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Buying Guide

The legal information you need to know!

Once you find the property you want to buy, you will need to pay a reservation deposit. Usually a deposit of 1%, with a minimum of 3,000 EUR, is enough and this is paid by bank transfer or by credit card. This will enable the vendor to stop any further viewings with immediate effect.  Then you instruct your abogado/ lawyer to complete the legal checks, around 4 weeks is adequate. .

Your lawyer will do all the necessary searches to ensure that there are no charges against the property, that the property is legal and any new extensions to the building is registered correctly to enable the new title deed to be updated upon completion. 

In the meantime, you could open a Spanish bank account for all the future direct debits that the lawyer will set up for you with your bank. Proof of identification (passport) and a small deposit will be sufficient to do this.

Once the lawyer is satisfied that everything is in order he will prepare the private purchase contract for signature and payment of the 10% deposit (less the reservation deposit already paid). This contract will detail everything that has been agreed and include all the details of both parties, the agreed completion dates and inventory list should furniture have been included in the sale.

It will also have a compensation clause to protect both parties from changing their minds for no legal reason. This means if you the purchaser has a change of mind not to buy, you would lose any deposit paid. Should the vendors change their mind not to sell, they would have to pay back the double. This deters gazumping. You will need to transfer this deposit into either your Spanish bank account or your lawyers client account ready for payment upon the signing of this contract.

Your lawyer will advise you of the exact amount required. The balance of payment will be required for completion and this can be transferred the same way. When transferring funds, the banks will want to know where the money has come from. Proof is required and this can take time depending upon where the funds are sent from. Your lawyer will advise.

You will require a NIE number (one each if the property is to be bought in joint names). You can obtain these from the Spanish consulate in the UK, or your lawyer can make the application for you but will require a power of attorney to do so. If you are in Spain you can also do it at the main police station. It usually takes about four weeks to obtain the NIE, which is your tax identification number against which your property purchase tax of 10% will be paid. Mortgage free, cash buyers can complete without a NIE number but must obtain one soon after to enable taxes to be paid 4 weeks after completion. Best to obtain one beforehand if possible.

Spanish Embassies in the UK

You can complete the purchase yourself, with your lawyer at the Public Notary. Alternatively, you can give your lawyer power of attorney to purchase in your absence or your lawyer can temporarily sign on your behalf but this must then be ratified with him at the notary when you visit next time.

On completion, if you are buying from a non-resident, your lawyer will withhold 3% of the declared value on behalf of the vendor. This is to ensure that the vendor’s capital gains tax liability is paid. The vendors and/or their representatives will be present and the final sum of money is handed over to them in exchange for the keys to the property and the new title deed prepared by the Notary.

The property is now yours and the Notary sends official notification by fax to the Land Registry.

4 weeks after this, your lawyer will arrange for the payment of 10% tax and 2% Notary fees, land registry fees and legal fees.  This is done through your bank and the lawyer will give you the associated paperwork.

Next - What’s different about buying property in Spain

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