How to buy in Spain

Polarius International Real Estate is here to guide you through the process of buying your dream property in sunny Spain.

Purchasing a property in Spain is not unlike any other country, but there are peculiarities to the Spanish legal system and key stages along the way which need to be completed before you can call any casa your own home.

What you need to know as a Foreign Buyer

First of all, as with buying in any country, you need to know your budget. In order to find your ideal property, you must establish how much money you have to work with (whether cash or with a mortgage) to avoid any disappointment.

Once your budget is established, you can commence viewings, which is where Polarius International Real Estate is here to help. As Agents and Search Agents, we will manage your search, show you a selection of our properties, or scour the market for your perfect property through our extensive and exclusive network.

The Point of Offer

So you’ve found your dream property, and now it’s time to make an offer. Understanding the wider details of the property’s history through your agent is important. Knowing how long the property has been for sale for, or what the vendor’s situation and motivation is, will help determine what level of offer you should be making or whether there is a willingness for the vendor to accept anything less than the asking price.

The Foreign Identification Number – NIE

First things first, if you are interested in buying a property in Spain you will need to apply for a NIE number. This is your individual Spanish tax identification number. All foreigners must obtain this before being able to buy property in Spain. Depending on whether you live in the EU or not will determine the type of NIE to apply for – temporary, resident or non-resident. You can apply for a NIE at any local police station in Spain. You will need your passport or an identity document.

Once the NIE has been processed - this should take no longer than a few days - the next step would be to apply to open a bank current account in Spain. This will make the whole process of purchasing a property much simpler and smoother for all concerned.

Once you have found the property of your dreams it is also advisable to hire a suitable independent bilingual lawyer – look for an Abogado who specialises in property - to handle the sale for you. Allow 1-2% of the total property price for this element.

The Reservation Contract – Documento de Reserva

Once you are ready to make an offer you will first be required to sign a reservation contract – Documento de Reserva. A small percentage of the property price – allow 3,000 to 6,000 Euro -is payable to secure the property and to remove it from the market for usually 30 days. The deposit counts towards the final price of the property.

Your lawyer will need to ensure this payment is safe and held with a reliable third party and certain conditions are also in place to legally exit the contract if needed as the deposit amount is normally non-refundable.

Once the reservation contract is signed you usually have a 90-day period to seek financing, if required, and conduct all due diligence. Your lawyer will assist you with this process.

It is at this time that important items as outstanding seller debts are clarified. Any new owner in Spain will be liable for any debts, such as mortgage arrears or local taxes, not paid by the seller in advance of the final signing.

You are also advised to hire an architect to do a report on the structure of the property and look at any potential planning issues.

The Pre-Sales Agreement – Contrato de Arras Penitenciales

Should your offer be accepted and due diligence completed you will need to then sign and pay the pre-sales agreement – Contrato de Arras Penitenciales. This is fixed across Spain at 10% of the property purchase price and must be paid within 10 days.

Once paid the seller is obliged to sell the property to you. However, in the event you decide to pull out after signature this amount is forfeited. On the other hand, should the buyer pull out they must pay you 20% of the total property price.

You should only sign a deposit contract once you have done the necessary due diligence and been given the all clear from the you lawyer, as you may lose your entire deposit if any problems subsequently emerge.

The Final Sales Contract – Escritura de Compraventa

Once both yourself, your lawyer and seller are happy, the final sales contract – Escritura de Compraventa - can be signed by both the purchaser and the seller in the presence of a notary. At this point the agreed sum is paid and the property registered in your name.

The final contract will state the property is free from all charges with no outstanding debts and that the seller is handing over the property empty with no sitting tenants.

You will also need to complete the necessary forms for the payment of the property transfer taxes and stamp duty. Allow between 6-10% of the property price for the property transfer tax; another 1-2.5% for the notary fees, land registration fee and title deed tax. Our agency fees will also need to be added to the total.

The buying process can take up to 3 months from start to finish, but could take longer should financing be required.

This will all be a distant memory once the house keys and a chilled glass of cava are in hand.