In Spain, land is classified in three manners. Urbano is land that is ready for urbanization (construction). Zonas Verdes is land that is green zone and cannot be built on at all. Rustico is rustic or agricultural land. The form of land that you choose comes with different restrictions, Rustico is one of the more challenging classifications due to the varying regulations.
Land that is classified as Rustico or rustic (agricultural) often comes with a series of restrictions that must be met if you are going to build a home. Carefully research the restrictions. If you fail to meet every restriction, the Town Hall can fine or ask you to knock your house down.
Another issue to consider with Rustico land is that if the town does decide to change your land from Rustico to Urbano down the road, the landowner may be expected to share the cost of making the land suitable for housing (electricity lines, streetlights, paved roads, etc.) While the land may be worth more, the expense of urbanization can be troublesome.
Because of the risk involved with purchasing Rustico land, banks will only lend half of the land's value in a mortgage. The mortgage will never be granted for more than a twelve year term.
Never go by the seller's word on the legalities of a particular plot of land. Many sellers want to get rid of their land as quickly as possible and will say what ever is necessary to win a sale. You should talk to the local Ayuntamiento (Town Hall) and find out the regulations. Have them put it in writing.
In general, laws usually state that the Rustico plot is at least 10,000 square meters, has a water source, and is backed by another 30,000 of dry land. This will vary from region to region, so you must verify the exact laws with the area Ayuntamiento.
In 1994, the LRAU (Ley Reguladora de la Actividad Urbaniste) changed the laws regarding land ownership. This legal alteration was meant to free up large portions of land so that new homes could be built bringing much needed revenue to small towns. Land that is classified as Urbano is find, but land classified as Rustico (agricultural) is at risk. The government can come in and snatch land from the owners to guarantee that developments can go up. This new law only affects those who purchased their land prior to the 1990s, but it does give food for thought because there is no way to know if the laws may change a few decades down the road again.
According to the laws in many areas in Spain, if a town decides to build on Rustico (agricultural) land, they must provide the land owner with eighteen days to respond. If the land owner does not speak Spanish, this can be troublesome because few non-Spanish speaking residents will be able to find a translator in that short amount of time. Another common issue is that the land owners quite frequently live in another country while they are awaiting construction of their own home. If they fail to appear at the meeting, the development plans can and will go ahead without delay.
When the land is claimed by the town for urbanization, the landowners frequently lose between 50 to 70% of the land their home sits on. Many times this leads to other legal issues. Many landowners are then fined for not having enough land remaining and they must then purchase land back from the town or knock their house down. Another issue is that many of these landowners are then charged fees because the power or water sources must be moved. The debate is on going.
Laws are enforced differently from town to town. You should plan to do a lot of investigating to find out exactly what restrictions are common in the area and talk to other landowners about their experiences. It is essential to closely examine the land you want to purchase for your own financial benefit. The last thing you want to do is purchase a large plot and then find the town government can snatch up a portion of it from under your nose thirty years from now or refuse the building permit because of right of ways or other restrictions.
Many feel that it is best to look for Urbano (Urban) land that is already set for construction. This eliminates headaches down the road.