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 Questions and Answers  

Frequently asked questions


If you are planning to buy a property in Spain you can feel overwhelmed with choice. For optimum investment it is important get the right answers for all your questions. The following FAQ guide offers a range of frequently asked questions.









What is the process of buying a property in Spain

As we have previously mentioned, historically, the property market in Spain was slow. We did not have the tradition of often moving house and trading up to a bigger property, which meant that property inflation was very low. Our inheritance laws meant that property would always be left to the children and it was common for several generations to be born and to die in the same house. When we did want to sell we would probably sell the property ourselves and with the purchaser, go to the Notary and to register the documents. Because everyone probably knew each other or were related, this process worked. If an Estate Agent (inmobiliaria) was used, they would perform the conveyance duties and ensure the transfer or the deeds. A Lawyer was not usually needed. Today it is totally different.

Once the deposit agreement has been signed, Spain Property in cooperation with your lawyer, the private sales purchase contract will be prepared in both English and Spanish. You should be aware of the following:
  • The English version is a translation from the Spanish version. However, under the Law it is the Spanish version that will be used in any court action.
  • The vendor will normally hold the 10% deposit paid at the signing of the private sales purchase contract, not the lawyers of either the vendor or the buyer. Therefore, it is not recommended to leave a long period of time between the signing of the contract and the signing of the deeds.
  • The information that should appear in the contract is as follows:
    1. Name, address, passport number, and Spanish identification number of the buyer, vendor and the lawyers who sign the contract in representation of their clients
    2. Description of the property and the details of the inscription in the Land Registry
    3. Any debt or charge attached to the property
    4. If the property is sold furnished, then an inventory should be attached
    5. Price and form of payment
    6. Place and time of the signing of the public sales purchase deeds

Keep in Mind:

  • The vendor will hand over to the buyers, the possession of the property at the time of signing the public deed at the Notary Office. (To save our clients flying to Spain to physically sign we can arrange a Power of Attorney to sign on their behalf. This can save clients time and expense as completion dates often change!).
  • Under article 1504 of the Civil Code and 59 of the Regulations of the Mortgage Law, if the sale is not completed by the purchasers, the contract will be cancelled. Once the vendor has served a notarial summons on the buyer, the vendor can then retain the full amount of the deposit as compensation.
  • Conversely, under article 1454 of the Civil Code, if the vendor does not complete then a full refund of the deposit must be made to the purchaser, together with an identical amount as compensation.
  • Both parties expressly renounce any other law which may apply to them, expressly submitting themselves to the Courts or Tribunal of the town or city where the property is situated.
  • The purchase is completed at the Notary where the public deeds are signed before the Notary Public, the purchase price is paid to the vendor and the keys to the property are handed over to the buyer.

Spain Property can arrange for the payment the taxes (ie VAT, transfer tax or stamp duty which must be made within thirty days from the signing of the deeds at the Notary) as well as direct debits for annual taxes, such as the local rates or IBI.

We can also apply for the connection of utilities. This can be a bureaucratic process, as we have to present all the correct documentation to each of the respective companies and can take up to 2 weeks to get the electricity, water, gas or telephone connected.

Once the deeds are included in the data bank at the Notary office they have to be inscribed at the Land Registry. The registration can take anything from two weeks to three months depending on the Registry. The Land Registry fees are paid on collection of the deeds.

If the property is a new build the costs involved will be:

  1. Bank opening mortgage fee (around 1%-1.50 % of the mortgage amount).
  2. VAT 7%. (Impuesto sobre el valor añadido/ IVA).
  3. Stamp duty (Impuesto de Actos Jurídicos Documentados) 1% of the price of the property. Only to be paid for property subject to VAT payments (new properties).
  4. Stamp duty (Impuesto de Actos Jurídicos Documentados) 1% of the mortgage responsibility amount.
  5. Notary and Registry on the mortgage: These fees vary depending on the guaranteed capital of the mortgage.
  6. Notary and Land Register fees on the purchase.
  7. Agency 'Gestoria' fees. The bank use an agent to make sure the property and the mortgage are inscribed at the land register.
  8. Insurance: The banks normally require the borrower to take out insurance to protect its interest until the loan is repaid.

If the property is resale then the costs are the same except that you do not have to pay the Stamp duty (Impuesto de Actos Jurídicos Documentados) at 1% of the property price or 7% VAT but instead you have to pay 7% as Transfer tax.


