Guide to Buying

Purchasing Costs in Spain

Apart from the actual cost of a property, you will need to allow approximately 10% of the purchase price to cover the various fees and costs of acquiring a property.

The 10% will cover Solicitor's fees, Translation fees, Land Registry costs, Notary fees, Stamp Duty and IVA [VAT].

IVA (VAT) on new construction at 7% of the contract price (16% on land) or Transfer Tax (Stamp Duty) on re-sales at 7% of the declared value

Plus Legal Fees at 1% approximately, Notary and Land Registry Fees at 1% approximately, Title Deed Tax at 0.5% of the declared value, plus Valia tax on any increase in land value varies and may not even apply.

Reservation Contract

This is the first document you will sign reserving a property and acting as a signed receipt for any monies paid with respect to that contract. It is normally valid for 30 days to give lawyers time to carry out the necessary searches.

Legal Issues when buying a property in Spain

The solicitor will take care and assist you in all the different steps involved in the transaction. There are many excellent English-speaking solicitors in Spain. Choosing the right solicitor is your guarantee that Spanish legal requirements are met, the property is registered in the vendor's name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities. Clear everything with your solicitor. They will negotiate and discuss the purchase terms with the seller's solicitor. The terms should not be limited solely to price but should cover in detail all your requirements like the completion date, the form of payment, etc.

Notary (Notaria)

Public official appointed by the Spanish government to witness the signing of all legal public documents. They put on the public record the fact that the title deed recording the sale/purchase has been signed in their presence and understood by the parties concerned. When the Escritura (Deeds) is signed in front of the notary either the purchase price is handed over to the person selling the house or the seller confirms that the money has already been handed over. The original signed document is retained by the notary who will apply for a formal change in the land registry.

Urbanization and Community Fees

Controlled by the committee of owners and covering the running and maintenance costs of shared facilities which can include private roads, drains, lighting, private water supplies, gardens, swimming pools etc. This can be as little as 150 euros per year or as high as 1000 to 2000

Local Rates – Patrimonia

All non-residents have to pay wealth tax, 'Patrimonia', based on the amount on the Escritura Publica or the Valor Catastral, which ever is the highest value. Vary. 0.2% is typical.

Property Taxes in Spain

The local town hall charge IBI on owned Property (tax Impuesto sobre Bienes Inmuebles), which is an annual real estate tax. This local tax varies and is based on the Catastral value of the property.


Fire insurance is compulsory by law when taking out a mortgage. Comprehensive household insurance is available to protect your home and contents. Life insurance can be taken out to guarantee payment of the loan in the case of death.


The standard charge for a telephone line installation from Telefonica is around 180 Euros. The line rental and call charges are then payable every two months.

Water and Electricity

Utilities have a standing charge and the charges for consumption are in addition to this. The costs are similar to the UK and Ireland.

Tax on Rental Income

Britain and Ireland have a double taxation treaty with Spain. Tax is paid on the declared income from the property and your rental income must also be declared to the inspector of taxes in Britain or Ireland.

Numero de Identificacion Fiscal (NIE)

Foreigner's Identification Number. All non-residents require a NIE. You need to obtain this in person at the foreigners department at the National Police headquarters. Your agent will assist you with the procedure. This number is required before the purchase of any property in Spain.

Plus Valia

A local tax, usually paid by the vendor, calculated as a percentage of the difference in the increased (ratable) value of a property since it was last sold.

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