To make the process of buying a property in Spain as stress free as possible it is always advisable to engage a Lawyer as early in the process as possible, recommendation is normal the best way of engaging a lawyer.

If you are new to the Spanish property market or the area which you are planning on buying in, many Spanish lawyer firms now advertise on the internet and you can find a selection of them in the Links section on this site.

If you are a non resident you should also consider applying for an NIE certificate at this stage, tax registration number or the NIF if you are Spanish resident, it allows you to pay the corresponding taxes in Spain. As you will be unable to complete a sale without one, your lawyer will be able to organize the paper work which you need.  Once you have decided which property you wish to buy, it’s very important that you or your lawyer check the following documentation.

Before you sign any  contract or make any kind of deposit to reserve the property:

• Ask for a simple note at the Property Registry, in order to obtain the full details of the owner, the exact size of the property, also you can check whether the property is free of charges or is otherwise subject to mortgages, restrictions on use, court orders for seizure …

If there is a mortgage on the property, make sure that the seller can justify that the payments are up to dated; otherwise the bank could seize the property.

• Check if the property is rented out; if it is rented check the type of contract as the Spanish rental law protects the tenant’s rights on long term contracts.

• For that purpose, make sure that the purchasing contract states that the house is not rented out at the moment of the sale.

• If you are buy an apartment, it is advisable to ask the President or Administrator of the community of property owners, whether the monthly community fees are paid or not, since the buyer should pay any pending fees. Notwithstanding, the seller must provide you with a certification, which shall specify that the fees payment is updated signed by the administrator of the community or president of the community of owners.

• Check the municipal real estate tax (IBI- Impuesto sobre Bienes Inmuebles) to make sure that its payment is up-to-date, and there are no out standing payments or penalties; otherwise you may have to pay the back tax and penalties.

• It is necessary to request the Tax identification code(CIF- Código de Identificación Fiscal) and the Spanish Company Register, in case the seller is a private developer. If the seller is an estate agent, he must provide you with its number of estate agent professional association

2. Taxes to pay

If you are buying a second hand property in Spain, keep in mind there are some taxes you will have to pay and that these will normal come to 10% of the purchase price:

• The transfer tax (Impuesto de Transmisiones Patrimoniales - ITP) The purchaser must pay this upon signature of the sales contract. Its value is 6 % of the purchasing price, as indicated in the sales contract.

If the purchasing price declared is much lower than the approximate market value the Tax inspectors may feel that the purchasing price is too low and you may be asked to pay a penalty to the Tax authorities. Be cautious if you are asked to pay any amount to the vendor other than the amount in the contract of sale.Your Lawyer can help you in this matter by asking the tax office what is the market value of the property that you are going to buy.

• Capital Gains tax on land (Plusvalía): This is the tax on the increase in the value of the property since the last sale: Although it must be paid by the seller, in some regions its is common practice that buyer pays it. If it is a large sum it is possible for the two parties evolved in the sale to come to an agreement, and divided the payment of the taxes between them.

 3. Fees to pay

Apart from the corresponding taxes, you should also pay the following fees:

• Notary: You must pay the notary fees when you sign the deed; these are fixed on official scale and will vary depending on the size of the property.

• Property Registry: You must pay the registration of the deed at the property registry in order that the property deed can be transferred to you. Before going to the registry, you should have paid the corresponding taxes, the receipts must be given to the Register, and otherwise you will not be allowed to complete the property registration.

 4. The sales contract. Signature of the deed

You should sign a purchase contract (Contrato de Compra-Venta) before a Notary, which shall contain the mortgage contingency, and the specifics of it: amount, rate and term, where applicable. The contract must accurately describe the property you are buying, fully identify the seller and buyer, and state that the property is free of charges...The Notary is the public official whose signature makes any contract legal. He certifies that the parties sign the contract properly. He keeps the original document in his files in case any problem could arise later. Note that the notary does not certify that all statements are true, only that the parties have sworn to them. The purchase deed must be registered with the Spanish Property Registry (Registry de la Propiedad). Once it is done, the title deed (Escritura Pública de Compra-Venta) fully assures your title: the registered contract makes you the owner of the property.The registration of the house is also important for tax purposes, the real estate tax (IBI tax ) shall be paid every year since you could be fined by the tax authorities. If you cannot be present to sign the contract, you can make a power of attorney allowing another person to sign it for you, if necessary.

