When is a habitacion certificate needed?

There is nothing stopping you buying a property without an HC...we did. We knew that our local Ayuntamiento in Albatera would issue a certificate if we had a new EU approved septic tank installed. We did it all through our architect who knew an approved contractor and dealt with all the paperwork.
The previous owner was Spanish and was never bothered about having one. She paid her IBI (Council tax), albeit at a lower rate than she should have for the last 20 years or so because the house was bigger than the deeds stated so that was one thing she was responsible for, getting them updated, and then only had to pay 4 years extra IBI as that is as far as they can legally go back. Thousands of rural properties don't have an HC but you still need to check that the property exactly matches the deeds.
It is nothing to do with the lack of water.
Find out what the potencia is for the electric as you choose your level here, the lower it is then the less you pay for standing charges and per unit but the more likely you are to trip the system if multiple appliances are used at the same time. We have 3 kw and have adapted but also have no air conditioning. If you want a higher input, which many people do, then you will probably have to have a complete re-wire depending on the state of the existing system. We had no earth, which is common, and although we had an RCD in the fuse box the previous owner had bypassed it because it kept tripping. It was probably something to do with the junction box for the outside lights buried in the open ground with bare wires, or the bare wires joining two bits together above the ceiling which had been merrily arcing away.
You will probably have to take down all ceilings to add insulation and any woodwork you expose or renew needs to be treated against woodworm and termites. We have also used insulated sheets on all external facing walls with plasterboard over to stop condensation and mould. There is unlikely to be a damp proof course.
You will need a full heating system as it gets very cold in winter indoors and the higher you are, the colder it will be.
If you have a lot of land it will need a lot of looking after.

You might find the contents of following link of interest:

https://www.abacoadvisers.com/buying-in-spain/habitation-certificate-in-spain 

As previously advised, there are about 250,000 properties in the Valencia region without Habitacion Certificates and unless laws have recently changed, you can buy and sell without one. Depending on your utility suppliers and assuming that the utilities have not been disconnected it is possible to change utilities over. We did. If utilities have been disconnected then you will need an HC to get them re-connected.
The best thing you can do, especially if you are looking to renovate, is to find a local architect who will know what can and can't be done in your area. Your independent solicitor should also be able to advise you. It seems everything is done differently in every area and depending on the mood of the official on the day.
This is one of the reasons it is important to find your own local solicitor and not rely on the one the agent recommends, you want them to be acting in your best interests but you may still need to actually ask the questions and not assume they will tell you what is what as they don't seem to do searches here, as one forum member has found out to their great cost when nobody told them a high speed rail link was being built right next to them. It is buyer beware in Spain as sellers are under no obligation to tell you anything, it is up to you to find out.

Thank you very much for your explicit reply Cheryl. How could I know if the local town hall would issue a HC? Will they have to visit the property to let us know if they would issue a HC? I am also assuming that the septic tank is not to standards..... which is fine, I expect that. I am more concerned about the condition of the property itself being such an old building.... Obviously in the UK, this is done as part of the searches - is it the same in Spain? I have done a lot of research but it is difficult to find the exact info whilst the estate agent just tell you it is all fine!

Also you mention to check that the property matches the deeds exactly, how should I do that (sorry if this sounds like a stupid question!) We love the house but I want to make sure that we don't regret our decision later on...

Thank you so much for your help
Severine

Thank you again for your additional input Cheryl! I am now finding out if the electricity has been disconnected..... You have also answered my questions about searches!
Yes we are looking to renovate as the ground floor of the property is liveable but the upstairs is completely to renovate. I will look for an architect in the area.
And yes I have taken on board the advice of having an independent solicitor.
I remember reading the devastating post of the lady who explained about the high speed rail link being built right next to them.

Better stay away from both farmhouse and agent.

Please don't tell me you're thinking of buying anything without using a solicitor. (Not Gestor) Buying a property is probably the most important and costly thing you'll do and if you cut corners you'll regret it. Your solicitor will advise you about all of these things and for a cost of about 12-1500 euros it is madness to not use one.

I never said I wasn't going to use a solicitor. Not sure where you got that from my original post....

I am simply asking for advice on habitation certificate 

Seems a lot of selling happens without them, also thought their a rules about septic systems from the EU but buying without can give a lot of problems now and in the future when you want to sell.