How to Buy Spanish Property

Are you thinking of investing in a piece of sunny Spain? Would you like to know how to buy Spanish property? Read on to find out how.

Difficulty: Moderate

Instructions

Things You'll Need:

• A good lawyer

1. The first step to buying Spanish property is finding a qualified Spanish lawyer (abogado). If you don't speak Spanish, then you will need a lawyer who can communicate reasonably well in English. You will also want a lawyer who is experienced and trustworthy. A lawyer who already knows how to buy Spanish property will avoid many problems that you may not be able to avoid.

2. The lawyer will search the property registry (el registro de propriedad) for any encumbrances on the property or any problems with the title.

3. Be sure that the person who is selling the property is the same person that is listed in the registry.

4. As a foreigner you will have to register for an NIF which is a Fiscal Identification Number. You can do this at a public notary with your passport present.

5. If you are buying through a real estate developer, then you will want to investigate thoroughly their background and contact any purchasers. Some developers of Spanish property are manipulative and will exploit your position as a foreigner.

6. Another tip for buying Spanish property from a developer is checking with local municipal offices to be sure that the developer has all of the necessary permits to construct your property. The developer should already have a construction permit.

7. In some cases, you may want to give a deposit that signals your interest in purchasing the property. This is call a "señal" and is not normally reimbursed if you alter your decision to buy the Spanish property.

8. The contract is legalized when both the buyer and seller of the Spanish property appear in front of a notary (notario) and the buyer pays the owed quantity whilst the seller pays for any encumbrances. Once the public document of the property is signed by both parties and notarized, the buyer officially becomes the owner and has rights to the keys to the property.

9. Assume that acquisition costs will run 10% or so of the total cost of the property.
   
   If you are buying a Spanish property that is being resold, you will have to pay a transfer tax. If the property is being bought from a developer then you will have to pay a VAT tax.

10. The sale of the Spanish property will incur a capital gains tax (plus valia). This tax is quite high, amounting to around a third of any increase in the property's value since the last sale. You will need to negotiate who pays this tax, as the burden does not always fall on the seller. Keep in mind that by law, the burden belongs to the seller of the property.

11. Keep in mind that the seller may try to lower the declared value in order to reduce the capital gains tax. This could negatively impact any resale that you make in the future by increasing your tax burden.

12. There are additional laws that you will need to consider if the seller of the Spanish property is not a legal Spanish resident. You may need to deposit a percentage of the price of the property with the Hacienda office. Consult your lawyer if the seller is not Spanish.

13. If you don't plan on residing in the property full-time then open a local bank account so that any costs related to the property can be paid.

14. Be sure you have a will for your property that is valid in Spain. If you have a lawyer who knows how to buy Spanish property, then have him or her look over your will to be sure that it will be honored in Spain.

15. Now that you know more about how to buy a Spanish property, start looking for the Spanish property of your dreams!