When buying a property in Spain, one has to allow for costs and fees amounting to approximately 10% - 11% of the purchase price. 7% of this is VAT (if a new property) or 7% property transfer tax (if a resale property) and the rest is solicitor's fees (normally 1% + VAT), Stamp Duty (if a new property), Property Register and Notary Fees.

Be careful

Some real estate agencies offer Free Legal Advice which may seem tempting to save the extra costs of appointing a solicitor. But remember, a real estate agent is not a solicitor, nor is a real estate agent legally responsible for any misrepresentation or erroneous statements. A real estate agent can help you to find the right property, negotiate the price and perhaps even the conditions, educate you on the local area and amenities and should have a good grasp of the law relating to real estate in Spain but should not under any circumstances replace a lawyer in the purchase process.

Ask yourself this question: Would you ever buy or sell a property in your home country without appointing a solicitor or a property conveyancer? Almost certainly not! The cost of appointing a solicitor is 1% of the purchase price, and is probably the best investment you can make in relation to your purchase of a property in Spain. We obviously know the Spanish real estate law and can guide and advise you on pitfalls and how to reduce certain costs related to the property purchase, but we will insist that all of our clients appoint a solicitor to obtain unbiased and independent third party advice.

Choosing a Solicitor for your purchase

The choice of solicitor is yours. You can find some Spanish / Costa del Sol solicitors listed here: English speaking Spanish solicitors in Spain.

Below is some Spanish legal advice on buying property in Spain:

1. Instruct a lawyer with experience of the Spanish legal system to act on your behalf. Speak to such a lawyer before you commit yourself to buy.

2. Open a bank account in Spain. This is usually straightforward and your agent or lawyer will be able to assist.

3. Be prepared to pay a reservation deposit (usually by credit card and often 3,000 or 6,000 euros) when reserving and agreeing terms for the property. This will normally be non-refundable but will have the effect of taking the property off the market.

4. Be aware of the taxes and costs payable in addition to the purchase price. Ask your lawyer to provide you with details. Remember that taxes and costs will add approximately 10 – 11% to the purchase price or slightly more when you are taking out a mortgage loan in Spain.

5. At the same time obtain from your lawyer an indication of likely ongoing annual taxes and expenses, for example rates (IBI) and community charges.

6. When buying a property in the course of construction, where completion will often be many months ahead, speak to a foreign currency dealer about “forward buying” euros in order to avoid the risk of adverse currency fluctuations.

7. A Land Registry search will check that the seller owns the property and that there are no ongoing mortgages or encumbrances which you may find yourself responsible for.

8. Enquiries at the local Town Hall will determine the planning zoning and status of the property (and the overall development where applicable) and check that necessary building licences have been granted.

9. If buying an existing property (resale property), insist on a detailed inventory if furniture is included in the sale.

10. Your lawyer will advise you in whose name or names the property should be bought, for example, sole name or joint names, in the names of the children, or in the name of a company with, perhaps, shares held by trustees or by a company resident outside Spain. This aspect can have important tax implications in Spain, in particular with regard to Inheritance Tax.

11. Usually a Contract of Sale (contrato privado de compraventa) will be signed, once searches and enquiries are completed, and at that point a 10% deposit will normally be paid.

12. When buying a property in the course of construction, check that a specification, showing what is included in the purchase and if possible details of construction, is attached to the Contract and insist on these documents being provided in English.

13. It is vital that your deposit, and any subsequent stage payments, are covered by a bank guarantee or insurance policy to protect you in the unlikely event of the property not being built or the developer going bust.

14. It is normally advisable to grant a Power of Attorney to your lawyer or other local representative to avoid the necessity for you to attend the Notary appointment on completion (see 17 below).

15. You will require a foreigner’s tax identification number (known as an NIE number) and again your lawyer will determine for you the best way of applying for this.

16. Try and arrange to have the property inspected before completion – if a new property, check for snagging items; if a resale, ensure that all the relevant furniture has been left.

17. After a final check of the title and the grant of the necessary Licence of First Occupation (for a new property), your lawyer will attend the completion appointment at a local Notary’s office. There the title transfer deed (Escritura de Compraventa) will be checked and signed, the final purchase money paid over and the keys released.

18. Following completion, your lawyer will ensure that the relevant taxes and duties are paid and your title is duly registered at the local Land Registry.

19. Make a Will in Spain to deal with your Spanish property and add a Codicil to your UK Will to exclude the Spanish property. Thereafter if you make a new Will in the UK at a later date, be careful not to revoke the Spanish Will unintentionally by failing to refer to it.

20. Appoint a fiscal representative in Spain to prepare and lodge the annual tax forms which will be required.

N.B. The Spanish legal advice above is provided purely as advice for buying a property in Spain, it is not in anyway whatsoever intended as a replacement for seeking appropriate independent Spanish legal advice from a lawyer.