Buying property in Spain is an exciting venture, but one of the most critical aspects you must consider is proper licensing. Without the correct property licenses, you could risk fines, legal trouble, or even losing your house. This guide will walk you through all the essential licenses in Spain, explain how to check that a property is fully compliant, and help you avoid common pitfalls, especially in towns, urbanizations, and rural areas.
Why Proper Licensing Is Critical
The Spanish legal system requires all properties to have proper licenses, such as the “Licence of First Occupation” or “Tourism License.” Failing to have these licenses means your property is considered illegal, and you could face legal action. This could range from hefty fines to, in extreme cases, the government reclaiming or demolishing your property. Buying an unlicensed home can result in a nightmare scenario, and it’s more common than you might think.
Key Licenses You Need to Have
Licence of First Occupation (Licencia de Primera Ocupación)
This is the initial license issued when a new property is completed. It certifies that the building has been constructed according to local building codes and is safe for living. Without this license, the property is illegal. It’s essential for obtaining utility services like water and electricity but DO NOT Assume becuase a property has services there is an LFO in place.
Generally speaking, it is NOT advisable to purchase a property if it is a new build or off-plan property and the developer cannot produce a Licence of First Occupation.
Without a Licence of First Occupation you will:-
- Not be able to contract utilities such as water, electricity, gas and telecommunications
- You will not be legally permitted to live in the property or rent it out
- You will not be able to get a mortgage loan on the property
- You will have a lot of trouble trying to sell the property.
The Licence of First Occupation generally needs to be renewed after 10 years, although in some regions it can be 5 or even 15 years. Once the LFO expires it is replaced with the Habitual Occupation Licence (Licencia de Ocupación Habitual)
NB: The Licence of First Occupation applies individually for stand alone properties but for properties on an urbanization it is the complete urbanization that is licenced rather than the individual properties.
Habitual Occupation Licence (Licencia de Ocupación Habitual)
This license certifies that the property is suitable for permanent residence. If you are buying a resale property you will want to see an Habitation Licence from the town hall, rather than an LFO (though it is basically the same thing).
The habitation license or certificate, which is sometimes referred to as a Licencia de Habitabilidad in Spanish, needs to be renewed every 10 years and is confirmation from the town hall that the property is habitable.
You will need to get a habitation certificate after the property is 10 years old and once the initial Licence of First Occupation has expired. If you are selling a property and the habitation certificate is less than 10 years old, you will not need to update it in order to complete.
A new purchaser will need to have a valid and up to date habitation certificate so that they can put the utilities in their name and make any future changes to the water or electricity contracts that may be required.
Licence for Additional Building Works (Licencia de Obras Mayores/Obras Menores)
If the property has been modified by added extra features like a pool, terrace, or extension, you’ll need either a Licencia de Obras Mayores (for significant works) or Licencia de Obras Menores (for smaller improvements). Failure to obtain these can make the property illegal.
The Difference Between Licence of First Occupation and Habitual Occupation Licence
Understanding the distinction between these two licenses is crucial when buying property in Spain:
Key Differences:
| Licence of First Occupation | Habitual Occupation Licence |
|---|---|
| Issued after new construction or major renovation | Issued for continued residential use in an already occupied property |
| One-time license | Renewable every few years (depends on local regulations) |
| Certifies initial compliance with building regulations | Ensures continued compliance with basic habitation standards |
| Needed to connect utilities and register new properties | Needed to transfer ownership or reconnect utilities in existing homes |
| Essential for new builds, major renovations, and legalizing old illegal constructions | Important for ongoing use and sale or rental of property |
Ensuring both licenses are in place is key to maintaining your property’s legal status and securing a safe living environment.
Licence Differences Between Towns, Urbanizations, and Rural Areas
- Towns typically have stricter licensing regulations due to higher density and more structured building laws.
- Urbanizations often have additional rules depending on the community regulations. Each urbanization might have its own governing board that imposes specific restrictions.
