Five things you only discover after the notary

The deed is signed, the keys are in your pocket and the glasses have been raised. To most buyers that feels like the finish line. In reality, that is the moment a set of obligations begins that is rarely explained beforehand — and some of them cost money you had not budgeted for. These are the five we come across most often.

1. The previous owner's debts travel with the property

For northern European buyers this is the biggest surprise. In Spain certain debts attach to the property, not to the person. Whoever buys the property buys the debt with it.

For contributions to the owners' association it concerns arrears for the current year and the three preceding years. If the seller has not paid for three years, the association can recover that against your property. With the IBI property tax it works much the same way: the property itself stands as security for unpaid bills.

The seller is supposed to produce a certificate from the association at the notary showing that nothing is outstanding. That certificate is not always requested, and sometimes it predates the latest settlement. We also ask as standard for the most recent IBI bill and the minutes of the last meetings — because those also show whether a derrama has been approved that has not yet been carried out.

2. What stands there is not always what is registered

A covered terrace, an extended bedroom, a pool, a roof solarium: a great deal has been added along the Spanish coast over the years. Far from all of it was done with a permit, and even less of it was entered in the land registry.

As long as you live there, you usually notice nothing. It becomes a problem at three moments: when you want to sell and your buyer needs financing, when you want to take out a mortgage yourself, and when there is damage and the insurer establishes that the damaged part does not appear in the deed.

Regularising is usually possible, but it costs time and money: an architect's certificate, registration of the obra nueva antigua, sometimes a municipal procedure. Knowing in advance is considerably cheaper than finding out afterwards.

3. Buy from a non-resident and the withholding duty is yours

This is the most technical of the five, and the one that can hit hardest. If the seller is not tax resident in Spain, the buyer must withhold three percent of the purchase price and pay it to the Spanish tax office within one month of the deed. It is an advance against the tax the seller owes on the gain.

If that does not happen, the claim stays attached to the property. The tax office can then recover somebody else's tax debt against your home. On a property of €250,000 that means €7,500 that has to be correctly withheld and declared.

In a properly guided purchase the gestoría handles this automatically. But it is precisely in quick, informally arranged purchases between private individuals that this step gets forgotten — and then it is the buyer's turn.

4. You pay tax even if you let nothing

If you are not tax resident in Spain and you use the property yourself, the Spanish tax office assumes a deemed income. You are taxed as though the property earns you something, even if it stands empty eleven months a year.

The base is a percentage of the cadastral value — 1.1 percent if that value has been revised recently, otherwise 2 percent. On that you pay non-resident income tax: 19 percent for residents of the EU, Iceland and Norway, 24 percent for everyone else. The return goes through modelo 210 and has to be filed again every year.

The amounts are rarely large, but they do come back every year, and the tax office does not forget. Anyone who has declared nothing for years still gets the bill on sale, with interest and a penalty. If you do let the property, different rules apply — see our article on VAT on tourist letting.

5. You are not just buying a property, you are joining an association

With an apartment or a property in an urbanisation you automatically become a member of the comunidad de propietarios. That is not a service contract you can cancel, but a body you are part of.

What that means in practice only becomes clear after the first meeting. The statutes can determine what you may and may not do with your property: restricting short-term letting, regulating pets, making alterations to the façade or the terrace subject to approval. The financial health of the association also determines how often you can expect an extra levy.

An association with a funded reserve, an active administrator and deferred maintenance actually on the agenda is reassuring. An association where half the owners do not pay and maintenance has been postponed for years is a risk you buy along with the property, without it being reflected in the asking price.

And two small things that can grow large

The utilities. Transferring an existing contract is usually straightforward. But if the contract has been cancelled at some point, or the installation is old, the supplier will want a valid installation certificate and sometimes a habitation certificate. That can cost a few hundred euros and a couple of weeks — precisely when you have just collected the keys and would rather like to sleep there.

The cadastre. Registration at the land registry does not automatically carry through to the cadastre. If that link is not made, the IBI bill keeps landing on the previous owner's doormat for years. Unpaid — and as you read above, the property stands as security for it.

Why this rarely comes up beforehand

None of the above is a secret, and none of it is a specifically Spanish problem. It is simply the administrative reality of owning property in another country, with another language and other authorities.

That it still catches people out comes down to who does what. The selling agent's job is finished once the deed is signed; his brief was the sale. The notary checks the deed, not your whole situation. And the gestoría does exactly what was agreed, no more.

That is where a property finder differs: we earn nothing from the transaction itself, so we have no reason whatsoever to raise these subjects only after the signature. We would rather see an offer fall through than a buyer find out a year later.