Country Buying Guides - Spain

The conveyancing process

• Independent Lawyer
It is essential to use an independent lawyer with a legal knowledge of both the English and Spanish legal systems, who are able to translate the documents and explain the terms to your full understanding.

• NIE
All residents and non-resident foreigners with financial affairs in Spain must have a foreigner’s identification number, called a Número de Identificación de Extranjero (NIE), which works as both an identification number and a social security number. Without an NIE, you won’t be able to open a bank account, arrange credit terms or use temporary employment agencies. Your NIE must be used when dealing with the Spanish tax authorities, including when paying property taxes.

• Private Contract
The first stage of closing is usually the signing of a private contract (contrato privado de compraventa) with the vendor, prior to signing the formal contract (escritura). It is common to pay a non-refundable goodwill (holding) deposit; therefore you must be certain that you wish to buy the property as this will take it off the market. Before signing any contract your lawyer will have considered all terms of the contract.

• The Notary
In Spain, some aspects of conveyancing (drawing up deeds, witnessing signatures) can only be performed by a public notary (notaio). It is your lawyer and not the Notary, however that will check the statements, the Notary is a neutral party. The job of the notario is to witness the signing of the title deeds and to ensure that state taxes are paid on completion of a sale. It’s normal for all parties to be present when the deed of sale is read, signed and witnessed by the notario, although either party can give someone a power of attorney (poder especial) to represent them

• Completion
The signing of the final deed involves signing the deed of sale, transferring legal ownership of the property and the payment of the balance of the purchase price, plus other fees such as the notario’s fees, taxes and duties. When you sign the final deed, you accept the property in its condition at that time so it’s important to inspect the property again before putting your name on the dotted line. After the signing of the escritura, the payment of the purchase price and all fees, the notary will pass the purchaser a copy (copia simple) of the escritura and the keys to the property.

• Registration
After signing the final contract, the purchase price of the property is then handed over to the vendor. Proof of this payment is then noted in the formal contract, which is then registered in the local property register.

• Costs
Notary fees are charged in accordance with a sliding scale of charges set by the Spanish government, which vary depending on the price of the property and the amount of work the notario has done to prepare the documents. Not all notaries will speak English. Stamp duty is payable in Spain, the can range depending on area, costs start from 0.5%

• Inheritance Issues
Spain has inheritance and gift tax on money received as an inheritance or as a gift, which is applicable to both residents and non-residents alike. In particular, the rules relating to foreign wills in Spain can create legal problems for your heirs, so it is easier to make a Spanish will to dispose of your Spanish assets and a separate will for assets in England. Your independent lawyer should be able to do this for you. However despite a will your estate, however will be subject to Spanish inheritance tax.

In Assocation With The International Property Law Centre LLP