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Buyers Guide - Alhambra Villas - Houses for Sale in Spain

How to purchase a Property in Spain

All foreign investors in Spanish property should know that, in order to make a safe investment, a preliminary search in the relevant Land Registry and verification of local planning permissions, is of paramount importance.

These prior searches are aimed at ensuring that the prospective seller has good title to transfer the property and that the property itself is not subject to any charges, encumbrances or tenants.

Unfortunately, it is too often the case that documents agreeing to purchase or pay a deposit are entered into before such issues have been checked by a legal advisor, thus triggering undesired consequences.

Once prior searches prove satisfactory, any purchase and sale agreement must be formalised by means of a notarial deed signed before a Spanish Public Notary. This is the only way which allows a purchase to be registered in the Land Registry.

Accordingly, it is very much in the best interests of the foreign purchaser to instruct Spanish lawyers to act on their behalf in order to ensure that all searches are properly done, that all relevant documents are correctly drafted, that the notarial deed of purchase is finally duly registered with the relevant Land Registry and that the change of name for the purposes of local taxation (Impuesto sobre Bienes Inmuebles) is completed.


Whenever a foreign individual purchases a property in Spain, considering whether a separate Spanish will should be made covering such property is also advisable in order that the property can pass to his/her heirs without difficulty.

Foreign individuals owning Spanish property are subject to Spanish Income and Wealth Tax in relation to such property, needing to file the appropriate tax returns on a yearly basis.

When the purchaser is a foreign company, GEBI (a specific tax charged to such foreign companies) will generally be applied instead of Spanish Income or Wealth Tax. GEBI is levied at 3% on the value assigned to the property by the local authorities. In certain circumstances, exemptions from this tax may be obtained.

Wise purchasers: 10 basic steps before buying property in Spain

Buying a property abroad is not like buying a pair of trousers. Ten basic steps purchasers should take before signing or paying anything are:

  1. Obtain an updated search (Nota Simple) from the relevant Land Registry in order to verify that the owner is duly registered as such and that the property is not subject to any debts, encumbrances or tenants. This essential search will also show whether the official description of features, sizes and boundaries matches reality.
  2. Find out how long the present owner has had the property and what price he/she paid for it. If, for example, the property was acquired last month for euros 120,000 and is now on offer for euros 300,000 (or vice versa), find out why and get immediate advice from your lawyer.
  3. Obtain information about the prices of similar properties in the same area.
  4. If the owner is a company, obtain a search from the Commercial Registry to find if the company is solvent and identify the person who can sign on behalf of the company Your lawyer can handle this for you).
  5. If it is a recently built home or major improvements are intended, check with the local Town Hall that the necessary permits have -or will – be granted.
  6. Find out whether the owner has any pending debts concerning local taxes (IBI). To start with, ask to see a copy of the last payment receipt. If it is a condominium, find out whether there are any community charges unpaid.
  7. Do not accept that any deposit must be a specific percentage of the price. Everything is negotiable.
  8. Only pay a deposit to the registered owner who is selling the property, or a person who has a power of attorney to receive such a sum (no to any intermediary) and make sure that a signed and properly drawn document is obtained as evidence of such payment.
  9. Play it safe by using your lawyer to review that document and any others to be signed in connection with the purchase.
  10. Finally, it is essential that the purchase be noted in a title deed (Escritura) signed before a public notary that can be registered in the Land Registry. Once the deed is signed, the registration process should be completed as soon as possible.

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