Buying property in Spain

Strong Abogados has been providing expert conveyancing and real estate advisory services since the year 2000.

We offer a comprehensive and tailored service to individuals and investment groups acquiring property in Spain, ranging from residential homes to complex real estate investments such as buildings, hotels, urban developments, and portfolios of assets.

Our service covers the entire acquisition process, from the identification and evaluation of the asset to the final closing before a notary. We work closely with our clients throughout the process, facilitating negotiations and ensuring that all legal, financial, and strategic aspects are properly aligned.

In addition to the legal process, we place strong emphasis on investment analysis. We assist our clients in assessing market conditions, financial viability, risk exposure, and expected returns, enabling informed and sustainable investment decisions.

Why hire us?

• 100% of our clients are international clients. We understand your expectations, your concerns, and the complexities of investing in Spain from abroad.
• We work with a multidisciplinary team of lawyers, architects, and economists, allowing us to provide integrated legal, technical, and financial advice.
• Our real estate lawyers handle the transaction, while our architects provide technical insight on the asset before you commit your investment.
• We do not receive commissions from banks, realtors, or construction companies. We work exclusively for the client. While a realtor or a bank may arrange a closing, a lawyer works solely in the buyer’s interest.

Our services include:

• Identification of real estate investment opportunities across Spain, coordinated from Barcelona and Tenerife.
• Legal advisory services for property acquisitions and subsequent asset restructuring.
• Economic and financial feasibility analysis of real estate investments.
• Financial management of real estate investments.
• Tax planning for the acquisition and exploitation of property assets.
• Official property appraisals certified by Spanish appraisal companies, as well as international valuations under RICS and IVSC standards.
• Energy Performance Certification.
• Licensing and permits for tourist apartment operations.
• Turnkey rehabilitation and construction projects, including design, licensing, contractor coordination, and supervision.

Property checks should always be carried out before you pay realtor fees or make any down payment.

Articles:

FAQs:

The legal steps to buying property in Spain

Once you decide which property you are going to buy, the process typically includes the following steps:

Land Registry excerpt (Nota Simple)

With this document from the Spanish Land Registry, we confirm whether the property is free of charges, whether the seller is the true owner, how the property was acquired, the boundaries, surface area, and the use of common areas, among other relevant details.

Purchase agreement / pre-agreement (Pre-contract)

This agreement sets the closing location, the date for signing the public deed before a notary, and the conditions of the sale. At this stage, the buyer typically pays a deposit (usually around 10% of the purchase price) as arras. If the buyer does not proceed with the purchase, the deposit is generally forfeited. If the seller breaches, they must generally return double the deposit.

Mortgage

If you require financing, banks will commonly request documentation such as:

• Passport / DNI / NIE
• Employment contract
• Last three payslips
• Copy of your last tax return (where applicable)
• Your pre-agreement with the seller
• Proof of payment of property tax (IBI) if available
• Information on other loans or mortgages
• Deeds and proof of ownership of assets in Spain and abroad
• Work history certificate (where applicable)
• Investment and banking documentation (funds, shares, bank accounts, etc.)
• Marital agreements (if any)
• Non-residents: a non-resident certificate (the bank can usually facilitate the process)
• Self-employed: proof of registration and recent VAT / tax filings

If the mortgage is approved, the bank will require an appraisal at the buyer’s expense. This appraisal is performed by a qualified appraiser and backed by an official appraisal company (Sociedad de Tasación). The mortgage amount is typically calculated as a percentage of the appraised value.

Signing before a notary

The purchase must be formalized in a public deed before a notary. The notary reads the deed to the parties (and to the bank’s representative if there is a mortgage). The parties must be identified, previous deeds may be required, and proof of payment of the price must be provided. Once signed by buyer and seller, the notary authorizes the deed so it can be used for tax payment and registration.

Taxes

Buyer: taxes depend on whether the property is a resale or a first transfer from a developer. For resales, the main tax is Transfer Tax (ITP) and, where applicable, Stamp Duty (AJD). For first transfers by a developer, VAT (IVA) generally applies. Tax rates vary by region, and the Canary Islands have specific rules and tax features.

Seller: sellers may have local and/or national tax obligations, including the municipal capital gains tax (plusvalía municipal), depending on the case.

