Before you decide to buy a property in Spain it is important to be aware of the legal processes and costs involved. The information below is intended solely as a guide and is in no way offered as a substitute for independent professional advice.

Appointing a Solicitor (Abogado).

It is not a necessity to engage a solicitor to purchase property in Spain, although we highly recommended that you do. They will check for any outstanding debts which exist on the property, they will also be able to help with contracts and NIE numbers. You are, of course free to appoint a solicitor of your choice, or if you prefer we can recommend one that speaks both your language and Spanish.

NIE number (Numero de Identificacion de Extranjeros).

An NIE number is essential for any financial dealings you may have in Spain. The application is simple, but a sometimes lengthy process, it involves filling in a form with your solicitor, you will also need to supply a colour ‘passport’ photo, a photocopy of your passport and your passport, the solicitor can then obtain your NIE number(s) from the local police station. The NIE number can take anything from 1 to 5 weeks to obtain and we strongly advise you to apply for it as soon after you arrive in Spain. The price for this is normally around 60 Euros.

Applying for a Bank Account.

Whilst it is not absolutely necessary to have a Spanish Bank Account to purchase a property in Spain we strongly recommend it. We will help you, if you wish, to open an account at the bank of your choice. There is a small cost of opening a bank account for ‘non-residents’ it is normally around €10-15 for administration fees.

Applying for a Mortgage.

If you need to apply for a mortgage, you can apply in Spain or in the UK. Mortgage rates in Spain are generally lower than in the UK, currently around 3.5%.

Applying for a mortgage in Spain is a simple and straight forward process, as in the UK. You need to prove that you have sufficient income or funds to pay the mortgage. The percentage of the offered mortgage is directly linked to your financial status and also the declared value of the property you wish to purchase.

There are normally 2 types of mortgages offered, one for residents and one for non-residents. For non-residents the mortgage offer is generally around 60% of the declared value, for residents it is normally nearer 80% of the declared value of the property.

Purchasing a Property.

When you have decided on the property you want to purchase and the terms and conditions have been negotiated with the seller/owner, a deposit is required to secure the property and as official confirmation of your intent to purchase that property, the amount can vary but is normally 10% of the purchase price. The remaining 90% is payable at the signing of the title deeds before the Notary.

Your appointed solicitor will also carry out all necessary searches on the property, to ensure that it is owned by the vendor, it has planning permission, there are no outstanding debts or charges on the property and other legal encumbrances.

Once the searches on the property are completed and the deposit paid in accordance with the terms and conditions of the contract then the title deeds are signed by both the buyer and the seller before the Notary.

The Notary (Notario).

Is a solicitor appointed by the Spanish government to witness the signing of all legal and public documents. In the case of house purchases the title deeds (escritura) of the property. The Notario represents both parties, the buyer and the seller. Notary fees are around 2% of the purchase price of the property and must be paid at the time of the signing of the deeds. The Original signed documents are retained by the Notary who then applies for a formal change in the land registry. The buyer receives an initial legal copy of the title deed (copia simple) which is signed and stamped by the Notary. The official title deed can take up to 3 months to be processed and until then this is your official proof of ownership and must be kept safely.

Taxes.

We recommend that you allow around 10% of the price of the property to cover fees arising from the purchase e.g. land registry fees, notary fees, legal fees and taxes.

Transfer Tax.

This tax is paid by the purchaser and is a standard 7% applied to the declared value of the property. This tax must be paid within 30 days of signing the title deed.

Plus Valia (land/capital gains tax).

This is generally paid by the seller when they sell the property.

Transfer tax is calculated on the increase in the value of the land from when it was last sold. The calculation is based on the rateable value of the property and is a ‘one-off’ payment.

Rates.

This is very similar to the old rates system in England and is based on the declared value of the property. The average price paid is around 120 Euros per year.

Water.

If your property has mains water supply there is a standard charge which is approximately 12 Euros per quarter. The charges for water consumption are an extra.

Electricity.

This depends on how much you use, there is a fixed charge of around 12 Euros payable every 2 months and then a charge for consumption in addition to this.

Telephone.

The standard charge for a telephone line installation from Telefonica is around 180 Euros. The line rental and call charges are then payable every 2 months.