To buy a building plot in Spain is becoming more popular for people who want to decide the design of their dream home. Before this, it is important to take into consideration different factors that can make the final price of your property in Spain go up, like price, construction material, workers, licenses and contracts not in order…

Cost of a building plot
The price of the building plot varies depending on the location, views, the standard of the plot (urban or not, with development plans), and the normal factors that have influence on the price of a property in Spain.

Plots in exclusive areas near the sea or golf course will cost about 200-700EUR per square meter and in other tourist areas about 100-400EUR per square meter. But the price going inland is only about 10-150EUR per square meter, if you want or don’t mind to build your property far from tourist demanded areas.
The cost of the building plot will increase a 10% (transfer tax, registration of the title deed and notary fees) and more with a Spanish mortgage loan.

Cost of Building a property in Spain
The cost of building a property depends on the quality and type of materials used, conditions of the place, design and type of property. The final price can be a very different price depending on the constructor too and it is recommendable to get several offers.

A standard quality villa with garage and pool (200 m²) will cost about 500 - 700EUR per square constructed meter.

Other Costs
Other costs involve VAT (7%), licenses and architect fees, paper work and legal assistance, connections to electricity, water and telephone, registration of the new property etc.

After the property in spain is built, there will be annual costs like property taxes, community fees, insurance etc. (buying property in Spain) to which you’ll have to add the mortgage costs.

Spanish mortgage
The process of getting a Spanish mortgage to buy a building plot and build your own property, is more difficult than for a new or second hand property in Spain.

If you get a Spanish mortgage, there is no security for the bank, except the building plot value, until the property is finished and valued.

Before going to the bank for a Spanish mortgage, you should prepare all the documentation.

The necessary documents are: title deed of the building plot, licenses necessary for the construction of the property in spain, the contract with the builder and the architects design approved by the town hall.

If you prefer to buy a building plot and design your own house, you should ask a lawyer, in advance, to get information about the process of buying the building plot, building permits, architect and construction plan of your future Spanish property.

Building plot location
Is the plot located in an area where building is allowed or not? This is the first question before buying the building plot.

Building plots in Spain are classified as:

• Suelo Urbano: Urban Land. There are Development plans, road access, water supply, waters evacuation and provision of electrical energy or to be consolidated by the construction. You can buy a building plot for your future Spanish property there.
• Zonas verdes: Green zones, where no building can take place.
• Suelo Rústico: Country land, rural land; There are not development plans in place, but when there are, many restrictions apply, like for example: minimum 10.000 m² (land with water) or 30.000 m² (land classified dry, without water). Be carefully when a seller tells you that it is possible to build your Spanish property in less meters; if it’s not allowed on the building plot, the municipal regulations can order the demolition of your Spanish property.

Our advice before buying a building plot and ask for a Spanish mortgage loan is to visit the Urbanismo Department at the Town Hall and ask for the regulations applied in the area you are interested to build your Spanish property, information about what is permitted or prohibited on the building plot, if it is possible to get a building permit for your Spanish property, restrictions towards the size (there are rules limiting building size in relation to the building plot size), the height, to make sure that you can build the type of Spanish property you are planning.

If you don’t speak fluent Spanish, we advise you to go with your lawyer. He will help you to understand the Town Plan (PGOU: Plan General de Ordenación Urbana), and the building regulations for a Spanish property on a building plot, building land and country land.

When the building plot is in the country, you should check at the Town Hall (Ayuntamiento), where the Spanish property is registered, to check if there are encumbrances over the property or not

Steps for building a Spanish property

1- Go to the Catastro Local Office and check the information about the building plot in order to be sure that the description in the deed is the same as the description in the Official Registration in order to you have the right the Spanish property you’ve always dreamed of.

The Catastro (different from the Property Registry) is an administrative institution in which all real estates are registered (land, building plot etc.) along with their physical, legal (class, age, location, titleholder and use) and economic (cadastral value) characteristics. Cadastral information can be requested at the Territorial Cadastre Office in the province where the Spanish property is located or may be obtained by mail.

More info.: Catastro

2- Property Registry: they inform to you if the building plot you want to buy for your Spanish property is free of charges or not.

3- Visit the Town Hall and ask for the Plan Parcial (if you are buying a building plot located within an urbanization), in order to know the developments planned for the area where your building plot is located (roads, water supply…), and if the urbanization on the building plot is registered and legal i.e. if you have the right to build your Spanish property.

4– After taking the decision of buying the building plot, you may get a Spanish mortgage loan. Then you must sign the purchase contract of thebuilding plot for the construction of your Spanish property in presence of the notary.

5- Before starting with the construction of the property, you will need a “licencia de obras”. This building permit is given after the architect has drawn the “anteproyecto”or basic plan of the Spanish property. You can find a good architect by asking around or going to the official “Colegio de Arquitectos”.

Fees are standard and regulated by the Colegio de Arquitectos.

An aparejador will supervise the building of your Spanish property and ensure that it is properly constructed. He will go the building plot and visit the place sometimes to check on things, and signs the certificate you need to obtain the “Certificado Final de Obra” (Construction Completion certificate) and the “Licencia de Primera Ocupación” (certificate of first occupancy).

6- You have to think about the house design, materials, size, number of rooms… etc of the Spanish property you’re dreaming of for preparing the “Memoria de Calidades” with the architect which includes all the details, materials used for the construction on the architectural plan. This document is part of the Building Contract you will sign with the builder.

7- The builder will check with you the prices of the material described in the Memoria, according the final prices of the building, which can be increased if you make changes later. To protect yourself always make sure that your lawyer reviews the contract proposed by the builder. The builder will always try to protect his interests and if you do not have experience with these types of contracts of construction on a building plot, you could discover at the end that your property can be finished with less quality than expected or takes more time than promised by the builder.

8- Property in Spain has to be registered at the Property Registry, because your deed only contains the building plot registration. Before, you should make a “declaración de obra nueva“(declaration of new work) in order that your Spanish property appears in the deed. The building permit, the certificate of building completion and the certificate of first occupancy will also be required.

9- Upon completion of this process you are finally the legal owner of a property in Spain and you should pay Income tax and Wealth tax on this property.