The Property Is in One Country, the Owner in Another

Cross-border real estate law is the legal field that addresses an increasingly common reality: an individual or legal entity that maintains a real estate relationship with a country other than that of their habitual residence. The numbers are far from marginal. Between France and Spain alone, tens of thousands of French owners hold property in Catalonia, the Balearic Islands, the Valencian Community or Andalusia, and a growing number of Spaniards are investing in southwestern France. Each of these situations requires a legal approach that cannot be found in classic real estate law textbooks.

The first mistake many owners make is assuming that the operation is similar to one they would carry out in their own country. It is not. The basic rule of private international law in real estate matters is the lex rei sitae: the law applicable to the property is that of the place where it is located. But around this rule orbit issues governed by different laws: the effects of marriage on property, succession on death, contractual obligations, taxation. Four sets of rules can converge on a single transaction. That is why advice must be comprehensive, not piecemeal.

The Notary Is Not the Same on Both Sides of the Border

Latin notary systems exist in both Spain and France, but they operate very differently. The French notary plays a much more active role in negotiating and drafting the contract (compromis de vente), while the Spanish notary essentially intervenes to formalize as a public deed an agreement already closed between the parties. This difference, which seems technical, has an enormous practical impact: if a French client expects the Spanish notary to draft the contract as in France, the operation can come to a halt. Our role is to prepare the client and both notarial offices so that each one performs its function without surprises.

Taxation: the Chapter That Never Ends

When the property crosses a border, taxation crosses it twice. Once when acquiring (Transfer Tax or VAT, Stamp Duty, notarial and registry fees), again when holding the property (IBI property tax, non-resident income tax through Form 210, possible Form 720 obligation if the client lives in Spain and holds assets abroad), and a third time when transferring (municipal capital gains tax, capital gain, 3% withholding for non-resident sellers). On top of this, the double taxation conventions between both countries prevent the same income from being taxed twice but require a correct interpretation of each article. Poorly calibrated tax advice can turn a good investment into a silent loss.

Inheritance Rules Changed in 2015

EU Regulation 650/2012, fully applicable since August 17, 2015, has reshaped the European succession landscape. As a general rule, the law applicable to the inheritance is that of the country of habitual residence of the deceased at the time of death, but the testator may elect in their will that the law of their nationality apply (professio iuris). This choice, made or not made, determines decisive issues: who are the forced heirs, what share corresponds to the surviving spouse, whether succession agreements are valid. For an owner with property in another country, drafting a will without taking this regulation into account is one of the riskiest patrimonial decisions one can make today.

The Most Frequent Mistakes We See

In our daily practice we detect the same pitfalls: buying without verifying the urban planning status of the property (especially in coastal areas with irregular constructions), signing a deposit contract drafted by the seller’s real estate agency without negotiating the resolution clauses, not anticipating the 3% withholding when the buyer discovers that part of the price is retained by the tax authorities, failing to update the will after acquiring a property abroad, underestimating registry inscription deadlines. Each of these mistakes has a simple preventive solution when anticipated, and a considerable cost when discovered later.

How We Work on Each Case

Each operation begins with a free conversation in which we listen to the full situation: where the property is located, where the client lives, what objective they pursue, what assets already exist. From there we draft a work plan with deadlines, tasks and fixed fees. We do not bill by surprise. The client knows at all times what is being done, what stage the operation is at and what document needs to be signed next. This operational transparency is probably what clients value most when they come back for a second operation years later.

Let’s Talk About Your Situation

If you are considering buying a property outside your country, have inherited a property in another jurisdiction or already hold international real estate assets that you have not reviewed in years, scheduling a first consultation with our firm will allow you to understand in one hour everything you need to know before making decisions. Cross-border real estate law is not learned online: it requires experience, bicultural sensitivity and method. Let us put all three at your service.