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Article copyrighted © 2025. Plagiarism will be criminally prosecuted

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
1^st of May 2025

Introduction

The purpose of this article is to provide a general overview of the full legal procedure to buy resale property from a private individual. I leave for next month the procedure to buy property from developers (also known as off-plan, or new-build property).

The following article provides a basic outline of the procedure. If you are looking for concrete advice on a given matter, I highly advise you to follow the supplied links below for more details.

I have greatly abridged the procedure on purpose for ease of comprehension. However, if you fancy delving in greater detail, I advise reading (or downloading) our free Guide to Buy Property in Spain.

Resale property includes both urban and rural property. Urban property is far more expensive. Rustic property is normally riddled with legal problems which explains part of the price difference. If you are buying rural property, make sure you hire a lawyer before you sign any document! Be advised that rural property is a legal minefield in Spain. 

First stage: The Reservation Contract

After making enquiries and looking around for a resale property, you may have taken a liking to one. Properties are normally listed by property portals such as IDEALISTA, or local estate agencies. The real estate agency that has the property listed in its books will prod you to sign what is known as a reservation contract (or holding deposit), which strikes the property off the market (normally spanning 30 days).

The initial security deposit is a standard €3,000 but can be substantially more depending on the asking price (high-end properties command larger security deposits). The deposit contract is a succinct document that is normally only one page long. It has very few details, amongst them the properties’ legal details, the seller´s details, the asking price, and the 30-day reservation. The security deposit is deducted at completion from the asking price (see stage three below).

Pro-tips:

• The first thing a buyer needs to do is open a non-resident bank account. This is required to transfer the amounts for stages two and three below and also to arrange direct debits on the property and pay local taxes.
• It is strongly advised you hire an independent conveyance lawyer from the outset (prior to signing a deposit contract). On following this simple, yet essential, advice buyers stand to sidestep most blunders on buying property in Spain.
• Reservation deposits are normally non-refundable unless expressly worded otherwise.
• You, or your lawyer, need to apply for a NIE number (tax identification number for foreigners).
• An agency´s reservation deposit is a very simple document that should at no time list who pays what taxes and set out other purchase conditions. This is agreed by the parties in stage two (see below Private Purchase Contract).
• Request an Energy Performance Certificate from the estate agency. Properties with high energy efficiency ratings qualify for tax rebates of up to 20% on their local council tax (IBI tax).
• It is strongly recommended you hire a chartered surveyor to carry out a snagging list of the property; this is particularly true of older properties. If you are buying rural property, commissioning a surveyor's report beforehand is essential. This will avoid countless problems.
• Your lawyer will run a Due Diligence on the title to verify all is in order before moving on to the second stage. The title should be clean (free of charges, liens and debts). The golden rule in Spain is that debts and taxes always follow the property, not the owner. Which is why due diligence must be carried out.

Second stage: Signing a Private Purchase Contract

Before 30 days are up, you will be expected to sign what is known as a contrato de arras or Private Purchase Contract (PPC for short). In Spanish, this is also known as Contrato Privado de Compraventa. In the United Kingdom, this second stage is known as Exchanges. The PPC will be a long legal contract which will list the buyer and seller´s personal details, a full property description, the agreed sales price, the buying terms, the inventory, and the time frame to complete before a specified Spanish Notary Public. The buyer has the right to choose the notary.

Your lawyer will have normally already supplied you with a report on title, so you are perfectly aware of the legal situation of the property you want to buy before signing the private agreement.

Normally on signing a PPC you are expected to make a down payment equivalent to 10% of the purchase price, which will be deducted from the asking price upon completion (stage three, see below). The 10% down payment is non-refundable. If a seller pulls out of the sales contract - for whatever reason - he pays the buyer DOUBLE the amount of his 10% deposit.

If you need a mortgage loan to complete on the property, it is highly advisable you negotiate a reasonable time frame to secure it i.e. 45 to 60 days. This is particularly true if the borrower is a non-resident. A borrower requires an Offer in Principle (or Agreement in Principle) from his lender known as Oferta Vinculante in Spanish.

If movables are being sold along the property it is highly advisable an inventory is added to the PPC. This inventory needs to be drawn up in great detail to avoid any misunderstandings which may lead to litigation. This inventory will likewise be added to the Title Deed at the Notary Public on completion. The inventory is regarded as a contractual element which binds both parties. If the seller does not include on the sale a listed item, it will be regarded as a breach of contract. Inventories are drafted by the listing estate agent with photographs of each item plus a brief description.

Pro-tips:

• Failure to secure a mortgage loan in time may result in the loss of the 10% deposit unless expressly worded otherwise.
• If movables are being sold with the property, it is crucial that the inventory is detailed and accurate (with photographs).

Third stage: Completion

Completion is the term used to sign the Title Deed, which is witnessed by a Spanish Notary Public. Additionally, if mortgage finance is required, a second deed called a Mortgage Deed is also be signed at the notary office.

You should read carefully through the deeds before you sign anything. This is particularly true of a Mortgage Deed. Your lawyer should ensure you do not sign any abusive mortgage clauses.

At completion, you pay the balance of the asking price by banker’s draft (less the initial security deposit from stage one and the 10% from stage two). Completion is important because you take legal possession of the property, which is symbolized by being handed the house keys.

