Spanish Property Scams: How to Protect Yourself

Why This Article Exists

Let us be clear from the start: the overwhelming majority of property transactions in Spain are completely safe. Spain has a robust legal system, a public notary system that provides strong buyer protection, and a land registry that records ownership transparently. Millions of foreigners have bought property in Spain without any problems.

However, problems do occur — and they are almost always preventable. The buyers who get into trouble are typically those who skip legal representation, rush into deposits without proper checks, or deal with unverified intermediaries. This article covers the most common issues we have seen (or been asked to help resolve) over our years working in Spanish property, and exactly how to avoid each one.

Illegal Builds

This is the most common structural problem in Spanish property, particularly in rural and semi-rural areas. During the construction boom of the 1990s and early 2000s, thousands of properties were built without proper licences, on rural land not zoned for construction, or with extensions and pools that were never declared.

The risk: If a property (or part of it) was built without a licence, the local authority can order its demolition — even years after construction. You, as the new owner, inherit this liability. Common examples include swimming pools built without licence, enclosed terraces or conservatories added without planning permission, and entire houses built on non-urban (rústico) land without the proper change-of-use permit.

How to check:

• Your lawyer should obtain a nota simple from the land registry, which shows the registered size and description of the property. If the actual property is significantly larger than what is registered, something was built without being declared.
• Your lawyer should also check with the local urbanismo (planning) department to verify the property’s planning status and whether any enforcement proceedings are pending.
• For rural properties, check the PGOU (Plan General de Ordenación Urbana) to confirm the land is classified as urban or urbanisable, not rural/protected.
• Request a copy of the original building licence (licencia de obra) for the property.

This is predominantly a risk with older resale properties in rural areas and small municipalities. New-build developments from licensed developers are very unlikely to have these issues, as they go through rigorous planning approval before construction begins.

Under-Declaring the Price

This practice has become less common but still exists. The seller asks the buyer to declare a lower purchase price in the escritura (title deed) than the amount actually paid, with the difference paid “under the table” in cash. The seller’s motivation is to reduce their capital gains tax liability.

The risk to you as buyer:

• When you eventually sell, your declared purchase price is lower, meaning your taxable capital gain is artificially inflated.
• The Hacienda (tax authority) is increasingly sophisticated at detecting under-declaration, using reference values and algorithm-based checks. If caught, both parties face penalties.
• You have no legal proof of the cash payment, so if anything goes wrong, you cannot recover the undeclared portion.

The rule: Always declare the full, real purchase price. The modest saving on transfer tax is not worth the future risk. Your lawyer should insist on this — if they don’t, find a different lawyer.

Deposit Theft

The scenario: you find a property, agree a price, and pay a “reservation deposit” of €3,000–€10,000 directly to the estate agent or seller. The agent or seller then disappears, or the property turns out to already be sold, or the agent refuses to return the deposit when the deal falls through.

How to protect yourself:

• Never pay a deposit directly to an estate agent’s personal bank account. Pay only into a lawyer’s client account (cuenta de cliente) or the agent’s registered company account.
• Ensure you receive a signed reservation document specifying the refund conditions — particularly what happens if the buyer’s legal checks reveal problems.
• Have your lawyer review any document before you sign it or pay any money.
• Use a bank transfer (not cash) so there is a traceable payment record.

Identity Fraud

Rare but serious: criminals impersonate property owners using forged documents and stolen NIE numbers to “sell” properties they do not own. The buyer pays the deposit or even completes the purchase, only to discover the real owner had no knowledge of the sale.

How your lawyer prevents this:

• The nota simple confirms the registered owner. Your lawyer verifies the seller’s identity documents match the nota simple.
• At the notary signing, the notary independently verifies both parties’ identities against official databases. This is a critical legal safeguard.
• If the seller is using a power of attorney (common when the owner is abroad), your lawyer should verify the original poder notarial and check it has not been revoked.

Fake or Unlicensed Agents

Spain’s real estate industry is less regulated than in some countries — there is no national requirement for estate agents to hold a licence (though some autonomous communities, including Catalonia, do require one). This means virtually anyone can set up as a property agent.

Red flags:

• The agent has no physical office — only a mobile phone and a website
• The agent asks for upfront fees before showing properties
• The agent is not registered with API (Agentes de la Propiedad Inmobiliaria) or GIPE (Gestión Inmobiliaria Profesional de España)
• The agent pressures you to skip legal checks or use “their” lawyer
• The agent’s company is not registered in the Registro Mercantil (commercial registry)

How to verify: Ask for the agent’s CIF (company tax number) and check it against the Registro Mercantil. Look for API membership certificates in their office. Search online reviews and forum discussions. Visit the physical office. A legitimate agent will have no problem providing these details.

How to Protect Yourself: 5 Rules

Follow these five rules and you will avoid virtually every problem described above:

Red Flags Checklist

If any of these apply, stop and consult your lawyer before proceeding:

For a complete walkthrough of the safe buying process, read our complete guide to buying property in Spain. For advice on renovation checks, see our renovation guide. And for information on selling, including CGT implications, see selling property in Spain.