The buying process in Spain is not as strongly regulated as in France. As a buyer in Spain, you have significantly fewer rights than in France. That’s why this article explains the 5 main differences between real estate purchases in France and Spain.
1. Limited Role of Notary in Spain
In France, it’s customary for the notary to have an extensive control and advisory role in the purchase and sale of real estate. The notary verifies the origin of the property title and provides legal security to both the buyer and the seller.
In Spain, the notary has a limited control function and does not provide advice. Additionally, the notary does not automatically handle the safekeeping of deposits in their escrow account. In Spain, the role of a lawyer largely takes over the functions of a notary. Our team of lawyers assists you with legal checks on the property, the preparation of the compromise, and all necessary formalities of the transaction.
2. No Cooling-Off Period in Spain
In France, as a consumer, you have a 10-day cooling-off period after signing the purchase agreement. Within this 10-day period, you can cancel the purchase without giving any reason, and the deposit is refunded.
In Spain, this 10-day period does not exist. Once you sign the purchase agreement and make the usually 10% deposit (as opposed to the usual 5% in France), the purchase becomes binding. If you cancel the purchase, you do not have the right to a refund of your deposit. Also important to know, is that a suspensive condition for obtaining a loan is not common to include in the purchase contract.
3. Non-Guaranteed Blocking of Deposits in Spain
In France, a real estate agent is not allowed to request a deposit after accepting your offer. The 5% or 10% deposit, when paying for the purchase agreement, is held in escrow by the agent or the notary.
In Spain, after accepting your offer, a reservation contract is drawn up. Depending on the purchase price, you pay between 1,500 – 11,000 euros into the agent’s account. You have to stipulate that the deposit is refundable. With a reservation contract, you take an option and withdraw the property from the market for a certain period. Within this reservation period, we can carry out all checks on the property.
It’s important to know that sellers in Spain have the option to receive the 10% deposit into their own personal account. Therefore, it’s crucial to work with a lawyer so that your deposit can be transferred to an escrow account.
4. Higher Transfer Taxes in Spain
In most French departments, you pay a maximum of 5.80% in taxes on top of the purchase price. These taxes include departmental tax (up to 4.50%), municipal tax (1.20%), an advance on base and collection costs (2.37% on departmental tax), and a registration fee (0.10%). In the case of buying off-plan or new construction, you pay 20% VAT and registration fees of 0.715%.
In Spain, transfer taxes depend on the autonomous region. For example, on the Costa Blanca, you pay 10% or 11% transfer taxes, in Murcia 8%, in Andalusia 7%. For new construction, you pay 10% VAT and a stamp duty. On the flip side, other purchase costs, including notary fees, are lower in Spain than in France.
5. Seller’s Obligation to Inform
In France, you receive a comprehensive set of surveys with the purchase agreement, such as an asbestos report and a termite inspection. In Spain, the seller is only obligated to provide an energy performance certificate at the signing of the deed. In Catalonia, the seller is also required to provide a habitation license. Sometimes it’s advisable to hire an architect to inspect the property. The deadline for hidden defects in Spain is only six months for resale.
Conclusion: differences between Purchases in France and Spain
In Spain, as a buyer, you have significantly less protection than in France. The role of the notary is limited, and you need a lawyer to represent your interests. Confianz can assist you with legal advice when purchasing your property in Spain. We have French speaking legal advisors in our team.
