Buying & Selling Property in Spain, and, Property Taxes in Spain

The buying process in Spain is somewhat different to the UK but it is possible to complete the purchase within weeks instead of months. The process has three main phases:

  1. Reservation Deposit, €6,000
  2. Signing of Private Purchase Contract (PPC) with 10% stage payment
  3. 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 €6,000
  • 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

Costs Involved in buying Spanish property

You should budget for purchase taxes/costs on top of the full purchase price to cover:

  • New property purchase – 10% IVA (VAT) on purchase price plus 1.5% Stamp Duty (AJD)
  • Resale property purchase: Property Transfer Tax (ITP)
  • Purchase Price: Up to €400,000 - 8%, €400,001 - €700,000 - 9%, Over €700,001 - 10%
  • Land purchase – 21% ITP plus 1.5% Stamp Duty (AJD)
  • Notary & Land Registry Fees: Approx 1%
  • Lawyers fees - 1% plus IVA of purchase price (subject to a minimum charge €1,500)
  • Power of Attorney (approx Euros 250 pp)
  • Número de Identificación de Extranjero (N.I.E.) (approx Euros 200 per person)

Notes

Additional costs will be incurred if a mortgage (Finance) is required to purchase.

Standard rate of IVA (VAT) in Spain on other goods is 21%.

All costs are estimates and given for guidance only.

Power of Attorney

If you do not plan to be in Spain for the completion you will need to appoint your Lawyer in Spain with Power of Attorney to be able to facilitate the transaction in your absence without unnecessary delays. A Power of Attorney can be drafted by your Lawyer for your signature at your nearest Spanish Consulate if you are unable to be in Spain.

Selling Costs

  • Non Residents have a 3% Tax Retention of the Selling price
  • Plusvalia (Town Hall nominal tax on the increase in the value of the land)
  • Estate Agency Fees + IVA
  • Legal Fees 1% + IVA (If using a Lawyer)