The Buying Procedure in Spain
Buying a property in Spain is a big financial decision and for many foreigners the new rules and procedures of the purchase can be a little overwhelming. The buying procedure in Spain, although quite simple, is not quite the same as at home
Here is an overview with an explanation of some of the more common terms you may come across.
Once you have found your property in order to take the property “off market” the buyer deposits a sum usually about 5,000 euros. You must also sign a reservation documents with the agreed price and payment details. Both the owner and the buyer must sign this document.
A Foreign Identification Number (Numero de Identification de Extranjero or NIE) is required to buy a property in Spain. This NIE is needed by the Notary when signing the Title Deeds. The NIE is issued by the Policia National. We can assist in this procedure as it can be confusing and time consuming.
The next stage, usually 1-2 weeks later, involves signing a Private Purchase Contract and this requires The Land Registry Certificate (Nota Simple certificate). This contract is legally binding and specifies the payment schedule. Also at this stage an amount typically 10% has to be paid to the owner.
Now the process moves to the Notary where the remainder of the purchase price is paid and the Sales Title Deeds (Escritura) are signed. The buyer now takes possession and can move into the property. All the costs including transfer tax and the costs of the Notary must be paid. The cost of buying a property in Spain is generally 13% of the purchase price.
The process has three main phases:
Reservation Deposit, €5,000 - Prior signing the title deeds before a Notary
Signing of Private Purchase Contract (PPC) with 10% stage payment
Completion at Public Notary and payment of the balance
The following 'Step by Step' guide shows the usual process for buying property in Spain
Appoint an independent Lawyer/Solicitor (Abogado) with Power of Attorney if necessary
Secure the property with an initial Reservation Deposit, usually €5,000
Obtain an N.I.E. (Foreigners Tax ID number) your Lawyer can arrange under POA
Private Purchase Contract is signed and this usually takes place within two weeks
10% is paid at PPC (less initial deposit) Note: At PPC the purchase contract becomes binding
Date for completion is mutually agreed between buyer and vendor.
Lawyer sets up Spanish Bank Account and essential utilities for the new owner
Completion takes place at the Notary´s office with the signing of the new title deed (Escritura)
The new Escritura is registered with the Tax Office and then registered in the Land Registry
As the buyer, you should be aware of the costs, taxes and legal fees involved;
Property transfer tax 6–10 % (existing properties)
VAT (or IVA) at 10 % (new properties only)
Notary costs, title deed tax and land registration fee 1–2.5 %
Legal fees 1–2 % (including VAT)
The Spanish legal system guarantees the legal security of property owners. Several actions have to be taken to inscribe the purchase of a property in the Land Registry, thus guaranteeing the right over the property.