Buying a house in Spain
When buying a house in Spain, there are things to keep in mind, specially the debts of the previous owner.
Do I have to pay the debts owed by the previous owner?
First of all, the new owner is not responsible for the personal debts of the previous owner (not related to the house). Personal debts are not transferred to the buyer just because they buy a house. Conversely, what if those debts are related to the house? Here’s a look at common house-related debts:
-Homeowner community expenses (Gastos de Comunidad): Theoretically, if the previous owner owes these fees, the debtor is only the previous owner and there is no reason for the current owner to pay them for him. However, it is important to note that, according to the Spanish Community Management Regulations, if the previous owner does not meet the payment obligations, the creditor can claim them from the new owner. The new owner will then have to pay the debts of the previous owner for the current year (i.e. the year in which the house was purchased) and for the last three years.
-Property tax (IBI): According to the Spanish Local Finance Law, in general, if the previous owner owes property tax and the government fails to collect it, the new owner will be required to pay the property tax owed for the previous four years.
Related article: Spanish IBI real estate tax explained
-Property Transfer Tax (ITP): According to the Spanish Law on Property Transfer Tax, like the property tax, if the previous owner owes the property transfer tax and the government fails to collect it, the new owner will have to pay the tax owed for the previous four years.
-Water, electricity, internet, etc.: Simply put, the water, electricity, etc. should be paid by whoever is named in the supply contract. The supplier may not recover them from the new owner. However, in reality, if the previous owner does not pay the utility bills, the water and electricity will be cut off, and then, although the new owner does not have to pay for him, sometimes the supplier will “force” the new owner to settle the debt before allowing the water and electricity to be reconnected. In fact, the utility provider has no right to do so, so if you encounter such a situation, you should go to the consumer bureau and complain.
In summary, when buying a property you should make sure that the owner does not owe any taxes as well as comunity fees. You can ask the seller to show you his previous tax returns and a certificate of non-debtt of fees to avoid unnecessary problems.
Pay attention to whether the house has been seized due to personal debts
Although, according to the above, the personal debts of the old owner will not affect the buyer. However, it is important to note that creditors of the old owner can apply for seizure of the assets. Therefore, when buying a house, you need to be aware that the house you are buying is not under seizure (“embargo” in Spanish).
It is also important to note that the property is not mortgaged to a bank or third party institution, because if this is the case, the bank or third party institution has the right to execute the mortgaged property if the old owner does not fulfill the debt.
