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Buying Property in Spain: A Legal Guide for Expats

Introduction

Dreaming of a home under the Spanish sun? Buying property in Spain can be an exciting venture for expats. However, it’s crucial to navigate Spanish property law and the conveyancing process in Spain carefully to ensure a smooth transaction. This guide outlines the legal essentials, from initial steps to final deeds,  so you can purchase your Spanish property with confidence, ideally with the help of an experienced real estate lawyer.

Buying Property in Spain: A Legal Guide for Expats- PCC Property

Table of Contents

Understanding the Legal Landscape for Expats

No Restrictions on Foreign Buyers: Spain generally welcomes foreign buyers, so you don’t need to be a resident to purchase property. The main requirement is obtaining a Número de Identificación de Extranjero (NIE) – a foreigner’s identification number used for all legal and tax matters. An NIE is essential for signing deeds, paying taxes, and even setting up utilities.

Engage a Qualified Solicitor: Hiring an independent English-speaking property lawyer is highly recommended. Conveyancing solicitors experienced in Spanish property law will safeguard your interests, explain any terms in plain English, and handle the conveyancing process on your behalf. This professional guidance is invaluable, especially in popular areas like the Costa del Sol where many expats buy homes.

Key Steps in the Conveyancing Process in Spain

Buying property in Spain involves a series of steps. Below is an overview of the typical conveyancing in Spain process for expats: 

  1. Find a Property and Make an Offer: Once you find your ideal villa or apartment, you’ll typically make an offer through the estate agent. If the offer is accepted, it’s wise to immediately engage your lawyer to begin preliminary checks on the property. 

  2. Reserve the Property (Reserva): It’s common to sign a reservation agreement and pay a small holding deposit (often a few thousand euros) to take the property off the market. This reservation contract confirms the seller’s commitment while your solicitor conducts initial due diligence.

  3. Due Diligence and Legal Checks: Your property lawyer will perform thorough checks on the property’s legal status. This includes verifying the title in the Land Registry (Registro de la Propiedad) to ensure the seller really owns the property and checking for debts or encumbrances (such as unpaid taxes, mortgages, or charges against the property). They also ensure there are no planning or building irregularities, or hidden tenants’ rights, that could affect your purchase.

  4. The Private Purchase Contract (Contrato de Arras): After due diligence is satisfactory, both parties sign a private purchase contract, commonly an arras This contract outlines the purchase terms and is secured with a deposit (typically 10% of the purchase price). Under the standard arras penitenciales, if the buyer pulls out, the deposit is forfeited; if the seller pulls out, they must return double the deposit. This agreement legally binds both sides and paves the way for the final sale.

  5. Notary and Public Deed (Escritura): Spain requires property sales to be executed in a public deed before a Notary. The notary is a public official who ensures the transaction is lawful and properly documented. On the completion day, you, your lawyer, the seller, and a notary meet to sign the Escritura de Compraventa (deed of sale). The remaining purchase price is paid (often via a banker’s draft or transfer), and the notary officially witnesses the transfer of the property. Once signed, you receive the keys – congratulations, you are now the legal owner.

  6. Registration and Taxes: After the notary, your solicitor will register the new title at the Land Registry to officially record you as the new owner. They will also handle payment of taxes such as Transfer Tax or stamp duties. It’s wise to budget about 10–15% extra on top of the purchase price for closing costs in Spain (including taxes, notary and Land Registry fees, and legal fees).

Costs and Taxes to Consider

Buying a property in Spain comes with certain taxes and fees that expats should budget for:

  • Property Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP): If you buy a resale (used) property, you’ll pay a transfer tax. Rates vary by region (around 6% to 10% of the purchase price). For example, in Andalusia (home to the Costa del Sol), ITP is typically around 7–8%.

  • VAT (IVA) and Stamp Duty (AJD): If you buy a new property from a developer (often the case for new builds), instead of ITP you pay VAT of 10% plus an Actos Jurídicos Documentados (stamp duty) of around 1–2%. Your lawyer will advise which tax applies to your purchase.

  • Notary and Land Registry Fees: These are standard fees for the official execution and registration of the property deed. They are generally charged on a sliding scale based on the property price (usually a few hundred euros each).

  • Legal Fees: Budget for your lawyer’s fees (often about 1% of the property price). While this is an additional cost, having legal representation is vital for a secure transaction.

  • Other Costs: If you’re taking out a Spanish mortgage, there will be bank charges and a valuation fee. Also consider ongoing expenses like property insurance, community fees (if buying an apartment or in a development), and annual property taxes (IBI). 

Tips for a Smooth Property Purchase

  • Financing and Budget: Arrange your finances early. If you need a mortgage in Spain, get pre-approval from a Spanish bank and understand the terms. Also consider currency exchange if your funds are in a different currency – exchange rate fluctuations can impact your budget.

  • Power of Attorney: If you cannot be in Spain for every step, you can grant Power of Attorney to your solicitor. This legal document allows them to act on your behalf for tasks like obtaining your NIE, signing contracts, and even completing the purchase at the notary. It’s a convenient option many expats use to avoid multiple trips.

  • Avoiding Pitfalls: Always insist on a thorough review of all legal documents. Don’t rush into signing anything (even a reservation contract) without legal advice. Be cautious of unusually high deposits or terms that seem unfavorable. Remember that verbal promises by sellers or agents should be confirmed in writing.

  • Community and Local Rules: If the property is part of a community of owners, have your lawyer check the community rules and ensure all fees are paid up. Some regions (for example, protected coastal zones) have extra regulations – professional advice helps you avoid any unwelcome surprises.

Summary

Buying a home in Spain can be a rewarding investment and a dream come true for many expats. By understanding the process, securing expert legal help, and doing due diligence, you set yourself up for a successful purchase. Spain’s property buying process is safe when navigated correctly – and with the right conveyancing support, you can soon enjoy your place in the sun, worry-free.

Need guidance with buying property in Spain? PCC Legal specialises in Spanish property law and offers comprehensive support for foreign buyers. Whether you’re looking at Costa del Sol conveyancing or purchasing elsewhere in Spain, our experienced team is here to help every step of the way.

Contact our conveyancing in Spain experts today or get in touch to discuss your needs, and let us ensure your Spanish property journey is smooth and secure. 

 

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PCC Property Logo Gold - Real Estate Agency La Cala de Mijas - Costa Del Sol - Spain

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