You should receive the keys of your property upon signature of the contract in the presence of a Notary.

 5. Reservation of the second hand property. The "Arras agreement"

Let's suppose that you are going to purchase a property located in Spain, but you need some more time, either to assemble the money, or obtaining the mortgage to pay it, what you can do is make a reservation of the property by signing an "arras agreement".When you sign this kind of agreement, you are putting-down a deposit to keep the property, the other side of the coin is that you will lose this deposit if you don't complete the sale on the date stated in the contract, or that the vendor shall return double the amount deposited, if he was finally unable to honor the contract in the stated date. Sections of these contract, may oblige the owner to provide proof of ownership, payment of taxes, land area, or the legality of the property, its very important that when drawing up this contract you are represented by your own lawyer, do not rely on the services of any party who as any intrest in the sale of a property other than a lawyer which you have engaged your self. This deposit should not be a large proportion of  the total purchase price, but it is the price that the buyer gives to a representative of the  seller for paying the purchase option (opción de compra), since the seller could demand the full amount of the purchasing price, should you decide to  renounced to buying the property.It is advisable that the deposit should go into a blocked bonded client account held by one of the legal counsels involved in drawing up the contract and remain there until the sale is completed in a Notary’s office.

6. Builder's liability for construction defects in second hand properties

If you have problems and construction defects with your newly bought property, remember that you may take the builder, developer and the arquitect to court within 10 years of substantial completion of the home. If your home was built more than 10 years ago, you only have 6 months, after signature of the deed, to claim against the seller for the defects arisen.

The terms of guarantee for construction defects applicable to new houses, are also applicable to second hand properties where construction defects had arisen.

7. Other points to check when buying a second hand property

In order to avoid possible problems that may arise later, do not forget to check some points before buying your second hand house. You could find out afterwards that your dream house is illegally built. You will do well to have your lawyer handle the following licenses and approvals, as they know the ins and outs of the paperwork in the local area:

• Check the Partial Plan, in case the property is located within urbanization.

• If your house is near the beach, you should check if it is built in conformity with the Spanish Coastal Law.

• Check that the building license, the certificate of completion of the building and the certificate of occupancy have been issued.

• Check if there are any certificates required by the local authorities as to building safe or the maintance of buildings in the area and that your property has these certificates are held by the property.

 8. Buying a property which has no registered title

What if the property you are willing to buy does not have registered title? If you think this might not happen, you are away off base, it actually happens in Spain.These cases often occur in country houses either because the formers owners avoided registering it and paying  transfer taxes and fees, or  because the owners of the property are various family members  whose family never had registered title, or because the original owner had died without registering the property… Other things may happen: the property of your dreams can be already registered in the name of a person who no longer claims it because he sold it to someone on a private contract, and this one has never registered the sale…

If you are willing to buy a property which doesn’t have a public title deed (escritura pública de compra-venta), you may establish the title through a process called Expediente de Dominio.This is a long and complex process which requires court action, and involves publication of your claim in the National Official Gazette. You shall also file a certification at the Spanish Property Registry (Registro de la Propiedad) and the Catastro office (Oficina del Catastro), describing the state of the property and that it is not legally registered.

The Catastro Office is the Spanish official office which keeps in its files the Spanish plots description and its assessed value for tax purposes. The court's decision will determine the title of your propertyObviously this is not the best situation to find your self in when buying your dream property, but with the help of a Spanish Lawyer  who has dealt with the situation before it is possible to complete the sale and register the property in your name, though the process may take some time.