Whatever your reasons for buying a property this is probably the first time that you have bought a property in Spain, or even abroad. We have put this guide together to help you understand a little more about the process of buying in Spain.
This guide is aimed at providing some basic information about buying in Spain and tries to answer the majority of the common questions that we are asked about. Although we hope that you will find it useful it is important to remember that it doesn’t cover all legal issues involved and certainly isn’t a step by step DIY guide to buying in Spain.
We have also 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.
While we hope this guide helps you to see what is involved in buying Spanish property, it is still recommended that you seek advice from a professional before proceeding. After all, as specialist Spanish property lawyers, we do this every day and have been doing so for many years and therefore know all the tricks and pitfalls that you may come across.
We also know the practical solutions to the problems that exist and also know how Spanish Law interacts with UK law, so can help to ensure you meet all of the strict requirements of both countries’ laws.
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.
Buying property in Spain FAQs
Is the legal system in Spain the same as the UK?
No, they are very different, but there is an interaction between them when you buy a property in Spain. That is why the best person to advise you on your purchase in Spain is somebody who understands both Spanish and UK law.
Do I need a lawyer to help me buy in Spain?
Surprisingly this is the most common question that we get asked. No, you don’t – just like you don’t necessarily need a lawyer when buying in the UK. However, in reality you would always use a lawyer when buying in the UK so what is so different about buying in another country where you probably don’t have experience of buying before?
For more information, please take a look at our guide to how to choose a lawyer when buying property abroad.
I have been told that I don’t need a lawyer but need a Notary. Is this true?
The Notary is important in Spain but tends only to get involved at the end of the transaction. His role is to carry out some basic checks at the end and attend to the signature of the title deed and in some cases to register the property. He doesn’t normally advise on whether the contract is OK to sign, whether you should pay the deposit, who should own the property, and so on.
I have heard that there are problems with buying property in Spain. What is the situation?
There are potential problems when buying in Spain, just like there can be in any country including the UK. Most of the potential problems that you read about can be avoided by using common sense and by instructing an independent lawyer to advise you on the purchase. We often see people with problems with their property and they invariably tell us that they didn’t use a lawyer or used the lawyer given to them by the seller or estate agent.
Are the costs more in Spain than in the UK?
Yes, the total costs of buying in Spain will typically be higher than you will be used to in the UK. It is therefore important to factor these into your budget from the beginning. Luckily property prices are currently rock bottom which not only reduces some of these costs but also makes the purchase price much cheaper.
As a rough rule of thumb you should budget for something in the region of 11% to 13% of the value of the property although the costs vary across the country. This should cover all legal fees, Notary fees, taxes and so on.
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.
Do you need to pay a deposit when buying property in Spain?
You may be asked to sign a reservation contract and pay a small deposit (typically around €3,000) to take the property off the market for a couple of weeks. This doesn’t commit you to buy but it is still worth having your solicitor to check that the contract is OK before signing. Just because a contract says “Reservation Contract” on it doesn’t mean that it is one.
After that you would work towards a full purchase contract and pay typically around 10% deposit. That contract commits you to buy the property.
On a new property you may have to make stage payments throughout the course of construction.
The balance is paid upon signature of the title deeds and registration.
Can you get a mortgage to buy property in Spain?
There are two ways of financing your purchase in Spain through a mortgage.
The first is to release equity from your UK assets to buy the property in Spain. The second is to mortgage the property in Spain. Each has advantages and disadvantages but getting it wrong can cost you dearly so take advice on this.
If you wish we can put you in contact with mortgage brokers either in the UK or in Spain. We do not receive a commission for doing so and are not tied into a particular broker – we simply recommend them because they have given our clients good service in the past.
Obtaining a mortgage in Spain is more difficult than it has been in the past. 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 is often seen as an easy way of obtaining a mortgage, but you should be aware that that 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.
Do you need a survey when buying a Spanish property?
If you are buying a property anywhere, we would always recommend that you obtain a survey. 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 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.
Do exchange rates make it more expensive to buy property in Spain?
