The Spanish legal and conveyancing systems are pretty much unique and this means that anyone contemplating a Spanish property purchase should make themselves aware of the intricacies of the purchase process before they make a commitment to buy. Most importantly you should ALWAYS use a reputable lawyer.

To begin with
Anyone contemplating a purchase in Spain requires an NIE number – this is a unique taxation identification number and one that is needed before a property can be bought, before a bank account can be opened. Should you require it we can assist you in obtaining both - see our "Buyer services" page for details.

Finance
Some investors prefer to make cash purchases or to raise finance through their company or via close banking contacts – for others they will require assistance with both obtaining a mortgage to buy property in Spain and also with the currency transfer and ongoing Spanish banking arrangements. For European buyers, large high street banking names such as Barclays have banking partners in Spain and many Europeans buy investment property or holiday homes through European banks and so they are well versed in raising international mortgages and handling the financial side of the entire transaction.

Deposits
When a property has been found the first stage in the buying process is signing the reservation agreement. Upon signing between 1 and 2% of the property’s price is paid by the purchaser, and the vendor withdraws the property from the market enabling the buyer’s solicitor to begin the land registry checks.

It is imperative that your lawyerr determines that there are no mortgages or outstanding debts or claims against the property because if they fail to determine this and later it is discovered that the vendor had a debt secured on the property the claimant can continue the claim against the property even though it has changed hands.

Once the buyer’s lawyer has completed the initial land registry checks and all is seemingly in order with the vendor’s right to sell etc., the contract of sale and purchase is signed by both the vendor and the purchaser and a deposit of around 10% is paid to the vendor. Ideally this contract should not be signed if the buyer’s solicitor cannot provide a written statement that the land registry has been thoroughly checked by him and that there are no outstanding mortgages or unpaid debts against the property for sale.

And finally
Before we move onto the completion stages of the process to buy property in Spain it is imperative to mention that the buyer’s lawyer also has to make sure that the property that is being marketed for sale is exactly as detailed in the title deeds and that within the sale and purchase contract there is a detailed record of the boundaries of the property for sale etc. Furthermore, if the property is new or less than ten years old then the ten year post build insurance policy that all new houses should have has to be assigned to the new buyer and this assignment should be mentioned in the contract.

Upon completion buyer, seller, both parties’ lawyers and a bank representative if the buyer is using a mortgage visit a public notary’s office. Final contracts are signed, monies and title deeds transferred.

Taxes and costs
The additional costs associated with buying property in Spain vary depending on the type of property the individual is interested in. New properties attract 7% VAT plus 1% stamp duty, older resale properties only attract the 7% VAT and those buying land are faced with 16% VAT plus the 1% stamp duty. On top of this there are lawyer and notary fees, land registry fees and if using a mortgage there can be a percentage payable in setup and arrangement costs. Those buying property in Spain as opposed to land should allow for 10% in addition to their purchase price and those buying land should allow an additional 20% to be safe.

Finally, new rules relating to capital gains tax and the withholding provision paid by non-residents when buying property in Spain were approved by the Spanish Senate in 2006 and from 2007 non-residents will pay a maximum of 18% CGT on property resales and the withholding provision they pay when selling drops from 5% to 3%.