Purchasing a property_EN

Purchasing a
Property in Spain



Table of Contents

About this Guide 1
Lexland Lawyers 2
Purchase Procedure 3
Mortgage Loan 4
Taxes and Expenses 5
Property Maintenance 6

About this Guide

If you are planning to purchase a property It is crucial to choose a lawyer specialised
in Spain, you must take into consideration in Spanish Real Estate Law who has
that the Spanish property conveyancing extensive knowledge of how the system
system is di erent to other countries. For works and can guide you throughout the
this reason, one of the main things you whole process.
should do is seek out relevant information It is very important to keep in mind that
about how the Spanish law system works, you should not arrange the rst visit with
which is why Lexland o ers you a free the estate agent or sign any documents
guide of the steps to buying a property in until you have received advice from a
Spain. specialised lawyer.
This guide is aimed at helping you obtain Please read our Legal and Fiscal guide
the information you need in order to have carefully. The information provided in this
an overview of the property purchasing guide will warn you about the di erent
procedure in Spain. types of taxes, saving you a lot of money
and avoiding future inconveniences that
may arise during the process.

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01 Purchasing a property in Spain

Lexland Lawyers

Lexland Lawyers is one of the leading Lexland is a Full Service Law Firm providing
law Firms in Spain considering number legal solutions to any situation presented
of lawyers and turnover. It was created by our clients. We have a strong division
in 1978 and has developed extensive of legal services and every professional in
knowledge and years of experience in the our team is specialised in a particular eld
Real Estate market, being able to o er our of law, allowing Lexland to cover all areas
clients the appropriate legal and tax advice of the Spanish legal system.
when purchasing a property in Spain. Our multilingual professional team speaks
Lexland Lawyers covers both national more than 10 languages, being able to
and international tax practice, with a advise clients from practically anywhere in
focus on private clients. Lexland provides the world in their own language and with
legal counseling and practice on nancial a deep understanding of their cultural
taxation in Spain regarding acquisition background.
and sales, business restructuring and Lexland o ers a full guide of the crucial
plani cation, tax inspections and tax steps that must be taken into consideration
litigation. when purchasing a property in Spain.
These steps are the following:

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02 Purchasing a property in Spain

1. Purchase Procedure

The rst and most important step when • This contract covers all the terms,
purchasing a property in Spain, even conditions and obligations of the
before choosing the property you wish to purchase, such as: the property that
purchase, is to engage a Lawyer to guide is sold and its annexes, the purchase
you throughout the procedure and start a price, the conditions and obligations
Due Diligence process in order to ascertain of each party, terms and means of
whether the property is free of charges payment, date of completion, etc.
and encumbrances.
Lexland Lawyers guides you through the • Upon exchanging the private purchase
initial steps to purchasing a property in contract, the buyer shall pay from
Spain. No obligation initial consultation. 10% to 30% of the purchase price as a
Completely free! con rmation of the reservation of the
property.

Lexland Lawyers shall make all the Obtaining all the necessary documents
necessary enquiries regarding the prior to signing the Purchase Title Deed
property at the Land Registry, Catastral and drafting the Deed, as well as applying
O ce, Tax O ce, Town Hall and Banks, for a mortgage if necessary.
among others. Signing the Purchase Title Deed before the
Reservation of the property: Notary Public, payment of the remaining
• This document is signed with the purchase price, handing over the keys and
all the documents related to the property.
vendor of the property (the Real Estate If necessary, the Mortgage loan Title Deed
Agency or the vendor himself), in order shall be signed on the same day.
for him to take the property o the Registration of the Title Deed of Purchase
market. Normally, a minimum of 6.000 at the Land Registry as well as changing
€ is paid upon signing this document. the name of the water and electricity
Opening a bank account and requesting a supplies contracts, local rates, rubbish
NIE number ( scal identi cation number collection, etc.
for foreigners).This document is absolutely You may also hire our tax and accounting
necessary to purchase a property. services in order for us to help you
Final enquiries with regards to the through the aforementioned steps, as well
property as paying the relevant taxes, applying for a
Private purchase contract: residence permit or any other issue related
to your property, yourself or your family.

