Today, I’ll give you an overview of buying property in Spain and answer the most common questions my clients ask.
1. How do I find the right property? It all depends on what you want to do with the property. Do you plan to rent it? Use it as a vacation home? Or live in Spain permanently?
- If you’re renting, think about who your tenants will be. A student will look for something different than a family of four.
- You can find properties through a real estate agent or by walking around the area you’re interested in, as many properties have “for sale” signs.
- If you choose an agent, ask if you have to pay their fee, and whether it’s the buyer or seller who covers it.
Before making a decision, make a list of your must-haves and things you don’t want. For example, in Madrid, a bright apartment may be nice but could get uncomfortably hot in the summer.
2. What documents should I check before buying?
- Land Registry: Make sure the seller is the rightful owner and check for any debts tied to the property.
- Taxes and Fees: Ensure there are no unpaid property taxes or community fees.
- Mortgage: If there’s a mortgage on the property, you can take it over, but carefully check the terms.
- Tenants: Find out if there are any tenants with rights to stay in the property.
- Energy Certificate: The seller must provide this certificate showing how energy-efficient the property is.
- Seller Info: If the seller is not a resident in Spain, you may need to pay 3% of the purchase price to the tax office.
3. What steps do I follow when buying a property?
- Get an NIE (only for non-Spanish residents).
- Choose the property.
- Check all important documents (land registry, taxes, etc.).
- Sign a preliminary contract (“Arras”).
- If you need a mortgage, find a bank.
- Visit the notary before signing the mortgage (this is a new requirement since 2019).
- Sign the sales contract at the notary.
- Pay the necessary taxes.
- Register as the new owner.
- Update utility information.
4. What will this cost me?
Here are some costs you should expect:
- Real estate agent’s fee
- Lawyer’s fee
- Gestoría (to handle paperwork)
- Notary fees
- Taxes (VAT or property transfer tax)
5. Example: How much will I pay to buy a flat in Madrid?
Let’s say you want to buy an apartment for €200,000. Here’s what you’ll pay in addition to the purchase price:
- Real estate agent: €6,000 (3% of the purchase price)
- Lawyer: €2,000 (1% of the purchase price)
- Gestoría: €500
- Notary: €850
- Land registry: €400
- Property transfer tax (ITP): €12,000 (6% in Madrid)
Total extra costs: €21,750, or about 11% of the price.
(These prices are approximated)
6. Are there other costs after the purchase?
Yes, there are some ongoing costs once you own the property:
- Property tax (IBI), paid yearly.
- If you’re a resident, you may need to pay income tax on rental income or even a “fictitious income” if the property is empty.
- Non-residents must pay income tax on rental income or the “fictitious income.”
This guide should help you understand the buying process in Spain, the costs involved, and the taxes you’ll face as a property owner.
Have you already found a property? Or do you need help with anything like getting a NIE or finding a lawyer? Let me know, and I’d be happy to assist!