FREQUENTLY ASKED QUESTIONS

What fees and taxes are involved in buying a property in Spain?

As a general guide the fees and taxes involved in buying a property in Spain amount to about 10% of the purchase price of the property so it is important to bear this in mind when you are determining your budget.
The biggest fee will probably be the VAT or transfer tax on the property you are buying which is charged at 7% (IVA as it is called in Spain). When you buy a property in Spain it also incurs stamp duty of 0.5%. The lawyer dealing with your purchase will charge you 1% of the sale price. All property sales have to go before a Spanish notary who will charge approximately 1% of the sale price. This is payable at the point of signing the purchase agreement. There is also a property registration fee to pay and this is approximately 40-50% of the notary’s fee.

How can I get a mortgage?

With the introduction of the Euro, both residents and non-residents can now obtain loans and mortgages against a Spanish Property. With inflation at an all-time low in Spain, Spanish bank mortgages are now being offered at low rates compared to the rest of Europe. Mortgages of 20 and 30 years, and mortgages of 90% of the property value, are available in Spain. For a non-resident buyer, the mortgage is usually limited to around 70% of the property valuation. Interest only mortgages are also available, as are a wide range of other products to suit specific needs of the buyers. Getting a mortgage is usually quite straightforward: the bank will require your income documents, bank statements that show the income being deposited on a regular basis, and a yearly tax return statement. That is it in a nutshell, though some banks may require additional paperwork.

What is a notary?

A notary checks that the title deeds and all documentation relevant to the purchase of your property in Spain are in order before the final payment is made and the purchase document is signed. He then sends these to the local Land Registry Office and the final registration normally takes around 2 months. Note that although you may choose any notary to carry out these tasks, it is a public office and as such it makes no difference which notary you use.

What does a Spanish lawyer do?

• Review the seller’s title deed
• Review a recent nota simple
• Review the full catastral certification document
• If buying in an urbanisation, checks the plan of building plots
• If buying a plot checks that building is a legal possibility
• Review the IBI receipt or the declaration of new construction
• Review the community charge receipt and the statutes if buying in a communally owned development
• Review the sellers utilities receipts
• Sign the escritura de compraventa in the presence of a notario
• Pay the required fees and taxes
• Establish how and when you will receive the escritura publica making you the legal owner
• Take care of the setup of water, electricity and other utilities. 

Can I open a Spanish bank account?

Normally all that is needed to open a Spanish bank account is a passport and a small deposit to go into the account. Most banks have English speaking staff to help you. Some banks may require clients to have a NIE number, which is a fiscal identification number required from everyone in Spain who wishes to make any type of purchase.

What are community fees?

These apply to properties that share benefits e.g. swimming pool, gardens, security, general maintenance. There is a committee with a president who are voted for by the property owners once a year. The price of the community fees depends on both the shared benefits and the number of residences sharing them. It also depends on the size of your property...the large your property, the bigger share of the community costs you have to bear. In general the community fees ensure that the grounds and exterior of the buildings are maintained to a good standard.

Do I need to speak Spanish if I live in Spain?

It is obviously a good idea to learn Spanish to fully enjoy the Spanish culture. There are numerous language schools scattered throughout the area which enable you to learn Spanish at a pace that suits you. Learning the language will be essential if you are planning to live anywhere OUTSIDE the popular tourist areas, but otherwise you can get by most of the time without it. There are numerous international schools, multi lingual radio stations and locally printed international papers widely available. As more and more people from all over the world make this their home, it is getting easier than ever to get by using English to communicate.