Before you have decided on a property in Spain it is important to be fully aware of the legal process and costs involved in your property purchase. The following is intended as a guide only and in no way a substitute for professional advice.

Appointing a legal representative

Whilst it is not necessary to have a legal representative to purchase a property in Spain, it is highly recommended. They will be able to check out any outstanding debts which exist on the property as well as help with contracts and NIE numbers. You are free to appoint a legal representative of your choice or if you prefer we can recommend one.

Applying for a Bank Account

It is essential to have an NIE number for any financial dealings you may have in Spain. This is a simple, but sometimes lengthy process which involves filling in a form with your legal representative, you also need to supply a colour ‘passport’ photograph, a photocopy of your passport, the legal representative will then obtain your NIE number from the local police station. The NIE number can take anything from one week to five weeks to be obtained and we strongly recommend you to apply for one as soon as you arrive in Spain. Applying for a Bank Account
Whilst it is not necessary to have a Spanish Bank Account to purchase a property in Spain we strongly recommend it. We can help you to open an account at the bank of your choice.

Applying for a Mortgage
You can choose to apply for a mortgage in Spain or from the UK. Applying for a mortgage in Spain is a straight forward process, as in the UK. You will need to prove that you have an income or sufficient funds to pay back the mortgage. The level of mortgage offered is directly dependent on your financial status and also the declared value of the property you wish to purchase.

Documentation to be presented for mortgages:

(if employed)
1. Last three payslips
2. Last tax return (P60)
3. Bank reference to include telephone, fax number, name of manager and account number
4. Last three statements of your bank account
5. Statement of current assets and liabilities
6. Letter from employer stating length of employment & salary etc.

(if self employed)
1. Profit and loss accounts signed off by a Chartered Accountant
2. Copy of your tax return
3. Bank reference to include telephone, fax number, name of manager and account number
4. Last three statements of your bank account
5. Statement of current assets and liabilities

Purchasing a Property
When you make a decision as to the property you want to buy you will be asked to make immediate payment of a Reservation Deposit, thereby ensuring that the property is not sold to another purchaser. You will then have a period to between ten and fifteen days to exchange contracts but before doing so, you should seek property legal advice. Your legal representative must ensure that Spanish Legal requirements are met, that the property is registered in the vendor’s name and that it is free of any mortgage, charges, encumbrances, debts or other liabilities. It is customary to pay a deposit of 10% of the price on exchange of contracts, which is not normally refundable if the purchaser defaults. Conversely, if the vendor fails to perform his obligations, you will be entitled to the resolution of the contract and claim damages or either demand the obligatory fulfilment of the contract. If you are purchasing a new construction then the constructor will ask for stage payments to be made on the property. These can vary dependent on the constructor.
Finally on the day fixed for completion your legal representative will go to the Notary Public to sign the Title Deed, making the final payment to the vendor who will simultaneously pass over possession of the property to you, handing you the keys. At this stage the sale is completed. Immediately after completion the Notary will fax details of the title deed to the local Land Register to inform them of the identity of the new owner so as to prevent the property being sold twice. In this way the Notary and the Land Register act together to protect and guarantee your interests.
You will then have to pay the relevant taxes and have the original title deed submitted to the Land Register, for registration in your title. Your Legal Representative can also arrange for the transfer of your name to utilities and services such as water and electricity and organise their payment through a local bank.

Taxes
We recommend that you allow a sum of around 10% of the price of the property to cover payment of purchasing fees e.g. land registry fee, notary fees, legal fees, transfer taxes.

Annual Costs
The local town hall charge IBI which is an annual real estate tax. The previous owner is obliged to give you copies of previous bills. Community charges apply when you buy a property on a community development. These cover things like maintenance, swimming pools, gardens etc. You will also be liable for wealth tax, payable annually and based on the value of the property and a property owners income tax based on your income from the property. You should clarify these in detail with your estate agent at the point of enquiry.

Spanish Will
It is highly recommended that as a property owner you have a Spanish Will, once again your legal representative can arrange for this document to be drawn up and formally registered.