Buying a second home or an investment property in Spain, and specifically in Catalonia, is a complex process that differs significantly from property practices in Belgium and the Netherlands. Proper legal guidance is essential in this regard.
A key moment in this process is the letter of intent to purchase (the promise to purchase). In Spanish practice, this is not a one-off transaction, but generally takes place in three to four stages that must be strictly followed: the offer, the reservation, the legal due diligence and, finally, the binding arras contract. We will outline the steps for you.
Step 1: The booking document (Promesa de Compraventa)
Once you have found a suitable property, the process usually begins with a letter of intent to purchase or a formal offer. This document sets out the basic terms of the transaction:
- The price: The amount you are offering for the property.
- The deadline: The validity period of your bid (usually 3 to 5 days).
- Conditions precedent: This document includes clauses relating to the securing of finance or the findings of a structural survey. Note: Spanish estate agents will often try to exclude or minimise these conditions. It is essential to be firm on this point in order to protect your assets.
If your bid is accepted, the property will be (temporarily) withdrawn from the market so that the legal checks can be carried out.
Step 2: The booking deposit
To demonstrate the seriousness of your offer, Spanish practice requires a reservation deposit. This is usually a sum of between €3,000 and €6,000.
- If the offer is rejected, this amount must be refunded immediately and in full.
- Upon acceptance, this will count as the first instalment of the final purchase price.
Important advice: Never pay this reservation amount directly into the seller’s personal account. Please use only a third-party account for this purpose, such as our firm’s third-party account or a third-party account held by a a registered estate agency.
Step 3: Essential legal due diligence (BEFORE the arras contract)
This is the most critical stage of your purchase. Between the acceptance of the offer and the signing of the actual purchase contract (the arras), a thorough legal, planning and tax review (due diligence) must be carried out.
It is a fundamental mistake to sign an arras contract before we have carried out a full due diligence check on the property. After all, in Spain, debts (such as unpaid property tax or service charge arrears) and planning infringements are often linked to the property itself, rather than to the individual. Without a prior check, you risk having to take on these liabilities. Among other things, we will check the following for you:
- Whether the property has been built and licensed in full compliance with the law.
- Whether there are any mortgages, attachments or outstanding debts attached to it.
- Whether the seller is the rightful and sole owner with the authority to sell.
Only once this due diligence has produced a conclusive and positive result can we safely proceed to the next step.
Here you will find more information about our buying advice service.
Step 4: Signing the ‘Contrato de Arras’
Once the legal certainty of the transaction has been guaranteed, Confianz will issue the contrato de arras (the private sale agreement) or shall we look into this? Although people in Belgium often refer to a ‘provisional’ sale contract, this agreement is extremely binding in Spain.
In Catalonia, the Arras Penitenciales (in accordance with Article 1454 of the Spanish Civil Code). This mechanism works as follows:
- Payment: Upon signing, you will pay a deposit of 10% of the agreed purchase price (less the reservation fee already paid).
- Breach of contract by the buyer: If, after signing, you unilaterally decide not to proceed with the purchase, you will forfeit this full deposit of 10%.
- Breach of contract by the seller: If the seller withdraws (for example, because they have received a higher offer), they are legally obliged to refund your deposit plus a penalty equal to that same amount. You will therefore receive double your deposit back.
Seamless processing right through to the notarial deed
Once the arras have been signed, the terms of the sale are finalised. The final step is the execution of the notarial deed (Escritura Pública) before a Spanish notary and payment of the outstanding balance (90%).
Another important step is to apply for an NIE number. This is a tax identification number for non-residents in Spain, and you will need it when making a purchase. Here you will find more information about the NIE-number.
Decision: A property transaction in Catalonia offers excellent prospects, but entails specific risks due to differences in language and legislation. Seek proactive guidance from an independent professional at every stage of the purchase process. This will ensure a safe and hassle-free purchase.
