Rural Properties and Rural Land

Moving inland no longer means complete isolation. Over the last few years, more and more families have been attracted to the prospect of setting up home away from the hustle and bustle of the busy coast and purchasing a property in a truly traditional Spanish area. It is a common misconception that buying a property in a rural location or in the campo (countryside) means buying a finca (literally translated means farm – but generally refers to a small country property). There are in fact a wide variety of properties available inland ranging from the traditional large country homes through to modern villas and new built urbanisations.
 

Before you even start your search for a property, think about just how isolated you want to be. Just inland from the coast you will find more sparsely settled areas which offer the advantages of rural living with all the conveniences of modern society just a short drive away. The further inland you go, the more isolated you will be and the percentage of other foreign inhabitants will fall. If you have a young family you will need to take into consideration for example if there are other children nearby for them to interact with, how far away their school is and will you be constantly ferrying them up and down the country roads to friends houses or after school activities? Think about how far you are prepared to be from your nearest shop and if you need to work how long it will take you to get there and back.

One of the main benefits for those relocating to a rural area is that they tend to be much more integrated into their local Spanish communities than their counterparts on the coast. Getting a real taste of Spanish life is what relocating is all about for many families. Getting to know your neighbours, experiencing the local traditions and customs first hand and sending their children to the local school all helps with adjusting to a new life in a new country.

Rural Property Guidelines
When buying inland, as well as following the normal purchase process for buying a property, . .

• Hire a lawyer from the area you are thinking of purchasing a property. There are so many local laws in Spain, that if you hire someone from the local community they are more likely to be informed about any quirky regional legalities.
  
• Ensure the property has correct and valid title deeds and the boundaries that the property covers are specified. Often with older properties there can be some confusion over who actually owns the property, for example, the family may not have informed the Town Hall that a senior family member has deceased and there may be no proof of the title at all. In this instance, the purchaser pays for the first registration.
  
• Check the amount of capital gains tax you will have to pay as it varies from region to region.
  
• Check whether the utilities are installed or ever have been. Is there electricity? Will you be able to connect to the mains supply? If not, will you be happy with solar panels? Is there water? If it’s provided by a well, is there enough for your needs?
  
• Check accessibility. Often with a rural property someone owns the land around the property so you may find restrictions in parking or even walking on the land that surrounds your house.
  
• Research into what is planned for the future with regards to surrounding plots

Buying Land and then Building
More and more non-residents considering a property purchase in Spain look for land to build their own dream villa. Increasingly Spanish real estate agents include plots of land in their property for sale. Given the rise in Spanish property prices over the past decade, buying land in Spain to then build your Spanish home is often much cheaper than buying a Spanish villa with a large garden (although not necessarily as cheap as many newcomers to the Spanish property market hope).

But buying land to build is just as complicated as buying a house in Spain. Spanish land laws are complex, and it is very important to choose the right plot of land in order to avoid future problems such as finding out that the land you have bought has no planning permission and so you can't build your house there after all. Or risking a possible repossesion order such as that faced by unfortunate property owners in the Costa Blanca.

Find a good Spanish lawyer before you put a down payment down on a land sale in Spain. This is very important, even more so than when you purchase bricks and mortar, because the lawyer will help you check the land use status, sort out taxes, get a building permit, contract the building, all of which are vital steps towards building your Spanish home.

You will need to find out whether the land you want to buy has got or will be given building permission (permiso or licencia de obra) from the local town hall. Building permits cost about 4% of the estimated construction costs, depending on the figure set by the Spanish local authorities. To find this out, your lawyer will need to go on your behalf or with you to the urbanismo department of your local town hall to have a look at the Plan General de Ordenación Urbana (Urban Plan) which will state whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar. If this is the case you will be obliged to allow public access. Also, check future plans. See what, if any, restrictions the surrounding land is subject to and make sure there are no plans for a new motorway or a shopping center to be built nearby.

