Buying a property in Spain

When you have found a property that you wish to buy in Spain you will need to pay a deposit ‘subject to contract’; this is refundable if the purchase is not completed. The next step is to open a Spanish bank account and apply for a NIE (Fiscal Number for Foreigners), obtainable by registration at the Policia Nacional office nearest to the desired property. It is recommended that you instruct a lawyer to monitor the progress of the property purchase. We will supply you with a Nota Simple (Registry Extract), which will detail any legal interests or encumbrances the property may be subject to and is necessary for the confirmation of a mortgage offer. When financing is arranged the buyer will need to sign a purchase agreement stating all relevant conditions and the completion date of the sale. The next step is to sign the title deeds at a Notaria (Notary’s Office).

In addition to the purchase price, there are various taxes and charges that will need to be paid. For newly built properties, these include an IVA (VAT) rate of 7% on the purchase price, 1% stamp duty (to be paid within 30 days of the purchase date), legal fees, typically 1% of the purchase price, and Notary fees and Land Registration fees ; these last two fees would typically total no more than 1000 Euros on a property purchased for 300,000 Euros. Buying a resale property incurs a 7% transfer tax along with legal fees. The vendor will pay the Notary fees, although the buyer will have to pay for the second and any subsequent copies. The vendor is also obliged to pay municipal fees, although this may be a matter of negotiation between the two parties.

Property ownership in Spain attracts certain local and national taxes, dependant upon whether the property owner is resident or non-resident in Spain. Your Fiscal Representative will be able to advise you on taxes to which you are liable. It is also advised that you make a will detailing the disposal of your assets in Spain.


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