holidays or, in case of emigration, the main residence to settle in Southern Europe.
If you are one of them, you have probably already read our article on taxes on buying and selling property in Spain, but you should also consider registering your property. In this article, we explain how and where to register a property in Spain.
Real estate in Spain
The legal framework regarding land and real estate are different in Spain than in other countries. The main differences, which you will find if you are a foreigner, are:
- Real estate can be transferred informally. This means that property if all contractual requirements are fulfilled, can be acquired orally and even without a deed.
- There is no general principle of registration in the land register. The registration of property only has a testimonial legal effect and not a constitutive effect.
Registration is, therefore, with some exceptions, voluntary. At present, it still happens exceptionally, especially in rural areas. The land is not registered in the land register.
What is the Land Registry?
The Land Registry in Spain is an official database which lists the owners of each property. It must be updated every time a property is sold and changes hands. This protects property rights and eliminates the possibility of selling twice. Although it is not legally obligatory, it is always a good idea to register a new property in your name with the Land Registry.
Firstly, it is the title deed that confirms the owner and therefore his or her ownership rights are secured. However, since the information recorded in the Land Registry is more detailed and includes information such as the boundaries of the property, its size and dimensions, its ownership history and any remaining encumbrances that exist, proceeding with registration is an important additional source of legal certainty.
The registration of a property in the Land Registry provides important protection for owners. The Land Registry also provides useful information for those looking to purchase a new home, including:
- A detailed description of the property and its associated features.
- The boundaries and coordinates of the property.
- Its history.
- A description of the ownership documents.
- Whether the property was acquired by purchase, auction or gift.
- Any remaining encumbrances such as mortgages, loans or conditions of sale.
The process of registering a property
1. Pre-registration
The first step is the pre-registration, for a period of sixty working days, in the so-called “Libro Diario”. The documentation must be submitted to the relevant land registry office, depending on the location of the property.
2. Qualification of the document
The registrar then confirms the qualification of the document within 15 working days. If the registration is approved, it is processed and, once registered, the document is returned to the applicant with a footnote signed by the registrar.
If the registration is not approved, it is because the registrar has detected an error in the document and must state the legal grounds and facts justifying the refusal. Subsequently, the person requesting this registration, the notary who certified the deed or, where applicable, the authority from which the deed originated, will be notified.
The registrar shall extend the time limit for submitting the registration by sixty days from the date of the last notification. If registration is refused, the applicant may choose to remedy the defect if possible or may appeal against the registrar’s decision.
What is the Cadastre?
The Registro Catastral is a secondary system created in Spain to deal with the ownership, description and boundaries of all land in the country. Basically, the Real Estate Cadastre records information about the property, where it is located on the maps, what is the size of the building, what are the boundaries, the coordinates, etc. The information that can be found in the Cadastre Register:
- Plans of the property.
- Accesses to the property such as roads, rights of way…
- Cadastral number, which gives access to tax information.
- The details of the land are contained in the title deed signed at the time of purchase, to be completed, if necessary, by a certificate of new construction.
Cadastral Updating
Upon completion of the construction of a house, or an extension, such as a new room or any other structure such as a swimming pool, a garage, or a shed, this new change must be communicated to the Land Registry and also to the Cadastre. Sketches and plans of these new structures or new extended parts of the property need to be provided to the land registry office.
Otherwise, you may have problems in the future because the land registry will never know about the existence of these new structures. The cadastral update is a mandatory requirement, as the property tax is calculated according to the size of the buildings. Therefore, if the size of the property changes, it must be reported to the Cadastre so that the property tax bill can be changed and adjusted accordingly.
Since the registration of changes in the land register is “voluntary” and the updating of the register is “compulsory”, it is quite common to find large discrepancies in the description of properties on the market. If you have any questions about how to register your property in Spain, please contact our tax advisors in Barcelona by phone or email.
