All the Costs, Legal Processes & More when Buying a property in Spain

Axes and Purchase Costs

Buyers should expect additional purchase costs of approximately 10% to 14% of the purchase price.

The exact amount will depend on the type of property and the region where it is located.

For second-hand properties, buyers pay transfer tax. This varies by region and may range from approximately 6% to 10%. For example, in Andalusia, the current transfer tax rate is 7%.

For new-build properties purchased from a developer, buyers usually pay 10% VAT plus stamp duty, which can range from approximately 1% to 1.5%, depending on the region.

In addition to taxes, buyers should also consider:

notary fees;
Land Registry fees;
and legal fees, which are often around 1% of the purchase price.

As a general rule, it is advisable to budget between 10% and 14% in additional costs when purchasing property in Spain.

The Role of the Notary in Spain

The Spanish notary is a public official who supervises the formal completion of the transaction.

The notary verifies that the parties appearing before them have the legal capacity and authority to sell and purchase the property.

However, the role of the notary in Spain is more limited than in some other countries.

The notary does not usually negotiate the purchase contract or carry out the full legal due diligence. These tasks are normally handled by the buyer’s lawyer.

For this reason, having an independent lawyer is essential.

Differences Between Spain and the United Kingdom

The Spanish purchase process differs significantly from the process in the United Kingdom.

In the UK, completion is normally handled directly between lawyers and does not require a public notary in the same way.

In Spain, however, the transfer of ownership is completed through a notarial title deed signed before a public notary.

This makes the notary an important part of the Spanish completion process, even though the preparatory legal work is carried out by the lawyers.

Differences Between Spain and Germany

There are also important differences between Spain and Germany.

In Germany, the notary has a much stronger role in the property purchase process. The German notary usually prepares the purchase contract, follows the procedure and carries out many of the checks.

In Spain, the lawyer prepares or reviews the private purchase contract, carries out the due diligence and negotiates the legal terms.

The Spanish notary mainly supervises specific formal aspects at completion.

Therefore, German buyers should not assume that the Spanish notary will perform the same function as a notary in Germany.

How to Make a Safe Property Purchase in Spain

A safe property purchase in Spain begins with choosing the right professionals.

First, buyers should work with a reputable and experienced real estate agency.

Second, they should appoint an independent lawyer with experience in property transactions and completions.

The lawyer should carry out a full due diligence on the property, review the contract, advise on taxes and costs, assist with anti-money laundering requirements and guide the buyer through the entire process until completion.

With a good real estate agent and a good lawyer, the process should be much safer and smoother.

Conclusion

Foreign buyers can freely purchase property in Spain, whether as individuals or through a company.

However, the Spanish purchase process has its own legal and tax requirements. Buyers should be prepared for additional costs of around 10% to 14%, depending on the property and region.

The most important protection for the buyer is a proper legal due diligence before signing any binding contract.

Because Spain does not generally rely on title insurance, the lawyer’s work is essential to ensure that the property has a clean title, no hidden debts and complies with planning and building regulations.

Anyone considering a property investment in Spain should obtain specialised legal advice from the beginning of the process in order to avoid risks and complete the purchase safely.