10 easy steps to buy property in Spain

Raymundo Larraín Nesbitt, May, 30. 2024

Raymundo Larrain gives a sweeping overview on how to buy property in Spain safely.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years of experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of June 2024

Introduction

The following article aims to be a basic checklist covering what I reckon are the ten basic points, nothing more.

I have greatly abridged it, not going into detail on whether you are buying resale or a new build property, or between commercial, urban, or rural land.

If you fancy a more in-depth and fleshed out guide on how to buy property in Spain safely, I refer you to our detailed Homebuyer’s Guide in Spain.

Ten easy steps to buy property in Spain

1. Hire a lawyer

If you are a non-resident in Spain (particularly a foreigner), you are strongly advised to instruct a lawyer to guide you through the procedure. Your appointed lawyer will run a due diligence on the property ensuring you acquire a clean title with no outstanding debts or taxes.

Your lawyer requires a Power of Attorney. A PoA enables a lawyer to act on the buyer’s behalf:

opening a bank account
applying for a NIE number
apply for a mortgage loan (in Spain, by law, a borrower is required to pass a multiple choice test to qualify, your lawyer can take the test for you)
drafting & signing legal documents on behalf of the principal
filing property taxes
connecting utilities
dealing with a community of owners

Beware of anyone telling you that hiring a lawyer is unnecessary, you can be sure they have vested interests of their own.

2. Apply for a NIE number

A NIE number is a tax identification number for foreigners which identifies you before the Spanish Tax Office and allows you to file and pay taxes in Spain. A NIE number is an essential admin document that everyone in Spain will be asking for: banks, schools, town halls, healthcare etc. It’s a must-have; the sooner you get it, the better. We can get you a NIE in 2 weeks.

3. Open a bank account

Opening a bank account in Spain is required on buying property (or when you apply for a visa). Utility companies and Spanish health providers only accept Spanish accounts to domicile payments. You will be required to attend the bank in person to open an account.

4. Do you need a visa?

If you are an EU national, as a general rule, you do not need a visa to stay in Spain. However, if you plan to spend more than 90 consecutive days in Spain, you must apply for a residency permit. This is fast-tracked for all EU nationals, attained by us in under one month.

If you are a non-EU national, as a general rule, you are required to attain a visa to remain in Spain for more than 90 consecutive days. Some visas must be applied for from your home country (before travelling to Spain), yet others can be applied for from Spain. You can read our comprehensive Spanish visa overview for more details.

5. Reservation contract

Once you’ve decided on a property, you need to commit.

Typically, an estate agent listing the property will ask you to pay €3,000 (or €6,000 for more expensive properties). This is normal, don’t worry. Unlike in other countries, such as in the United Kingdom, there is no 14-day cooling-off period. Reservation deposits are non-refundable (unless expressly agreed and worded otherwise in the contract).

A reservation contract is a simple one-page document whereby the seller reserves a property for you over the next 30 days in exchange for a deposit. If you go ahead and complete, the deposit will be part of the sales price. If you decide to pull out, you lose the deposit.

6. Hire a surveyor

We strongly advise buyers to hire a property surveyor, particularly on buying rural property or on buying off-plan property. Surveyors draft a comprehensive report with a detailed snagging list. This report is very useful and can be used to detect build flaws and re-negotiate the sales price. We advise surveyors to be registered with RICS, which works to high professional standards.

7. Exchanges - signing an arras contract

Signing an arras contract requires you to pay 10% of the asking price. This amount is non-refundable once signed and paid.

If the buyer pulls out of the contract – for whatever reason – they lose the 10%.

If a seller pulls out of the contract – for whatever reason – they pay 20% of the asking price (as a penalty).

Signing an arras contract is a (very) serious matter. Under no circumstances should a buyer sign it without a lawyer. Depending on how they are worded, some of these contracts actually force buyers to pay the full property price! Even if they do not want to. You can be taken to court over this contract.

8. Completion

Normally, 30 to 45 days after signing an arras contract, depending on whether the buyer requires a mortgage loan or not, the parties need to attend a notary chosen by the buyer to sign a Title deed (escritura, in Spanish) witnessed by a notary public. The buyer will now pay the balance of the asking price and possession will be his (keys hand over).

9. Property registration

After you sign at a notary, you need to pay the associated Property Transfer Tax. The Title deed must then be lodged at a land registry by your lawyer. This usually takes 1 to 2 months, depending on how busy the registrar is at the time.

It is important to understand that if a property is not registered under a buyer’s name, he does not legally own the property, even if he signed a Title deed.

The main reason is because Spain follows a two-tier system of transfer of ownership (notary and land registry). For peace of mind, ownership of a property can be verified in under 24 hours on commanding a nota simple service from us. A nota simple is a land registry report.

10. Post-completion

Post-completion, a buyer still has to deal with a long to-do list.

Your lawyer can (greatly) assist you in cutting through all the below red tape saving you money, time, and aggravation:

Utilities: Your lawyer can connect you to the mains (water & electricity). Also, to internet, gas, and landline. We offer this utility connection service.
Taxes: on owning a property in Spain you will be required to pay for a series of taxes, both local and national. As local taxes, you have to pay IBI and garbage collection tax. As a national tax, non-resident property owners need to pay once a year what is known as imputed rental income tax (even if you do not rent out the property, it’s a notional income tax). Failure to pay some of these taxes will lead to embargoes (legal charges placed against your property) which may result in your home being impounded and sold off in a public auction. We offer this tax service.
Padron: If you plan to live in Spain, you must enrol in the town hall census (padron). This is known as empadronarse or empadronamiento in Spanish. This is required to access public healthcare, vote on local elections, apply for a mortgage loan, schools, etc. We offer this padron service.
Community of Owners or EUC: If you buy a property within an urbanizacion, or development, you will need to join the community and pay your fees. These are normally paid quarterly. Non-payment may lead to the community suing you.
Making a Spanish will. On owning property in Spain, it is strongly advised you make a Spanish will. A Spanish will safes your beneficiary's time, money, and aggravation at a time of bereavement. A Spanish will does not preclude one made in your home country, it only affects your Spanish estate. Ideally, foreigners should make two wills; one in their home country and one in Spain disposing of their Spanish estate. We offer this will-writing service.

Conclusion

If you plan to buy property in Spain, and are a non-resident, contact us to assist you in the legal procedure.

At LNA we make it all easy, so you just have to sit back and relax. We take care of everything removing all the associated stress.

Not to mention our fees are 100% tax-deductible on selling!

Related services available from LNA:

At Larrain Nesbitt Abogados (LNA) we have over 21 years’ experience specializing in immigration & residency visas. We also assist clients buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV.