Buying Property in Spain & Spanish Property Law

Buying property in Spain is not the same as buying in the UK. There are many differences between Spanish and UK property law and a range of issues to think about, including how the property will be owned, securing a mortgage and notifying the relevant authorities.

To make sure you understand the exact legal requirements you need to meet and avoid the potential pitfalls of buying property in Spain for foreigners, we strongly recommend working with a legal team who have extensive experience navigating Spanish property law.

At Judicare, we have been helping people from the UK to buy property in Spain for many years. We know every issue you need to think about and all of the legal details that need to be taken care of.

As UK-regulated lawyers we can offer the peace of mind of knowing you are in safe hands, while also providing a comprehensive understanding of Spanish property law. We can also offer legal guidance in plain English, so you are never left confused about what is going on or what you need to do.

Whatever your reasons for buying a property in Spain, this may be the first time that you have done so and it could be the first time you have bought property abroad at all. As specialist Overseas property lawyers, we do this every day and have been assisting clients buy property in Spain for many years, so our team know all the tricks and problems that you may come across.

We understand how Spanish law interacts with UK law, so can help to ensure you meet all of the strict requirements of both countries’ laws. Based on our many years of experience, we can offer tried-and-tested practical solutions to any problems you might run into.

As well as guiding you through the process of buying a Spanish property, we can also advice on related issues such as obtaining your NIE, tax considerations, using Powers of Attorney to buy Spanish property and dealing with inheritance issues.

For your convenience, we have put together a list of useful Spanish legal terms and their English translations, to help make navigating legal issues in Spain a little easier. You may also want to take a look at our Buying Property in Spain Checklist

For specific advice on buying Spanish property tailored to your needs, please get in touch with our friendly, expert Spanish property lawyers based in the UK.

Call: 01438 840 258                    Email: admin@judicaregroup.com

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How Judicare can help you with buying a property in Spain

Clear guidance on Spanish property law

The Spanish legal system is very different to that of the UK and our Spanish property team can explain everything you need to consider before making a purchase, so you can move forward with confidence.

We can also advise you on the ways in which Spanish law and UK law interact when buying in Spain, so you can be confident that you are complying with the requirements of both countries’ legal systems.

Conveyancing for Spanish property

Our UK-based Spanish property legal team can handle the entire process of buying in Spain for you, including:

  • Reviewing contracts of sale
  • Carrying out essential property checks
  • Raising any necessary queries with the seller’s lawyers
  • Negotiating amendments to the sale contract where required
  • Handling transfer of the deposit
  • Facilitating payment of the balance
  • Making sure the property title is correctly registered in your name

If you wish to make the purchase without leaving the UK, we can create a Power of Attorney giving someone the legal authority to complete the purchase on your behalf.

We can also advise you on having a property survey carried out to highlight any potential defects with the property, including structural issues that could prove expensive to put right. Where any problems are identified, we can negotiate with the seller on your behalf to secure a discount to cover any costs associated with putting right those issues.

We can also assist with negotiation with your estate agent and the offer to secure your overseas property. 

Getting a mortgage to buy a property in Spain

Should you need to borrow money to cover the cost of buying in Spain, you have two main options:

  1. Release equity from your UK assets to buy the property in Spain.
  2. Get a mortgage on the property in Spain from a Spanish lender.

Each option has advantages and disadvantages but getting it wrong can cost you dearly, so please do take professional advice on this. Our team can advise you on each of these options and the potential long-term consequences of both.

Our recommended international mortgage broker is Simon Conn – overseas mortgage broker - who will be able to assist you with this aspect of your purchase in Spain.

We do not receive a commission for doing so we simply recommend Simon because he has given our clients good service in the past.

Obtaining a mortgage in Spain is more difficult than it has been in the past, but if you are buying a property in Spain that already has a mortgage on it, then it may be possible to take over that mortgage from the current owner.

This latter option may be seen as an easy way of obtaining a mortgage, but you should be aware that the mortgage might have been the right one for the seller but may not be the best one for you.

For more information, please take a look at our guide to mortgages on foreign properties.

Finding a currency dealer for you

When you are converting from one currency to another the difference between one exchange rate and another can literally make a difference of thousands of pounds on your purchase.  

Do not underestimate the difference a good exchange rate can make, especially when converting from pounds to euros. We have even seen examples where our clients have sold properties and made more money on the exchange rate difference than they have on the sale of their property.

We are not a bank or currency dealer, but would recommend that you investigate the cheapest way of sending your money abroad. We get approached all the time by currency brokers and have gone through a screening process to make sure our clients get the best service available. Foreign Currency Direct is our company of choice as they regularly beat their competitors and deliver a high quality service.

Foreign Currency Direct have increasingly sophisticated products. You can agree rates for the future. You can get them advising you when to buy or agreeing to buy for you when the rate hits a certain level. You can even agree a fixed rate for longer periods of time if you make regular payments abroad (for example for a mortgage or moving your pension money). 

We will normally receive a commission for introducing them to you. This does not cost you anything more as they pay us part of what they make. This commission is costed into our overall charges for providing our services. 

Obtaining your NIE (Numero de Identidad de Extranjeros)

Your NIE (Numero de Identidad de Extranjeros) is your Spanish tax identity number (it literally translates as “Foreigner’s Identity Number”). You will need this for paying tax in Spain as well as for various other purposes, including:

  • Buying a property
  • Opening a bank account
  • Dealing with the utility companies
  • Taking out insurance
  • Dealing with the tax authorities
  • Buying or selling shares, bonds and stocks
  • Buying a car

The rules on NIEs change regularly and between geographical areas. In some cases, you will be required to obtain your NIE yourself and sometimes it can be done by somebody on your behalf.

We can advise you on the current NIE rules for the area where you are buying and the costs involved, helping to make sure this important step in the process of buying in Spain can be dealt with smoothly and in a timely fashion.

Creating a Power of Attorney for buying a property in Spain

It is common that the title deeds for your property will need to be signed in Spain, which can be inconvenient if you are still based in the UK and would prefer to avoid travelling to Spain just to sign the deeds.

In these situations, we can create a Power of Attorney for you, granting someone you trust the legal authority to sign the title deeds on their behalf.

This approach has several advantages:

  • You won’t need to take time out to travel to Spain just to sign the title deeds
  • It is normally cheaper to create a Power of Attorney than the cost of travelling to Spain
  • You can choose whoever you want to act as your Attorney, including a solicitor, so you can be confident they fully understand all of the legal implications of their role

It is important that you only assign Power of Attorney to somebody that you fully trust as you are giving them the legal authority to act on your behalf. 

In Spain, Powers of Attorney tend to offer much broader powers to the Attorney than those afforded to UK Powers of Attorney. It is common for Spanish Powers of Attorney to have very general clauses in them “just in case”. We try to limit the Powers of Attorney as much as possible whilst still allowing the person appointed the freedom to do what is required.

We typically charge £200 plus tax for drafting up a standard Power of Attorney. On top of that you will have Notary fees, foreign and Commonwealth Legalisation fees (£30 per document) and often Courier fees. 

For more information, please take a look at our guide to using Powers of Attorney.

Deciding how your Spanish property will be owned

When buying a property in Spain, you need to give careful thought to how the property will be owned. This can have a number of important implications, including for tax purposes and inheritance implications. Getting this wrong could potentially cost you thousands of pounds in tax and other costs that could have been avoided with some smart planning.

There are many options – ranging from personal ownership to company ownership but there is no “one size fits all” solution that works for everybody.

Your circumstances and priorities are different from the next person. We are able to look at your circumstances and your priorities and advise you who should own the property based on that information. The solution may not necessarily be immediately obvious.

When deciding on the best form of ownership we would need to take into consideration both Spanish and UK tax and also a range of other circumstances such as your plans for the property in the future. 

We can also advise you on ‘fractional ownership’, where several people are buying a property together. This might be members of your family, friends, work colleagues or even complete strangers. Fractional ownership allows you to buy a share in the property, allowing you to get a holiday home in Spain for less while also sharing the running costs.

You may be familiar with this concept in the form of a ‘timeshare’, but while a timeshare is a type of fractional ownership, there are other options which may be better suited to your needs.

Notifying the relevant people about your Spanish property purchase

There are various organisations, including companies and official bodies you will need contact when you buy a Spanish home, including:

  • Residents Association (Comunidad de Propietarios)
  • Utility companies
  • Land Registry (Registro de la Propiedad)
  • Town Hall (Ayuntamiento)

Where required, we can assist with contacting these organisations, helping to make the process as simple and stress-free as possible for you.

Inheritance planning for Spanish property

Spain has different inheritance laws to the UK, so it is generally a good idea to make a Spanish Will in addition to your UK Will.

While you can leave a Spanish property to your chosen beneficiaries in a UK Will, this will normally significantly increase the inheritance costs to your beneficiaries and does not generally make financial sense.

We can advise you on the requirements for making a Spanish Will and help you create a clear, legally robust Will that makes your wishes clear and avoids the potential for inheritance disputes and higher costs for your loved ones in the future.

Our Spanish property legal team can also provide clear guidance on what to do if you have inherited a Spanish property.

What is included in our services for buying property in Spain

We always work on a fixed fee basis so you are able to budget effectively for your purchase from the outset. If your purchase raises substantial or unexpected problems which need to be resolved and require additional work, there may be additional charges. We would inform you before incurring this cost. However, our experience of Spanish property enables us to anticipate most issues so that we can deal with many unexpected problems without any additional charge.

Our services include:

  • Legal advice on the terms of your offer to purchase
  • Searches at the Town Hall
  • Searches at the Land Registry
  • Obtaining certificate from the Community of Owners (if appropriate)
  • Checking the legal status of the property and the seller’s right to sell
  • If appropriate, checking the guarantee provided by the vendor
  • Preparing a report on our searches and advising you on the purchase
  • Arranging the signature of the title deed
  • Arranging payment of the relevant taxes
  • Arranging registration of the property at the Land Registry
  • General hand holding and advice throughout the transaction

Common questions about buying a property in Spain

Do I need a lawyer to help me with buying in Spain?

This is the most common question we get asked. As with buying property anywhere, you take a huge risk if you try to deal with the transaction yourself without expert legal support and so we strongly advise using a lawyer to assist you when buying or selling a Spanish property.

Having a Solicitor to help you ensures the process is carried out effectively from the very beginning, All the necessary legal issues are properly dealt with, the risk of potential problems is minimised and with Judicare you have the security of using a UK Regulated and insured firm of Solicitors and you are covered by their professional indemnity insurance if something does go wrong.

When buying in a foreign country, having a Solicitor who understands the local property laws is particularly important as there are likely to be all sorts of peculiarities of those laws that you are very unlikely to be aware of.

For more information, please take a look at our guide to how to choose a lawyer when buying property abroad.

What is a Notary and why do I need one to buy Spanish property?

The Notary in Spain is important when buying a property in Spain, but they normally only get involved at the end of the transaction. They may carry out some basic checks and attend to the signature of the title deed. In some cases, they may also be involved in registering the new ownership of the property.

What a Notary won’t do is advise you on whether the contract of sale is okay to sign, whether you should pay the deposit, who should own the property and other key issues. This is where you need your own expert property lawyer in your corner.

Does it cost more to buy property in Spain than in the UK?

The total cost involved in buying a property in Spain is typically higher than in the UK. You will therefore need to factor these additional costs into your budgeting when playing a Spanish property purchase.

As a rough rule of thumb, you should budget for something in the region of 11% to 13% of the value of the property to cover the additional costs, including all legal fees, Notary fees and taxes. However, these costs do vary across the country, so we recommend speaking to our team at the stage where you are budgeting the total cost of your purchase.

If you are taking out a mortgage, the cost will be slightly higher as there are normally bank costs and extra taxes to take into consideration.

To find out more, please take a look at our guide to the costs of buying property in Spain

Will I need to pay a deposit when buying a property in Spain?

When you agree to buy a property in Spain, you may be asked to sign a reservation contract and pay a small deposit (typically around €3,000).

This doesn’t commit you to buy, but does mean the property will be taken off the market for a couple of weeks. You should always have your solicitor check the contract before signing.

You (or your lawyer) will then need to negotiate a full purchase contract. When you sign the purchase contract, you will typically around 10% deposit and then be committed to buying the property.

On a new property you may have to make stage payments throughout the course of construction.

The balance of the purchase price will need to be paid upon signature of the title deeds and registration of the change of ownership.

You may even wish to pay the balance of the purchase price in Sterling 

What is the 3% Retention Tax in Spain?

When you sell a property in Spain there is a requirement for 3% of the value of the property to be paid to the tax authorities as a retention if you are non-resident in Spain. There is a lot of misunderstanding regarding this 3%. Some people think that this is a tax on the seller. Some people think that this is an extra cost to the buyer. Some people refer to this as a Withholding Tax. None of these is correct.

For more information on 3% Retention Tax click here 

Do I need a property survey when buying a Spanish property?

We always recommend that you obtain a survey when buying a property anywhere. If you obtain a mortgage, the valuation carried out for the mortgage company will only look at whether the property is worth the amount you have negotiated. Any defects in the property which do not affect the value will not normally be shown on the report.

A proper property survey will rate the condition of all permanent structures and will highlight any important problems that could affect the property value. Depending on the survey, this may also give advice as to future maintenance.

Having a property survey should reduce the chance of discovering any nasty surprises with the condition of the property once a purchaser has bought the property. If there are any defects the survey will help the buyer negotiate the price or require certain works to be carried out before the property is purchased.

The survey may also reveal that certain works have been carried out or highlight rights that are necessary for the property which we can investigate before the property is purchased.

Why use Judicare for buying property in Spain?

Spanish Law in Plain English.

We have an experienced Spanish legal team comprising Spanish lawyers and English lawyers who have studied Spanish law. Being fluent in both Spanish and English, we can make sure no detail is missed in any contracts or other important documents or conversations, while ensure you get the guidance you need in clear English with no unnecessary legal jargon.

UK-regulated solicitors. Real peace of mind.

We are a UK based firm of Solicitors regulated by the Solicitors Regulation Authority (SRA). You can therefore have confidence that we meet the highest legal and professional standards. Being SRA regulated also means that we are required to carry professional indemnity insurance to cover claims up to £3million.

Complete understanding of both Spanish and UK law

Because we understand both sets of laws, we understand the difficulties that come when two sets of laws meet. This is particularly important when it comes to issues involving ownership, taxation and inheritance.

AIPP membership

The Association of International Property Professionals (AIPP) was set up to improve standards of professionalism in a largely unregulated overseas property market. AIPP membership offers assurance that we can provide the high standard of specialist expertise you need when buying property in another country.

Highly experienced expertise

Our Spanish team has many years of experience dealing with a whole range of legal issues with Spain. This means we know all of the common problems you can run into (and the not so common ones) and what we can do to minimise any negative impact on your purchase.

Independence

We are truly independent legal experts. We are not allowed to act for the buyer and the seller at the same time. You can therefore have total confidence that we only ever have your best interests at heart and anything advice we offer is trustworthy.

Need help buying a property in Spain?

Our UK-based team of property lawyers are highly experienced in helping clients to buy and sell property in Spain, as well as handling a whole range of related issues, such as advice on Wills and inheritance.

With a thorough understanding of both UK and Spanish law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with property in Spain.

Call: 01438 840 258                    Email: admin@judicaregroup.com