What is an NIE and where do I get it

A NIE is a Numero Identificacion de Extranjero or a foreigner’s identification number. You must have one of these to buy any property or a car in Spain. It is relatively easy to obtain but the process can be long as you have to go to the foreigners department of the local police station and queue. You will need to complete a form and after a few days you can go to collect the number. In some instances you will only need to give the number but when buying a property you will need the original. Obtaining the NIE is included in our fees when purchasing through Spain Property.

Do I need to come to Spain to sign any papers

There is no reason for you to come to Spain to sign anything if you give your Lawyer a Power of Attorney. The POA can be sent to you in England and once signed and given an apostille, it can be used for the signing of public documents.

Is it necessary to sign over a Power of Attorney

You do not have to sign a POA but it is strongly advisable to do so. You may believe that you will be able to travel to sign the deeds for your new property, but there is always the unforeseen: Your money may not arrive in time, your plane may be delayed, the vendor may have problems arriving at the Notary, the Notary may be off sick, there are numerous reasons why the signing might not take place on the agreed date. If your lawyer has a power of attorney, then they can reschedule the signing. The POA will also allow them to apply for your NIE number, check the property register, register the property in the Land Registry, pay taxes, open a bank account, and deal with the utility companies.

What is a Notary

A Notary Public is the person whose signature and stamp make statements legal. He will not certify that the said statements are true, only that the people signing the statements agree to them and therefore it is official. Once he signs a document then it is stored in the official data bank, he is not the same as a Solicitor and will not be looking after your interests.

How do I take out an insurance policy on my property

Ved forsikringer der tegnes for hus kræver forsikringsselskaberne visse sikkerhedsforanstaltninger. Som minimum sikkerhedsdør (puerta blindada) og gitter (rejas) for vinduerne, hvis der ikke er gitter så kræves der tyverisikret glas (cristal antirobo) eller alarm. Disse sikkerhedsforanstaltninger gælder også for rækkehuse, lejligheder i stueetagen og nogle selskaber forlanger det også for taglejligheder.



If I buy a property what taxes will I have to pay

  • Re-sale purchase tax: House buyers of re-sale property (as opposed to brand new) are required to pay the Impuesto de Transferencia de Propiedad - Transfer Tax - which is now 7%.
  • New Properties purchase tax: buyers of brand new houses in Spain are liable to paying 7% IVA (VAT) if the house is finished or is being built at the time of the purchase, plus an extra 0.5% stamp duty. However, if you buy land in Spain, commercial premises or parking spaces in garages, then the VAT payable rises to 16%.

If I sell what are the Capital Gains Tax implications

Residents over 65 years of age and who have lived in the property for more than 3 years are not subject at all to capital gains tax when they sell the property. Residents and non-residents, including those over 65 years of age, living in the property for less than 3 years are liable for a maximum of 18% capital gains tax. Residents are exempt to the first 108,000 euros of the valuation for wealth tax; non-residents are liable from the beginning.

Am I liable for Inheritance or gift taxes

Yes, you are. Generally, foreign people will only pay inheritance tax on the assets left in Spain. Be aware, however, that the estate value may also have to be included in the deceased person's estate in their home country, with any tax paid in Spain reducing that tax payable by the existence of any double taxation agreement. The tax schedules are the same for inheritance and gifts, and remember it is the person who receives the inheritance that has to pay the tax.

What Tax planning should I be considering

There are various ways in which tax can be mitigated by tax planning. As circumstances vary it would be prudent to seek the he advice of a professional financial adviser. In the case of a husband and wife they may be able to take advantage of the 95% deduction applicable to the principle residence and where the beneficiaries are directly related. This deduction is limited to €122,606.47 each person. The only provision is that the property is not sold for 10 years.


I plan to live in Spain for more than 6 months

The current Spanish law states any individual intending to remain in Spain longer than 183 days in any one period throughout the calendar year, should apply for a ‘Residencia’. (A Spanish tax year is the same as a calendar year: 1st January to 31st December, unlike the UK tax year which is from 6th April to the following 5th April.). If you are resident in Spain you will be liable for income, capitals gains and succession duty (inheritance tax) on your worldwide assets. It is also very important to remember that once you have obtained your ‘Residencia’, you should exchange your British Driving Licence for a Spanish Licence.

Can I get free prescription drugs as non resident pensioner

Yes you can. You will need an EHIC (European health insurance card) which replaces the E111. You can apply online at www.ukehic.com. You will have to complete a form: BDU solicitud de uso multiple. You will have to say where you live in England, your address in Spain and for how long you will be needing the drugs. It is always a good idea to show the packets of the drugs that you normally take to the doctor and your English prescriptions.