Municipal capital gains tax (Plusvalía municipal)

With a copy of the deed, the seller typically files with the local city council (or the local tax office) to settle the municipal capital gains tax. The amount usually depends on factors such as the number of years the property was held and the cadastral value. As it is a local tax, procedures can vary from one municipality to another.

Property Registry

To protect your ownership rights, the deed should be registered at the corresponding Land Registry. Registration provides legal certainty and public record of ownership.

Investment example: numbers for a building acquisition

The following is an example of an investment evaluation for a building for sale in Barcelona (2013), in an area near the FC Barcelona stadium:

Property details
Surface area	365 square meters
Number of apartments	7
Purchase price	€412,000
Acquisition costs (taxes, notary, land registry)	€41,200

Rehabilitation works	Cost
Construction budget (PEM) (€1,000/m2)	€365,000
Project and site management fees (6% of PEM)	€21,900
Permit (2% of PEM)	€7,300
Contingency (5% of PEM)	€18,250
Total investment	€865,650

Financing	Cost
Equity investment	€400,000
Loan	€465,650
Interest rate	2.50%
Annual mortgage payment (20-year term incl. interest)	€30,984.00

Operating costs	Cost
Cleaning	€2,200
Utilities	€1,500
Administration	€1,800
Total annual costs	€66,000

Income
Daily rate per apartment	€140
Occupancy	60%
Estimated annual income	€214,620

Other data
Annual cash flow	€117,636
IRR over 20 years	10.66%

What if I am a non-resident? Can I file my own taxes?

If you own property in Spain as a non-resident, you may be required to appoint a fiscal representative. In practice, it is often advisable for your tax representative to handle filings, since they will also receive notifications from the Spanish Tax Agency on your behalf.

Are there any required house inspections in Spain? (Buildings over 50 years old)

Many Spanish cities require a Technical Building Inspection (ITE) for buildings older than a certain age (commonly over 50 years old, although the threshold can vary by municipality). If you are buying an older property, you should request this report, as it may impose significant renovation obligations and costs.

How can I verify whether the price I am paying is fair?

To confirm whether the purchase price is reasonable, you can commission an appraisal from an official appraiser. Official appraisers are backed by recognized appraisal entities registered with the Bank of Spain. These professionals are often qualified architects or technical architects and may also provide a report on the condition of the property, specifications, installations, urban-planning situation, and other relevant aspects for the purchase.

The most common approach is a comparative market method, establishing a market value based on similar properties and applying a value per constructed square meter to the property surface.

What other costs are involved in buying a property?

Use our expenses calculator to get an idea of the total costs involved in your purchase, as well as when you will need to pay them. The expenses calculator includes all fees and taxes generally ascribed to the buyer. Keep in mind, however, that whether the buyer or the seller pays the various fees and taxes is always negotiable. Who pays the fees should be clearly specified in the pre-agreement.

Can I avoid travelling to Spain for the closing?

Yes. You can give us power of attorney, and we will represent you at the closing.

What are some pitfalls in buying a property in Spain?

• The property is not registered, most likely because it was illegally built. Many unregistered properties are being sold to foreigners, since foreigners are less likely to check the registration. If you find a bargain, chances are it's not registered. Solution: Get a registry listing (nota simple).
• Too many brokers are involved. We once had to speak to seven brokers to find out the actual facts about a house. Besides communication difficulties, each broker may be getting their percentage. Solution: Ask the broker for their contract with the owner.
• The property was sold to more than one buyer. Yes, this happens. Either the buyer has intention to defraud, or they received a better offer and were unable to refuse. If there are two purchase agreements, the property belongs to the first person to register the property at the Property Registry. If you are the second person, then you have a right to compensation from the seller, in addition to a return of your deposit. If you signed a pre-agreement (contrato de arras), then you have a right to receive double your deposit.
• The new home is delivered late or with defects. During the 2005-2007 boom, many if not most developers were selling houses before they were built. After the closing, it was all too common that the property was completed long after the agreed-upon time period. Solution: the contract must establish a required completion deadline. If the deadline is not met, the seller agrees to return all payments that the buyer has made, including interest plus additional costs caused by the delay. If the seller is not willing to include that in the contract, you should strongly reconsider whether you want to continue. Another common case is that the new home is delivered with changes to the plan or with defects. Once the buyer has signed the contract, the developer's description and architectural plan have the value of a contract. If it is the buyer who makes changes to the plan, these should be put in writing. If the property has defects, the developer is obliged to repair them. In such cases, we recommend hiring an architect, who can help determine the importance of the defect and the cost to fix it.

