Building your own home
Cost, architects, contracts and guarantees
Spain - Property
If you want to be far from the madding crowd, you can buy a plot of land (parcela) and have an individual architect-designed house built to your own design and specifications or to a standard design provided by a builder.
However, building a home isn’t recommended for the timid. Spanish red tape and the often eccentric ways of doing business can make building your own home a nightmare and it’s fraught with problems. Nevertheless, there are many excellent builders who will build an individually-designed house on your plot of land or will sell you a plot and build a house chosen from a range of standard designs.
When you’re looking at a particular area, you should check the medium-term infrastructure plans for that area, with the regional and national authorities. It’s worth remembering that the road and rail infrastructure in Spain needs upgrading in many areas and many new road and railway projects are in the pipeline. This could mean that, although a quiet rural plot may seem miles from anywhere today, there could be plans for a motorway passing along the boundaries within the next five to ten years.
This is the case, for example, with the toll-motorway planned from Torremolinos to Las Pedrizas in Malaga, which will run through a large section of currently unspoilt countryside. Check plans for airports as well and find out where flight paths will run. An airport is currently under construction in Castellón (Costa del Azahar) and others planned for Antequera (Malaga, 2010) and Corvera (Murcia, 2009). Unfortunately many long-term plans are unavailable to the public or they may change, but information about infrastructure development for the next ten years is usually available.
You must take the same care when buying land as you would when buying a home. The most important point is to ensure that it has been approved for building (land classified as a finca urbana can usually be built on) and that the plot is large enough and suitable for the house you plan to build. This is done by obtaining a certificate (certificado de situación urbanística) from the local town hall. It may also be possible to build on agricultural land (finca rústica), but there are strict limits on plot and building sizes (the minimum plot that can be built on is usually 3,000m2 and may be as high as 10,000m2 or even 15,000m2 as in the Balearics). There are also limitations on the type of building allowed in some regions. If the plot is part of an urbanisation, the contract must state that the plan has been approved and give the date and authority. You can obtain this information (informe urbanístico) from the local town hall.
Beware of Spanish building regulations
Never assume that you will be able to build the same sort of house as your neighbours, as regulations vary according to the situation and type of plot or regulations may have changed since the property was built. Some plots are unsuitable for building, as they’re too steep or require prohibitively expensive foundations. It’s prudent to consult an architect who will be able to tell you whether the plot is suitable for construction and if you will need costly retaining walls or foundations. You should also have a land survey, which costs from €1,800 to €4,200, before you commit yourself to a purchase. A survey can also check the boundaries (rural plots commonly have more or less land than officially stated) and water rights. Also check that there aren’t any restrictions such as high-tension electricity lines, water pipes or rights of way that may restrict building. It’s advisable to consider the access to a plot if this isn’t along a surfaced road. Rainfall in winter is often torrential and many tracks turn into impassable mud and some are even washed away completely.
Before you buy land, particularly in rural areas, you should take comprehensive advice from a professional (preferably a lawyer) who should thoroughly investigate the conditions and regulations affecting the land. Never believe an owner or estate agent keen to sell you a plot who says there will be ‘no problem’ getting planning permission. All too often, foreign buyers have found themselves the proud owners of a rustic plot they cannot build on! If possible, always make obtaining building approval a condition of the purchase of land.
The cost of providing services to a property in a remote rural area may be prohibitively expensive and it must have a reliable water supply. If you don’t have mains water and must rely on other sources such as wells, you should make sure that the supply is adequate for your needs. Bear in mind that drought is common in most of southern Spain where it doesn’t usually rain from the end of May to September. Always get confirmation in writing from the local town hall that land can be built on and has been approved for road access.
Ensuring a building licence in Spain
Before buying land for building, ensure that the purchase contract is dependent on obtaining the necessary building licence (licencia de obra). Obtain a receipt showing that the plot is correctly presented in the property register (registro de la propiedad) and check for yourself that the correct planning permission has been obtained (don’t simply leave it to the builder). If planning permission is flawed you may need to pay extra to improve the local infrastructure or the property may even have to be demolished! Note also that it can take a long time to obtain planning permission.
Most builders offer package deals that include the land and the cost of building a home. However, it isn’t always advisable to buy the building plot from the builder who’s going to build your home and you should shop around and compare separate land and building costs. If you do decide to buy a package deal from a builder, you must insist on separate contracts for the land and the building and obtain the title deed for the land before signing a building contract. If you’re having a home built on an existing urbanisation, you must ensure that the urbanisation has been approved, as some are illegal.
The cost of land varies considerably depending on the area, e.g. from around €50 to €300 upwards per square metre (m2), and has escalated sharply in recent years in some areas, fuelled by speculators. However, in rural areas agricultural land can be exceedingly cheap, costing as little as a few euros per square metre.