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03 Purchasing a property in Spain

2. Mortgage Loan

In the event that the non resident buyer For the appropriate study of the mortgage
needs nance in order to purchase the loan application by the bank, several
property, Spanish banks may grant a documents will have to be handed in
mortgage loan. Nowadays, banks tend to (Lexland shall inform you about the
grant non residents a mortgage loan for required documents). The documents
up to 80% of the purchase price or Loan must all be original and a sworn translation
to Value (LTV), whichever is the lowest, into Spanish is required (Lexland may help
although this may vary depending on you with this matter).
the nancial institution. The timeframe
for the duration of the loan depends on
several aspects, such as the age of the
mortgagee. Mortgages are normally paid
on a monthly basis. The debt to income
ratio is normally around 30%. This means
that if the monthly payment is 300 €, you
shall have a combined net income of 900 €.

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04 Purchasing a property in Spain

3. Taxes and Expenses

incurred in when purchasing
Real Estate in Spain

There are several expenses and taxes The following expenses must be taken
which must be paid when purchasing a into account in both cases:
property other than the price agreed upon • Notary Public fees (depending on the
with the vendor:
When purchasing a newly built property, purchase price)
the buyer must pay Value Added Tax (VAT), • Land Registry fees (depending on the
which amounts to 10% of the purchase
price as well as Stamp Duties (1,5%). purchase price)
When purchasing a property as a second If nancing is necessary for the purchase
transmission in Andalucía, 8%, 9% or 10% (mortgage loan), the following additional
Transfer Tax is paid, depending on the expenses shall be noted:
purchase price. • Insurance: 250-500 € (approx.)

• Payment of these taxes may be avoided • Commissions for having a mortgage
if instead of purchasing the property loan (depending on the nancial
as a natural person, the property is institution, between 1% and 2%).
purchased through purchasing shares
of a company which owns the property.
The transmission of shares is not
subject to VAT or Transfer Tax provided
that the requirements laid down in
article 108, 2 of the Stock Market Act
are met.

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05 Purchasing a property in Spain

4. Property Maintenance

There are currently three types of annual electricity, gas, etc.) depend on
fees that must be paid by owners of the consumption (although some
properties in Spain: municipalities have xed rates). The
invoices for the supplies are directly
• IBI (Property Tax). It is a local tax that debited to your bank account.
must be paid every year both by
residents and non residents. In some • Community of Owner fees are the fees
municipalities, rubbish collection tax is that the owner of a property located
also paid. in an urbanization or block must pay
for the maintenance of the common
• Wealth Tax areas (garden, swimming pool, etc). If
the property is not in an urbanization
• Non Residents Income Tax Expenses or block, these fees may not have to
and fees related to maintaining the be paid, but other expenses such as
property. gardening and rubbish collection may
be obligatory.
Expenses related to maintaining the
property:

• Expenses related to utilities (water,

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06 Purchasing a property in Spain

Lexland Lawyers

Due to our vast and renowned experience in this eld, Lexland Lawyers may o er
you appropriate legal and tax advice when purchasing a property in Spain, as well as
other related matters. If you have found this information useful or should you have any
queries regarding the purchase of a property, please do not hesitate to contact us. The
initial no obligation consultation is completely free. Let’s talk!

It´s all about you.

Independent and reputable No hidden costs
Direct advice from a quali ed Same-day reply
lawyer Open seven days a week
Free rst consultation

For more information, please contact Dimas Cuesta at:

[email protected]
Tel: (+34) 902 555 299
www.lexland.es

We speak your language

Please note that the information
contained in this guide is merely
aimed to inform you about the basic
procedure to purchasing a property
in Spain. In no case will this guide
replace advice and assistance from a
quali ed professional when initiating
this process. Please take into account
that your particular case may vary from
the procedures described in this guide.

www.lexland.es