Buying Property in Spain

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Completing the purchase:

    Escritura de Compraventa:  The Final document for the sale is the Escritura de Compraventa and it must be signed by the buyer and the seller in the presence of a Spanish Notario in order to make it legally binding. The seller or the buyer can make a Poder [power of attorney] allowing another person to sign instead.

   The Notario: The Notario is a public official who's job it is to certify that the contract has been signed, the declared money transferred and to advise both parties of their tax liabilities for the purchase. Any other payments should be made in the presence of your lawyer at the Notario's office. The Notario is not responsible for the accuracy of statements in the contract, that is your lawyer's job. 

    Registering the Escritura de Compraventa: Finally, your Escritura de Compraventa must be registered with the Spanish property registry to make it Escritura Publica and fully install your title to the property. You should receive this from your lawyer within 5 - 6 weeks of the purchase, if not, pursue it with your lawyer (you have been charged approximately 0.2% for this registration). Until you have the Escritura Publica you do not have full title to your property and you are not the registered owner.

    Taxes and fees payable when buying a property:  You should allow an additional 8 to 9% of the purchase price it to cover everything except the Plus Valia (Normally paid by vendor) again your lawyer will should advise you of the exact amounts.

    Plus Valia:  The Plus Valia is based on the increase in value of the land since the last sale. The Town Hall will advise you of the exact amount. Normally the seller pays this tax but, as always everything is up for negotiation, just find out exactly how much is due before you make your offer.

    Property transfer tax and stamp duties:  Property transfer tax and stamp duties are 6 - 7.5% (can be 16% or 16.5% for plots of land and commercial premises), most commonly it is 6% on pre-owned property and 7% for new. This tax can be avoided when a purchasing a company which owns a property, as the owner of the property does not change, just the owner of the company, again consult a specialist tax lawyer.

   Lawyer, Notario and registry fees:

Formalising an offer:
   It is recommended that a lawyer is engaged before an offer is made. The fact that an offer accepted by the seller is binding as any other contract makes the intervention of the lawyer appropriate at that time in order that the terms and conditions of the offer are correct and favourable to the buyer.
The lawyer will also help the buyer find out what the ongoing taxes are on the property if the Real Estate Agent fails to do so.
Once the terms of the purchase-sale have been discussed, and offer is submitted to the Estate Agent who in turn will inform the seller of the details of the offer. If the seller accepts the offer, a binding agreement is born. It is normal practice in Spain to include with the offer a sum of money to reserve the property prior to the exchange of private purchase contracts, in order to show the seller that there is a real intention to purchase.

Exchange of private purchase contracts:
   If the legal representation of both parties deem necessary the exchange of private purchase contracts, this is verified against payment of normally a 10% of the purchase price. This documents sets out the agreed terms and conditions of the transaction and sets out the date for final completion before the Notary Public.

After the reservation deposit has been lodged with the Estate Agent and prior to the signing of the private purchase contract, the appointed lawyer will have completed the legal searches and investigations of the property.

Any debt or charge attached to the property will be reflected in the private purchase document. These will have to cancelled prior to completion. If not, the buyer will be entitled to either withdraw from the proposed deal and claim damages or deduct the amount of the debt together with the cancellation costs, if any.

Completion:
The purchase is formally completed when the public title deeds of purchase-sale are signed before a Notary Public, the agreed payment of the price paid and the possession given to the buyer. Unless agreed otherwise, the public deed always stipulates that the property is sold free from charges and encumbrances, up to date in all the different payments and free from tenants and occupants. Four or five days after completion, the deed is collected from the Notary's office. 

With the original deed, all the relevant transfer taxes are paid in the different tax offices and eventually the deed is taken to the Land Registry in order to procure formal registration of the title to the property. 

Registration is not mandatory, although highly recommendable.

Similarly, the lawyer will arrange for the transfer of accounts with the local suppliers of utility services and organise a direct debit on a current account of a local bank.

Depending on the Land Registry of the area, registration may take from 15 days to 3 months. The Land Registry will then give notice to the lawyer that the registration has been completed and the deeds are available for collection. Land Registry fees are paid then.

During the interval the purchaser can have a copy of the records by requesting from the Notary Public a ´copia simple´. The lawyer will need a couple of copies in order to complete all the legal formalities.


Purchase costs:

The Information Provided on this page is Generic and for General Guidance Only

While we endeavour to provide accurate information - the subjects of Spanish Property, Immigration Laws and Taxes is complex and subject to change - ALWAYS consult a Lawyer before proceeding with any Legal Contract or Move