What is the property buying procedure in Spain?
Before you begin the purchase process, you will need to obtain a fiscal number (numero de identificacion de extranjeros) or NIE. The NIE is your all-purpose identification and tax number in Spain. It is mandatory for all non-residents to obtain prior to signing the Deed of Sale (Escritura).
Step 1 – Offer acceptance and preliminary negotiations
Once you’ve found your dream house and your offer has been accepted by the owner, your agent contacts the owner to initiate negotiations regarding the terms and conditions of the sale. During these negotiations, confirmation is obtained with regards to the sales price and other conditions such as renovations or maintenance works to be done to the house, furniture arrangements, selling date and more. Please note this is a non-binding process and if you decide not to continue with the purchase at this stage, you are not legally bound to do so in any way.
Step 2 – Holding deposit and pre-sales agreement
Once the buyer and the seller have agreed on the sales price and other terms and conditions of the contract, a Contrato Privado de Compraventa (preliminary sales contract) needs to be entered, stipulating the details of the property, the names of the buyer and the seller, the deposit, the agreed price and the date on or before which the contract must be completed.
At this stage we recommend to use the services of a solicitor as the contract is legally binding. We can recommend local solicitors who are experienced and practiced with the purchase of property, who speak both English and Spanish.
Once there is agreement on all the basic terms and conditions, the local market practice is to put down a holding deposit to reserve the property for an agreed period of time – normally around the 10% of the agreed sales price, to be deposited with the gestoria.
The deposit document (Contrato de Arras) includes the property particulars, price, deposit payment conditions and date of completion. Should the buyer breach the contract, the deposit is forfeited. Should the seller break the contract, they must pay the buyer twice the deposit amount, less any legal fees that may be applicable.
Step 3 – Sales contract
Before the purchase can be completed, buyers who do not hold a Spanish passport will need a Spanish tax number or NIE. This can be obtained with the help of the services of a gestoria as this saves time. On the agreed sales completion date, the balance of the purchase price plus all fees payable including notary’s fees, taxes and duties must be paid by the buyer. Payment is made by banker’s draft or bank transfer, so foreign buyers are required to set up a Spanish bank account and transfer the money from a bank in their home country.