Is it necessary to have a Spanish Will

Yes, because if you haven’t already done so you run the risk of your heirs losing their rights to your assets if they do not claim their inheritance in time, or if your last will and testament do not appear in the Central Registry of Wills in Madrid. Under Art. 9.8 of the Spanish Civil code: Inheritance by cause of death will be regulated by the National law of the deceased in question, at the time of their death, whatever the nature of their possessions and whatever country they may be in. >

When should I make this Will

Ask your lawyer at the time you are buying your property in Spain.

Who can make a Will for me in Spain

There are many English speaking lawyers in Spain. Spain Property can thoroughly recommend lawyers where you will receive the best professional counselling.


How easy is it to get a mortgage in Spain

If you decide to take out a mortgage in Spain, we can help you look for the best deal by contacting several banks in the area. In Spain there are good mortgage rates and some banks have special products designed for non-resident borrowers. The bank will send a surveyor to the property to value it. The surveyors bill will be around 500-600 € for a property valued at around 200.000 €, although these costs are variable. The bank will lend a percentage of the value of the property, normally around 70%, although they could go up to around 80% in some cases. The bank will ask for the following information and documentation: a photocopy of your passport, home address, marital status, a copy of your last P60, the last three salary receipts, a copy of the contract with the builder or the vendor which shows the purchase price.


Do I really need insurance in Spain

Yes, this is an area often overlooked by some buyers. Once the property is purchased then it is prudent to find insurance from a reputable company at the best price. Contact Spain Property, and we can help you to find quotations.


Can I bring my vintage car to Spain

Yes, you can, but for tax implications it will be better if you ask your lawyer for a quotation. Spain Property can recommend a suitable adviser in this matter.

Can I import my speed boat to Spain

Yes, you can, but for tax implications it will be better if you ask your lawyer for a quotation. Spain Property can recommend you a suitable adviser, in this matter also.

Do I have to be a resident to buy a car

No you do not, but you do need an NIE number.

What documents must I have in the car

  • Driving licence (the Driving Regulations in Spain allow non-residents to drive in Spain on a foreign driving licence for a maximum period of 6 months in a year).
  • Insurance policy (original documentation) and payment receipt.
  • Registration documents.
  • Road Tax receipt (it is paid to the local government once a year per vehicle; you can set up a direct debit from your bank account). More information can be obtained from the town hall where the vehicle is registered. (See the last bill or the registration documents if you did not receive the receipt at your home address).
  • ITV card (technical vehicle inspection or MOT). All cars, vans and motorcycles require an inspection according to the age and the use of the vehicles.


What law applies if we separate, English or Spanish

In most cases it is Spanish law which applies.

Can I get divorced in Spain

Yes. In accordance to Spanish law, the Spanish Courts and Tribunals are competent in matters of personal and patrimonial relations between couples, marriage annulment, separation and divorce, when both parties reside in Spain, or at least one, at the time of placing the demand for separation/divorce. Various Spanish Tribunals have confirmed this right in their resolutions, based on articles 24 and 13 of the Spanish Constitution, article 27 of the Civil Code and articles 6,8,14 of the European Convention for the protection of Human rights and fundamental freedom.


Do I need a work permit to work in Spain

Not if you are from a country of the EEA (European Economic Area - EU, Norway, Liechtenstein, and Iceland).

Can I employ someone outside the EEC

You cannot employ someone from outside the EEC if they do not have a work permit. The procedure to get the permit is long and complicated, please contact Spain Property.


Is it advisable to set up a company in Spain

As in the UK the decision to form a company will depend on various factors such as turnover, risk etc. As in the UK a member of the company enjoys limited liability, however, unlike the UK formation costs are high and this requires careful consideration.

How can I set up a company

Any person or legal entity has the right to form a limited company as a founder member. The society of limited responsibility is formed by the members with a public deed, certified by a Notary. The information that the constitution has to contain:
  • The formal identity of the members
  • The decision to form a limited society
  • The contribution of each member
  • The statutes of the society
  • The system of administration
  • The identification of the person who will administer and represent the company

The articles of association should mention the following points: the name of the limited company, social objectives, date of closure, business address, system of administration of the company. The constitution of a limited society generates the obligation to pay taxes, one per cent of the society capital. The minimum capital to form a limited society is 3.005,06 €. The minimum number of members is one and there is no maximum.



While all cases are different, the process of litigation in Spain can be slow and expensive and where possible, we we recommend that disputes should be negotiated and settled out of court or alternatively consult a legal adviser.



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