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 know people who 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. If you would like we can put you in contact with currency dealers that we know will give you a good exchange rate and a good service.
Currency dealers 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 work with Currency Dealers who can give you a good exchange rate for your purchase and whom we have known for years. 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.
Should you use a Power of Attorney to buy property in Spain?
A Power of Attorney is a document which allows somebody to do something on your behalf.
If the title deeds are not being signed in the UK, then often clients prefer to grant a Power of Attorney to somebody to sign the title deeds on their behalf.
This has several advantages:
- You are normally busy and haven’t time to go out to Spain to sign the title deeds
- Signing title deeds is not particularly exciting and most people prefer to use their time off enjoying the property rather than signing pieces of paper
- It normally works out cheaper than you going out to Spain to sign
- You should only give a Power of Attorney to somebody that you trust as they allow that person to do things legally on your behalf
- In Spain Powers of Attorney have much wider faculties than we are used to in the UK and often have very general clauses in them “just in case”. We try and limit the Powers of Attorney down as much as possible whilst still allowing the person appointed the freedom to do what you need them to do
- We charge £200 plus tax for drafting up a 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.
What is fractional ownership?
Fractional Ownership is not a new concept and has been around for many years – although back then we called it Co-ownership.
Put simply Fractional Ownership is where several people buy a property together. This can be members of a family, friends, work colleagues or even complete strangers.
You buy a share in the property and also share the running costs.
The best Fractional Ownership schemes are those where the cost of buying is closest to the value of the actual share in the property – i.e. the ones where there are not huge margins built into the sale.
Timeshare is a type of Fractional Ownership but Fractional Ownership is not necessarily Timeshare as there are strict definitions as to what Timeshare is.
What is an NIE and when do you need it?
The NIE (Numero de Identidad de Extranjeros, which translated literally is your Foreigner’s Identity Number) is your Tax Identity Number in Spain.
There are several times when you are likely to be required to produce your NIE number;
- When you buy 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. Sometimes you have to obtain this yourself and sometimes it can be done by somebody on your behalf. We will therefore advise you how this is working and costs at the time that you contact us.
Who should own the property?
This is probably the most important decision that you can make. Getting this right can save you thousands in costs and taxes. Getting it wrong can be an expensive mistake.
The way that you would buy a property in your home country is not necessarily the best way to buy in Spain so don’t assume that you can adopt what you have done here to your purchase in Spain.
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.
For more information, please read our guide to company ownership of foreign properties.
Who do you need to inform when you buy a property in Spain?
There are various organisations, 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)
I’ve inherited a Spanish property, what do I do?
It is common for people who inherit a property in Spain to be confused about what the legal requirements are, both if they wish to keep the property or to sell it. We can advise you on your options and make sure all of the necessary issues are taken care of, allowing you to make the most out of your inheritance.
To find our more, please see our guide to inheriting a Spanish property.
Do I need to make a Spanish Will when I own property in Spain?
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.
To find our more, take a look at guide to making a Spanish Will.
Our legal fees for buying property in Spain
We charge 1% of the purchase price subject to a minimum of £1,500. If the property title is defective or unexpected additional work is required then there may be additional charges. We would inform you before incurring this cost.
Our charges 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
Other work required may include obtaining NIE numbers, signing the title deed on your behalf, transfer of utility contracts etc. which are charged extra.
Why use Judicare for buying property in Spain?
We have an experienced Spanish legal team comprising Spanish lawyers and English lawyers who have studied Spanish law.
We are UK-regulated Solicitors
We are a UK based firm of Solicitors regulated by the Solicitors Regulation Authority and who specialise in international legal issues.
We understand 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.
We are members of AIPP
The Association of International Property Professionals was set up to improve standards of professionalism in a largely unregulated overseas property market.
Our Spanish team has many years of experience dealing with a whole range of legal issues with Spain.
We speak your language
You need a lawyer who can speak your own language. More importantly you need somebody who can explain and discuss often complicated issues in terms that you understand.
We are independent. We are not allowed to act for the buyer and the seller at the same time. We are not linked with any Development Companies, Builders or Estate Agents.
Need help buying 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.