This section describes the process of buying a property in Spain.

For more details on all the financial transactions and the legal side, please see our legal advice and financial sections.

Cost of Purchase

In addition to the cost of the property, you should allow for all the fees and legal costs to come to approximately 10% of the price of the property. This will cover solicitor's costs, land registry fees, notary's charges, stamp duty and VAT. 10% is the maximum, it may well work out less at around 7-8%. A breakdown of all the costs involved is provided below.

Lawyer

It is advisable to employ the services of a solicitor (abogado). The lawyer should tell you in advance what his fees will be, typical is 1% of the purchase price of your property, plus VAT (IVA @ 16%).

Contract and Deposit

Once you have decided on a property, you will need to make a purchase contract and make preparations for the deposit to secure the property. The standard deposit is 10% of the purchase price. The deposit is payable when you sign the purchase contract (Contrato de Compraventa), which will state a completion date and the conditions of the transactions, which should usually contain an assurance by the sellers that the property is sold free of charges, tenants and mortgages.

Once both parties have signed this contract and the deposit has been paid, you have secured the property. The contract is binding for both sides, and there are penalties for breaking it or for failing to honour the terms of the contract.

Preparation

It is essential to review the important legal details, your lawyer should check the receipt for the paid IBI, (the Impuesto sobre Bienes Inmuebles), the annual real estate tax. This receipt shows the Valor Catastral, the official assessed value of the property, on which your property owner`s income taxes will be based.

Check with the local town hall that the receipts have been paid, if there is an outstanding balance you can request that this should be settled by the vendor before the sale is completed, or it can be deducted from the overall calculation of what you will pay the vendor. If you are employing the services of a lawyer, he should check all these details for you.

All property in Spain should be registered with the land registry (Registro de la Propiedad), where you can obtain the exact details of the owner, the size of the property and details of any mortgages, debts or judgements against the property. Only the persons or company named on the title deed (Escritura Publica) have the right to sell the property. You or your lawyer should request the Nota Simple (this is an extract from the title deeds) from the Registro de la Propiedad before you buy the property.

The Notary

After the purchase contract has been made (“Contrato de Compraventa”), the next stage is to complete the purchase at the Notary`s office. (Notario). Your lawyer will make an appointment with the Notary, and the title deed (“Escritura Publica de Compraventa”) will be signed in his presence. The notary's job is to check that all the paperwork is accurate and to certify that the contract is officially made. You will be required to pay the balance of the purchase money, the taxes and the Notary`s fees.

The Notary charges are collected by the Notary for preparing the deed and presiding over the signing. The fee is fixed by law, on a fixed scale depending on the property value, and whether the property is mortgaged or not. It is not normally more than 1% of the purchase price (including 16% VAT).

Property Registration

When the title deed is signed, you will become the new owner, and the final step is to have the Escritura Publica registered in the Property Registry Office to prevent a mortgage or other charge being registered against the property, while it is still listed in the name of the seller.

Legal Advice

Please see our Legal Advice section for more information.

Raising the finance

Please see our mortgages section for more information.