Land usually represents as much as half the cost of building a home, although it’s still possible in many areas to buy a plot of land and build a bigger and better home for less than the cost of a resale property. Building your own home allows you not only to design your home, but to ensure that the quality of materials and workmanship are first class. Building costs range from around €700 to €1,500 (or more) per square metre in resort areas, depending on the quality and the area.
However, you should add an extra 10 to 15 per cent to the estimated price, as the cost of building a house is always more expensive than originally planned. Note, that labour costs may be considerably higher if your plot is situated in a remote area where you must also pay extra for transportation of materials. Value added tax (IVA) of 16 per cent is payable on building land (terreno urbanizable) and 7 per cent on building costs.
If you want a swimming pool or a garage built, it’s advisable to have it constructed at the same time as the house, when IVA is 7 per cent; if they’re constructed separately, IVA is 16 per cent.
Finding an architect & builder in Spain
When looking for an architect and builder it’s advisable to obtain recommendations from local people you can trust, e.g. a bank manager, estate agent, lawyer, notario, or neighbours and friends. Note, however, that estate agents or other professionals aren’t always the best people to ask, as they may receive a commission. You can also obtain valuable information from expatriates in local bars and from owners of properties in an area that you particularly like.
Many Spanish architects speak English and there are also architects from other EU countries working in the main resort areas. Architects’ fees are usually calculated as a percentage of the total costs of the work, usually between 5 and 10 per cent, which doesn’t encourage them to cut costs. However, there are no longer mandatory minimum fees for architects and you may be able to negotiate a good deal.
A good architect should be able to recommend a number of reliable builders, but you should also do your own research, as the most important consideration when choosing a new home is the reputation (and financial standing) of the builder. However, you should be wary of an architect with his ‘own’ builder (or a builder with his own architect), as it’s the architect’s job to ensure that the builder does his work according to the plans and specifications, so you don’t want their relationship to be too cosy.
Inspect other homes the builder has built and check with the owners as to what problems they’ve had and whether they’re satisfied. Building standards in Spain vary considerably and you shouldn’t assume that the lowest offer is the best value. Your best insurance when building a property is the reputation of the builder and his liquidity.
It’s important that the builder provides a ‘termination’ guarantee (backed by a bank or insurance company) to cover you in the event that he goes bust before completing the property and its infrastructure, which must be specified in the contract.
If you want a house built exactly to your specifications, you must personally supervise it every step of the way or employ an architectural engineer or technical architect (aparejador) to do it for you. Without close supervision it’s highly likely that your instructions won’t be followed. Around 70 per cent of an architect’s fees are payable when a building is started, the balance becoming due upon completion when the ‘certificate of new work’ (certificado de fin de obra nueva), the ‘licence for the first occupation’ (licencia de primera ocupación) and the declaration that the house is habitable (cédula de habitabilidad) have been issued by the town hall or regional government.
You should obtain written quotations (presupuestos) from a number of builders before signing a contract. One of the most important features of a home in Spain must be good insulation (against heat and cold) and protection against humidity.
The contract must include a detailed building description (memoria de calidades) and a list of the materials to be used (with references to the architect’s plans); the exact location of the building on the plot; the building and payment schedule, which must be made in stages according to building progress; a penalty clause for late completion; the retention of a percentage (e.g. 5 to 10 per cent) of the building costs as a guarantee against defects; and how disputes will be settled. It may be difficult or impossible to get the builder to accept a penalty clause for late completion, as buildings are rarely completed on time.
Ensure that the contract includes all costs, including the architect’s fees (unless contracted separately); landscaping (if applicable); all permits and licences (including the costs of land segregation, the declaration of new building, and the horizontal division for a community property) and the connection of utilities (water, electricity, gas, etc.) to the house, not just to the building site. The only extra is usually the cost of electricity and water meters.
Owners are also liable for a ‘tax on construction, installations and work’ (impuesto sobre construcciones, instalaciones y obras), which is levied on all work requiring a municipal licence. The tax ranges from 2 to 4 per cent of the cost of the work and may be payable when the local authorities issue the building licence.
Before accepting a quotation, it’s advisable to have it checked by a building consultant to confirm that it’s a fair deal. You should check whether the quotation (which must include IVA at 7 per cent) is an estimate or a fixed price, as sometimes the cost can escalate wildly due to contract clauses and changes made during building work. It’s vital to have a contract checked by a lawyer, as building contracts are often heavily biased in the builder’s favour and give clients very few rights.
Spanish law requires a builder to guarantee his work against structural defects for ten years (15 years if the builder failed to comply with specific conditions in the contract) and an architect is also responsible for ten years for defects due to poor supervision, incorrect instructions given to the builder, or problems caused by poor foundations, e.g. subsidence. It isn’t uncommon to have problems during construction, particularly regarding material defects.
If you experience problems you must usually be extremely patient, but persistent, in order to obtain satisfaction. You should have a completed building checked by a structural surveyor for defects and a report drawn up, and if there are any defects, he should determine exactly who was responsible for them.
This article is an extract from Buying a home in Spain. Click here to get a copy now.
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