How can I find out the market price of a property?

To find out the market price of a property, you should have an appraisal done. Both our property appraisal service and all others in Spain are registered and guaranteed by the Sociedad de Tasacion.

The following sites can give you an idea of the value of a property:

Sociedad de Tasacion This company certifies all appraisals done. Their site has the current price-per-square-meter of new properties sold in all the cities of Spain, as well as the change in price from the prior year.

idealista.com This large post-your-own-property site offers reports with detailed stats on used properties.

Fotocasa Another large listing of used properties for sale.

An appraisal will cost roughly 0.1% market value of the property. The appraiser uses two approaches to calculating the value of a property:

• They will measure the property to draw up a floor plan and calculate the square meters, then multiply this by the value per square meters in the area. This value then gets adjusted by a number of factors, such as whether the house can be moved into right away or needs renovation.
• They will find similar properties that have been sold in the area recently.

Since the determined value depends in part on a comparative study with other similar properties that have been sold in the area, two appraisals done on a propety could vary by up to 10%, especially if there is a lack of comparable properties sold recently.

Regarding price per square meter for apartments, make sure whether you're dealing with m2 construido (constructed space) or with m2 util (usable space). Construido includes common space: stairs, air shafts, walls, etc. The difference between the two numbers can vary widely, but on average m2 construido is 27% more than m2 util.

If you're getting a mortgage, the bank will require you to pay for an appraisal, though they choose the appraiser. This step comes after you pay the downpayment on the property, though, so if your offer is significantly higher than the appraiser's value, you'll lose this downpayment if you back out now. For that reason, you might want to pay for your own appraisal before paying the downpayment.

The seller wants the declared price to be less than what I'm actually going to pay. Should I do this?

And the broker tells you this is common practice, right? In truth, it's a known practice, but not so common. What is happening is that the seller wants to have less capital gains so they can pay fewer taxes. The problem for you as the buyer is that when you go to sell the property down the road, you will then have to pay more capital gains (unless you also find a buyer willing to make this deal). You will pay in taxes all that the current seller didn't pay. So why would anybody accept this? It's because some people in Spain have a sizeable amount of money tucked under their pillow that they never declared as earnings to the tax office. Giving this money as cash to the seller effectively launders it, and is therefore illegal. If this is not the case with you, then don't make a deal with the seller. In fact, this should be made clear in the pre-agreement, so the seller doesn't try to force in this provision a week before the closing.

What information should I get from my real estate agent?

For a new construction, you should get:

• A registry listing (nota simple) of the full plot of land.
• The CIF and full name of the construction company.
• The construction permit (licencia de obra).

For an existing house, you should get:

• A registry listing (nota simple) of the property.
• Cédula de habitabilidad and energy certification.

Are real estate agencies regulated in Spain?

There is a national registry of real estate agents -- Agente de la Propiedad Inmobiliaria (API) -- but agencies are not required to become members. In fact, many large agencies are not members. With an API agency, there are more controls. For example, there are declared fee guidelines (between 3% and 5%).

Are there any required house inspections in Spain?

In Spain, there are no required inspections, such as for excessive radon levels, termite damage, or structural damage. However, most cities in Spain have approved a regulation to require inspections for all buildings over 50 years old (the required age may vary depending on the city). So when you buy an older apartment or house, you should request this report, since the report may prescribe costly renovation work that must be performed on the building within a certain time frame.

The Technical Building Inspection (ITE) in Spain.

When you buy a property, the bank performing the mortgage will always ask for a standard property appraisal. This appraisal does not include property surveying. If you would like a property survey, please see our property survey service.

Can you represent me for the sale of my property in Spain?

Yes. Please see our information about buying a property, because most of it is relevant to you as a seller. As a seller, you have specific obligations. It is essential for you to know these and comply with them. Strong Abogados will inform you about them, particularly those relating to taxes. If you are a non-resident and a retainer was withheld from you for taxes, you may be able to recoup part of this payment by filing the forms. This retainer is a consequence of the seller's obligation to pay tax on revenue obtained in Spain.