Do insist on getting your plot surveyed to measure the exact number of square metres. Find a topografo (land surveyor) and also check the castastro (land register) to make sure that the official measurements and boundaries match what your own land surveyor has measured. Do check the owners registry (Registro de la Propiedad), just to make sure that the seller is the only owner of the plot you want to buy. It is not uncommon in Spain for ownership of land to have been inherited by several people, so make sure that this is not the case.

Check the local building norms. Some areas put strict restrictions on the number of floors you can build, whether or not you can build walls around the property and, if you buy a plot within an urbanization, even the colour of exterior walls or the number or balconies.

Once you have bought your land, you will need to find an architect to design the house and have the plans approved and get planning permission. Any house built in Spain must comply with local construction norms and plans must be designed and signed by a qualified architect. He or she will charge anything from 6% (minimum) to 10% of the overall building cost.

Building materials will be described in detail in the memoria de calidades and should be agreed between you and the architect before you meet with the aparejador and the builders. It is important to detail all building materials in the memoria, because then the builders can be held accountable for any omissions or errors. The aparejador is the professional who oversees the building process, making sure that the plans are respected and the materials described in the original project are used. He usually charges from 1 to 2 percent of the overall building cost. The architect might be able to recommend an aparejador.

Then you will have to find a reputable building company . . .

Rural Development - Plots
Until recently property developers in coastal areas and private buyers in the countryside have had it all their own way. Around Marbella, developers obtained special dispensations from the Town Hall that often allowed them to build a greater density than regulations permitted. In other cases, the builders simply went ahead and constructed larger projects than were authorised in their licences. In rural inland areas, people bought a small piece of country land and built without any permit at all. The fines eventually levied on them were so small that this became almost the ‘normal’ way of building in the country. Once the fine was paid, the Town Hall cleared the way for making the new construction legal and properly registered.

This happy-go-lucky state of affairs suited everyone. Building was booming in Marbella. The workers all had jobs. The builders and estate agents were recording healthy profits. The Town Hall was receiving money from building licences. In the country, local authorities were pleased to have new residents spending their money in the shops and paying their taxes, too. And it looks like both Europeans and Spaniards from chilly northern cities will keep coming forever to find a place in the sun. It couldn’t last forever. The rural municipalities realised that their open countryside was turning into a sort of suburbia, without proper services. When Marbella authorities announced a town plan that called for tripling the population in the next eight years, fears grew that a mass of concrete would kill the goose that lays the golden eggs.

The response came from above, from the Andalucian regional government, which has acted to exert more effective control, not only on the Costa del Sol, but throughout the eight provinces of Andalucia, where similar situations are forming.

The Andalucia Land Law
The Andalucian Ley de Suelo, or Land Law, which went into effect early in 2003, aims to protect the countryside from uncontrolled development and to ensure that urban building follows the rules. Fines have been increased from between 1 and 5 per cent of construction costs to 12 per cent of market value. Even suppliers such as water and electricity companies can be fined for working on sites that don't meet the requirements of the law.

In rural areas, the law puts restrictions on the type of structures that can be built and allows building on rural properties only if they meet certain size requirements. It prohibits the construction of single-family homes on land categorised as rural unless the building is “justifiably linked” to agricultural, forestland or livestock activities. No building is permitted on land unless for agriculture or residential tourism. New houses can be constructed on the site of existing ruins as long as there is a roof, and only a dwelling house for the farmer is permitted.

Legal challenges have been brought against the law by Torremolinos council and others on the Costa del Sol have indicated they will follow suit.

Key Points

• First, the Andalucian regional government, the Junta de Andalucía, is the supreme building authority. It has the last word in land use and the issue of building licences, overriding the authority of the individual Town Halls. The Junta must approve the development plans of each municipality and it can knock down buildings with permits issued by a Town Hall. In Marbella, permits for more than 2,000 units were rejected and thousands more are under study.
   
