Buying property in Spain: 10 key legal and practical points every buyer should know

Purchasing a property is one of the most important decisions you will make in your lifetime. Proper preparation and understanding the differences between your home country and Spain are therefore crucial.

1. The Role of Property Professionals

Like in many countries, estate agents in Spain play an important role in helping you find the ideal property and bringing buyers and sellers together. For foreigners it’s extra important to have a independent property lawyer handle the extended legal checks and many full-service practical matters before and after the purchase. The notary formalises the title deed but is not responsible for checking the legality of the property or outstanding debts.

“Although it might be tempting to try and save on purchase costs, buyers should not rely solely on an estate agent, accountant, internet sources, AI tools, or informal advice for such a valuable investment. A qualified lawyer is the only professional in the process with a regulated profession and professional liability insurance that protects the client´s best interests”, explains Gustavo Calero, co-founder of C&D Solicitors.

2. Real estate due diligence

The lawyer needs to prepare a binding legal report for his client explaining in detail the property due diligence  carried out. Real estate due diligence must clarify relevant information and its consequences: cadastral, land registry, survey, licenses, debt status, urban planning, tourist rental possibilities, utilities, etc.

A specialised lawyer will always inform buyers about legal, administrative and fiscal risks and will send the due diligence report to you how problems can be solved before paying the 10 % deposit.

3. Differences between the Cadastre, Land Registry and Town Hall

In Spain there are two different registries for the registration of a property: the Land Registry (non-mandatory, registers rights and debt) and the Cadastre (mandatory, regulates taxes and contains visual information). Town Hall is responsible for local urban planning (PGOU), legality, licenses, etc, according to the national and regional laws. For example, in Spain, it is possible for an illegal property with a demolition order to be registered in the Land Registry.

Thinking of buying property in Spain? Get expert legal advice before you sign or pay a deposit.

A detached house in Spain

4. Reservation Contract, Private Purchase Contract and Title Deed

A Spanish property purchase usually starts with the reservation contract, a short document by the estate agent to quickly remove the property from the market during the legal investigation. Typically a reservation fee of around €5,000 is paid.

Next is the extensive private purchase contract of the lawyer to guarantee the 10% down payment and which contains all primary and secondary purchase conditions until completion.

Lastly the ownership is formalized by the signing of the public title deed at the notary, mostly done by the lawyer through a Power of Attorney.

5. Holiday Rental Regulations
If you buy your property as an investment for holiday rental, nowadays it´s important to have your lawyer check all potential limitations or extra requirement.

He should do so based on the crucial factors of: type of property (urban/rustic), legislation of the autonomous regions, potential town hall registrations, limitations by the community of owners, particle requirements (for example drinking water in the country side) and administrative obligations (official usage in the Land Registry for the national NRA inscription), etc.

6. Rural Property Purchases
In most autonomous regions of Spain, building on rural land is largely restricted. In Andalusia, for example, properties older than six years may be regularised through a DAFO certificate, which can later allow renovation licences to be granted.

Buyers should ask their lawyer to verify the costs and responsible party to pay, as these can easily range between €8,000 and €15,000 or more. Additional important considerations in rural purchases include septic tank systems and potable water supply.

Planning a property purchase in Spain? Specialist legal guidance help avoid costly mistakes

A rural property in Spain

7. New-Build Properties

The purchasing process for new developments differs significantly from resale properties and requires additional legal due diligence to protect buyers. Lawyers verify bank guarantees, payment schedules, mandatory insurance policies, town hall planning, delay conditions, mortgage possibilities and utility certificates (“boletines”) for water and electricity. Besides VAT, buyers must also consider AJD stamp duty based on the declared value in the title deed.

8. Spanish Mortgages

If you need to get a Spanish mortgage, it’s advisable to seek advice about possibilities, ALL costs and conditions before reserving a property. Be aware that mortgage approval usually is not a suspense condition in reservation contracts and rarely in private purchase contracts.

Buyers only receive a confirmed mortgage guarantee once they obtain the FEIN document from their bank, a mandatory, binding document detailing your personalised mortgage terms after approval. This means that purchase timelines may need to be adjusted accordingly. Also the valuation (one without impossible obligations) and fiscal NIE numbers should be in place as early as possible.
Also Spanish banks are more cautious with self employed buyer and income out of rental. For example, you can´t spend more than 30–35 percent of your net work income on housing costs and debts here.

9. The Cadastre Reference Value

It’s important that you’re aware of additional taxes and when buying in Spain, such as Transfer Tax (ITP). It is calculated based on the higher value between the declared purchase price and the Cadastre reference value (which differs from the normal cadastral value). Rustic properties often don´t have a Reference Value but could be subject to inspections by the Tax Office if the price seems too low. “If the extra tax amount appears unreasonable, legal advice is recommended,” Calero urges.
Before buying a home in Spain, make sure you understand the legal, tax and practical risks.

10. Inheritance Law and Inheritance Tax

Although it’s not something you want to think about, it’s important to consider what will happen to the property after you’re gone. Tailored, international, legal and fiscal advice regarding inheritance planning avoids unexpected complications for heirs.

An apartment building in Spain

11. Legal and Practical Assistance Through Power of Attorney

Beyond conducting checks on legality, debts and administrative status, a lawyer can also manage numerous practical tasks, including:

• Fiscal numbers (NIE/CIF)
• Third party services like, bank accounts, mortgages, valuations, legal translations, insurance offers, structural surveys, surveys for new build declarations and land border corrections, etc.
• Tax advice, facilitating payments (without banking costs) and KYC European compliance procedures
• Signing the notary title deed on behalf of the client
• Handling tax filings, registrations and transfer of utility contract

Buying in Spain? Independent legal advice can help foreign buyers purchase with confidence.

C&D Solicitors, Torrox (Málaga) Andalusia, specialises in property law and inheritance law on a full-service basis to foreign clients.