When buying a property in Spain, it is helpful to seek representation by property solicitors in Spain who can oversee every stage of the transaction for you.

This means you should apply for Power of Attorney as soon as possible, so experts like the Perez Legal Group team can help you apply for your NIE number and set up a Spanish bank account to make sure your funds are prepared. You will then be ready for us to help you:

• Pay for due diligence searches on the property 
• Sign the private contract (Contrato de Arras) to reserve the property
• Pay the deposit to confirm your reservation (typically around 10%)
• Verify that all the terms of sale are accurately represented
• Agree on a notary appointment and completion date
• Sign the public deed (Escritura Publica) at the notary’s office
• Settle any outstanding taxes (e.g. transfer tax, VAT, or withholding tax)
• Register your legal title by submitting the deed to the Land Registry
• Ensure utility accounts are also transferred to your name
• Register at the local town hall to pay ongoing property taxes

From a seller’s side of things, we can also help property owners with the preparation of necessary documents, contract negotiations, and tax management when selling a property in Spain to a buyer. Whichever side of the process you are on, you can contact our lawyers and accountants for professional assistance.

The property buying and conveyancing process in Spain takes around 6 to 12 weeks on average. Checking the property’s licences and condition can take 1 to 2 weeks, while it can take at least 4 to 6 weeks from agreeing on the purchase price to completing the sale.

The overall timeline can vary depending on factors such as the type of property and its location, whether you need to apply for a mortgage or can pay in cash, and how much negotiation is required before both parties agree on the contract terms.

Applying for an NIE certificate, opening a bank account in Spain, and appointing a Power of Attorney can also take several weeks altogether, so they should be done as soon as possible before choosing a property you would like to make an offer on. 

Ensuring that your funds are accessible, your documentation is organised, and you have a local legal representative to act for you promptly can all help to speed up the process of buying and selling properties in Spain.

There are several different taxes that buyers and sellers should be aware of when conducting property transactions in Spain. For example:

• Buyers of resale properties must pay property transfer tax – Impuesto sobre Transmisiones Patrimoniales (ITP)
• Buyers of new properties must pay VAT and Stamp Duty – Impuesto sobre el Valor Añadido (IVA) and Actos Jurídicos Documentados (AJD)
• Property sellers must pay capital gains tax on sale profits (unless they are exempt) – Impuesto sobre las Ganancias Patrimoniales (IGP)
• Property sellers may need to pay a local Plusvalía tax if the land value has increased – Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU)

Sellers may be exempt from paying capital gains tax on property sales if they are a tax resident or a resident over 65 years old who is selling their main home (which they must have lived in for at least 3 years). 

If you are a non-resident seller, not only will you have to pay this tax, but the buyer will also be required to withhold 3% of the purchase price and declare this to the tax agency. However, if the tax you owe is greater than this 3%, you may be entitled to a refund.

Buyers must also be aware of the Spanish property taxes they will become liable for as the new owner, such as Impuesto sobre Bienes Inmuebles (IBI), an annual municipal property tax (like council tax in the UK). Both non-residents and residents may also be liable for tax on any income earned from renting out property in Spain, known as Impuesto sobre la Renta de las Personas Físicas (IRPF).

Depending on the region and the value of their total assets, which includes the property value, some buyers may also have to pay an annual wealth tax – either the regional Impuesto sobre el Patrimonio (IP) or the national Impuesto Solidario a las Grandes Fortunas (ISGF).

For guidance on property taxes in Spain for buyers or sellers, and assistance with Spanish tax management – including Spanish inheritance tax for inherited properties – please contact Perez Legal Group today.