• Under the previous law, a construction with no building licence at all was fined at one to five per cent of the cost of construction. This fine was actually less than the cost of a building permit in many cases. The new law makes the minimum fine 12.5 per cent of the market value of the building. In real terms, authorities calculate this is an increase of 30 times over the old fine, as the market value is much higher than the construction cost. This gives the new law some teeth.
   
• Under the old law, police were charged with checking up on building projects that were blocked by court orders. In some cases, the builders stopped briefly and then continued to build, simply ignoring the court order. They got away with this because the local police could report the situation to the authorities, but they were unable to issue fines to back up the order. The builders dragged out their court cases and finished their building in the meantime. They reasoned that the municipal authorities would choose to legalise it for a small fine, just like the rural construction. Generally they were right. Under the new law, the first fine for defying the court order is €6,000 plus 10 per cent of the value of the construction for every 10 days the work continues. Furthermore, the Town Halls can give the builder two months to apply for legalisation of his project. With a failure to do so, they can levy fines of 10 per cent of the value of construction every month missed, up to a maximum of four years. Under the new law, even the building suppliers can be fined. This includes the water and electric companies who supply a wildcat builder.
   
• The law also acts to protect rural areas by requiring anyone building on rural land to show that they are using the land for agricultural purposes. These include farming, stock raising or forestry projects. Buyers may no longer build on even a vast tract of rural land or mountain forest unless they are farmers or stock raisers themselves. The new law reserves all rural land for agriculture, forestry or stock raising. Houses are not permitted, except for the operator’s dwelling. If you want to build a house in the middle of your finca of, say, 500,000 square metres, the law requires you to show that you are registered with the tax office as a farmer or a sheep-raiser, for example. You might have to demonstrate that 50 per cent of your income for the last four years comes from these agricultural activities to justify this.
   
• However, there are not yet any set rules to justify your agricultural activity, which is confusing. This is because most Spanish laws come in two parts. The first and basic part is the law itself. The second part is the Reglamento, the Regulations, which spell out exactly how the law will be applied. More than one year after the passage of the Andalucian land law, these regulations have not yet been published, and Town Halls are complaining. Furthermore, they are not likely to be passed until the new Andalucian legislature in Seville gets into operation after the March 2005 elections.
  

Beware!
Some rural Town Halls are continuing to issue a few building permits on rural land and a few buyers, either because they are ignorant of the law or because they are willing to take a chance, are going ahead with construction. Be warned. The significant fact so far is that the Andalucian land authorities have not approved even one rural permit since the passage of the law more than a year ago. On the other hand, they are moving very slowly and have rejected very few permits, leaving the holders in limbo. Eventually, when the Town Plans are sorted out and the Regulations for the Land Law are enacted, some of these permits will be approved and others will not.

Country Home Value Implications
A recent study, by the property assessment company Tasaciones Andaluzas (Tasa), concludes that the regional Land Law (Ley del Suelo) " . . greatly limits the ability to construct buildings for recreational and residential use’ in rural areas . . "

The result of the restrictions created by the Land Law, according to the Tasa study, is that country homes – or land where they can legally be built – are a limited commodity, meaning owners of existing homes can demand ever greater prices. In some areas, especially the Guadalhorce Valley, the Ronda mountains and the Axarquía, the cost of a country home has increased and in some cases nearly tripled due to the tightened land-use regulations.

Rural Land Implications
While the Land Law has the positive affect of protecting rural areas from overdevelopment, its affect on real estate in inland areas has put the brakes on a trend that had been an economic boon for many villagers who owned unprofitable agricultural land. Buyers from the UK, Germany or other European countries, willing to pay relatively large sums for the land as vacation or retirement property, were viewed by many small farmers as an opportunity to cash out. That option – as well as the economic engine represented by the influx of affluent foreigners to the area – is now reduced by the tougher land-use restrictions.

Rural Developments Implications
Another effect of the new law is that many incoming buyers, and they do indeed continue to arrive, are now looking at building plots on new estates going up in country areas, instead of at rural and undeveloped land. These developments are perfectly legal because they are on land classified as ‘buildable’ and they offer full infrastructure in pleasant country areas.