You may be surprised to find a great number of people waiting for you to sign at the notary office:

1. The seller and/or his lawyer.
2. The bank representatives (if a mortgage loan is required).
3. The estate agent
4. A translator
5. And finally, the Notary himself.

Pro-tips:

• It goes against a buyer´s best interests to under-declare part of the sales price at completion (besides being illegal). This only benefits the seller and will land the buyer with a huge Capital Gains Tax bill on selling. More on why in my article Taxes on Selling Spanish Property.
• Never agree to allow a seller to stay in your property post-completion. Even if it’s just for a “short time”. This can create massive legal problems for a buyer, which requires a full-blown court procedure that takes over a decade. This is detailed in our article: Possession: why you should never allow a seller to remain in a property post-completion.

Fourth stage: Post-Completion

Post-completion at the notary office, your lawyer will file and pay the buyer´s tax (ITP) and then lodge the title under your name at the land registry. Title registration normally takes several weeks.

Congratulations, you are now the official owner of a Spanish property. Enjoy!

You should open a Spanish bank account if you haven’t done so already. Utility companies do not accept overseas payments. You should set at least all the below as direct debits against your Spanish account:

• Utility bills (water, electricity, landline, gas, internet, etc).
• Rubbish collection tax. Paid once, or more times, a year depending on your town hall.
• IBI tax. Paid annually (akin to the UK’s Council tax). I strongly urge this tax is set up as a direct debit; failure to pay it may lead the authorities to auction off your property in a procedure which is surprisingly expedient – as in months. Whoever is the owner of a property on the 1st of January of the current year is liable to pay for this tax. This is explained in great detail in our article IBI Tax explained.

Pro-tips:

• On owning property in Spain, it is strongly recommended you make a Spanish will. This avoids your heirs a great deal of problems, saving them time, money and aggravation at a time of bereavement. Spanish wills are exclusive only to your Spanish estate. You are advised to make two wills; one in your home country and one in Spain dealing only with your Spanish estate.
• You should set as a direct debit all utilities and local taxes.
• You should set as a direct debit all local taxes on your property (such as IBI and garbage collection tax).
• On owning property as a non-resident, you should appoint fiscal representation to comply with your annual Non-Resident tax filing.
• If you plan to rent out your property as a private holiday accommodation, some regions in Spain have stringent laws on the matter – seek legal advice. ¡You may need to apply for a Tourism licence, or that you register your holiday rental home. Non-compliance attracts humongous fines.
• Resale buyers should be mindful of La Complementaria or Bargain-Hunter tax.

Associated tax and fees

As a rule of thumb, purchase costs add 8 – 13% over and above the asking price.

In some regions of Spain, this figure may be higher. Please take thorough legal advice to budget your purchase before you commit. You can read my article Taxes on buying property in Spain.

On buying resale property in Spain, buyers face the following tax and associated fees:

1. Property Transfer Tax (or ITP in Spanish)

It varies depending on the autonomous community where the property is located, ranging between 7% to 10%.

2. Fees

• Notary fees (to witness the sales deed): approx. 0.1 – 2 %
• Land Registry fees (inscription of the sales deed): approx. 0.1 – 2 %
• Mortgage & gestoría fees (if finance is required): 1 – 2 %
• Lawyer’s fees: 1 – 2 %

On selling property, almost all the above-listed items are tax-deductible. It is strongly advised that you keep hard copies of all the invoices above. This will greatly mitigate a seller’s Capital Gains Tax (19% tax rate for non-residents). More details in our taxation article: How to avoid capital gains tax when selling property in Spain.

Where to buy property in Spain?

Spain is a wonderful country that offers multiple enticing options catering to all tastes. It is not without good reason that Spain is the second tourist destination in the world!

You will be spoilt for choice: Barcelona, Costa del Sol, Granada, Madrid, Malaga, Mallorca, Seville, Sotogrande, or Valencia.

If you need a visa to stay in Spain, I advise you to read our article on the matter: Moving to Spain in 2025? Spanish visa overview.

Conclusion

Hiring a seasoned conveyance lawyer, in my experience, pays for itself with all the money you stand to save on avoiding the most common pitfalls of buying a property in Spain. Not to mention that lawyers’ fees are tax-deductible on selling the property (CGT)!

Make sure you are assisted on your house-hunting by reputable experts (such as a long-established real estate agency, a reliable mortgage broker, or a seasoned lawyer) to benefit most from the wide range of property bargains – you will be spoilt for choice.

It is important you avoid being pressurized into completion; take your time to fully assess the information you are supplied with and do not hesitate to ask any questions. Unlike in other countries, Spain has no 10-day cooling off period on buying property.

Spain is a buyer’s market now, with properties greatly appreciating year-on-year (on average by 8% and by two digits in large cities and coastal areas). At times of political and economic instability, people pile their savings in real estate, which is perceived as a safe haven.

At LNA, our team can assist you in buying (or selling) your property anywhere in Spain. Give us a call.

At Larrain Nesbitt Abogados (LNA) we have over 22 years of experience specializing in property conveyance and taxation all over Spain. We also assist clients with immigration & residency visas and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV.

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