Legal Steps Before Buying a Property

If you are a foreigner interested in purchasing property in Spain, you will need to:

  • 1. Obtain a NIE (Foreigner Identity Number) from the National Police offices.
  • 2. Open a bank account in Spain, preferably at a branch where staff can communicate in a language you understand.
  • 3. Engage a lawyer who specializes in Spanish urban planning law. Unlike the property transfer systems in other EU countries, Spain's system requires the involvement of qualified professionals who are experts in navigating these legal complexities.

Reservation of the Property

The buyer makes a deposit to guarantee their intention to purchase the property within a specified period, and the seller agrees to keep the offer valid for that same period. Both parties may terminate the agreement based on the conditions stipulated.

Signature of the Private Purchase Contract

Upon signing the private purchase contract, a suitable payment method will be determined, which may vary from one buyer to another.

Signing of the Deed of Purchase and Sale and Key Delivery

The deed of purchase and sale is executed in front of a notary and includes a precise description of the property. The notary will electronically notify the Land Registry. The buyer must then register the property in their name at this registry. The document will be drafted entirely in Spanish as it is an official document. Hence, it is advisable to have a lawyer who can provide accurate translations and guidance. Generally, the property keys are handed over when the sale deed is signed, at which point the buyer legally and financially owns the property, subject to any arising rights and obligations. The buyer can then begin enjoying their new home.

Taxes on the Purchase of Properties

New Construction Properties

VAT: 10%.
IAJD (Tax on Documented Legal Acts): Approximately 2%, covering notary fees and registration at the Land Registry.

Second-hand Properties

ITP (Property Transfer Tax): 6-10%, varies by property location.
IAJD: Approximately 2%, as above.

Annual Taxes and Expenses

IBI (Real Estate Tax): A municipal tax based on the property value.

Tax for Non-Residents. Applicable to foreigners who own property in Spain but are tax residents in another country.

Rubbish Collection Rate: A municipal fee for garbage collection.

Community Expenses. For properties in communal residential complexes, there are likely annual maintenance fees for amenities such as swimming pools and gardens.

Do You Need a Mortgage?

If you are a foreign client looking to secure a mortgage in Spain, you must meet the following criteria:

  • Net income should be at least three times the total of all loan payments.
  • The loan amount should not exceed 50-60% of the property value.
  • Provide a credit report from your country of origin.
  • The age of the youngest borrower must not exceed 75 years.

If you require a mortgage to purchase your property, we are here to assist you. We collaborate with numerous banks to offer you the most favorable options based on your financial profile.

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