- Rural Properties can be the trickiest. Many properties in rural areas were built without permits, and licensing regulations vary significantly by region.
| Type of Property | Licences Required | Additional Considerations |
|---|---|---|
| Towns | Licence of First Occupation, Habitual Occupation | Strict enforcement |
| Urbanizations | Same as towns but may require community approval for changes | Additional community regulations |
| Rural | Dependent on regional laws, usually more relaxed, but risky if unlicensed | Risk of illegal construction |
Autonomous Community Differences
Each of Spain’s autonomous communities has slight variations in property licensing requirements. For example, Andalucía may have more relaxed rules for rural properties, while Catalonia is stricter, especially for urban properties. Make sure you consult with a local lawyer who understands the regional differences.
How to Check the Correct Licenses Are in Place
Before you buy any property, follow these steps to ensure the correct licenses are in place:
- Request the seller’s documentation: Ask for copies of the property’s First Occupation License, Occupation License, and any building permits.
- Visit the town hall (ayuntamiento): They can confirm whether all permits are up-to-date and that no illegal construction exists.
- Hire a surveyor (arquitecto técnico): This is not mandatory, but a qualified surveyor or lawyer can verify that all works are compliant with local laws.
What to Do If Licenses Are Not in Place
If the property lacks the necessary licenses, it doesn’t necessarily mean you should abandon the purchase, but you need to approach with caution.
- Negotiate with the seller: Ask them to obtain the necessary licenses before completing the purchase.
- Retroactive legalization: In some cases, it is possible to legalize the property after the fact. This process can be complex and costly, involving architects and possibly fines.
- Walk away: If the risks are too high, it’s better to find a fully compliant property.
Special Focus: Tourism License (Licencia de Vivienda Turística)
If you’re planning to rent your property to tourists, you will need a Tourism License (Licencia de Vivienda Turística). This license allows you to legally rent out your property for short-term stays.
The application process includes:
- Submitting an application to the local tourism board.
- Ensuring the property meets all safety standards (fire alarms, evacuation routes).
- Providing proof of insurance and licencing for the property.
Each autonomous community has its own specific regulations regarding short-term rentals, so it’s essential to check local rules. For instance, Mallorca and Barcelona have stricter policies due to concerns about over-tourism.
Professionals Involved
- Real Estate Lawyer (Abogado especializado en inmuebles): Essential for reviewing contracts and ensuring legality.
- Architect or Surveyor (Arquitecto or Aparejador): Not mandatory but recommended to inspect the property and verify licenses.
- Gestor: A gestor can assist in handling legal and administrative paperwork, but they are not required by law.
Common Scams: Illegal or Unlicensed Real Estate Sales
In Spain, many unsuspecting buyers fall victim to scams involving unlicensed or illegally constructed properties. Sellers may cut corners or attempt to sell properties that don’t comply with regional laws, especially in rural areas or properties with additional constructions like pools or extensions.
How to Avoid Getting Scammed
Check with the local town hall (ayuntamiento) to ensure the property is registered properly and that all building works are legal.
Hire a qualified lawyer (abogado especializado en inmuebles) who specializes in Spanish real estate law.
Request proof of licenses from the seller before making an offer. Ask for the Licencia de Primera Ocupación (Licence of First Occupation) and other permits.
NB: Unscrupulous Real Estate Agents will often tell you that not having a licence isn’t an issue and is easy to get in retrospect. This is unlikely to be the full story as if it was easy then the seller would make sure the licences where in place so they could get a better price and not running the risk of losing the sale.
Conclusion
Understanding and securing the correct property licenses is critical when purchasing real estate in Spain. From the First Occupation License to the Tourism License, each document ensures that your property is legally recognized and safe to live in.
Working with the right professionals, like real estate lawyers and surveyors, will help you navigate the often complex and region-specific Spanish property laws, and avoid the pitfalls of buying illegal or unlicensed real estate.
