Spanish property conveyancing refers to the legal process involved in buying or selling property in Spain. As an expat or foreign national, it’s important to understand that the conveyancing process in Spain can differ from what you might be used to in your home country. Here’s a detailed guide to help you navigate the process of buying or selling property in Spain, whether you’re a first-time buyer or experienced investor.

1. Key Steps in Spanish Property Conveyancing

Step 1: Get a Spanish Gestor or Lawyer

While not mandatory, it’s highly advisable to hire an independent Spanish lawyer (abogado) who specializes in property law to help you navigate the process. The lawyer’s role is to ensure the transaction is legally sound, protect your interests, and make sure all paperwork is in order.

• The lawyer will review the property documents, ensure there are no debts or legal issues, and check the property’s title.
• They will also handle negotiations and ensure that the contracts comply with Spanish law.

Step 2: Obtain an NIE (Número de Identificación de Extranjero)

Before you can buy a property in Spain, you will need to get an NIE number. This is an Identification Number for Foreigners, which is required for tax and legal purposes. You can apply for an NIE at a Spanish police station or through your lawyer, who may assist with the application.

Step 3: Confirm Property Title and Legal Status

This is one of the most critical parts of the process. Your lawyer will carry out due diligence on the property. The checks include:

• Checking the ownership: Confirming that the seller is the rightful owner and has the legal right to sell the property.
• Verifying the land registry: Checking the Registro de la Propiedad (Property Registry) to ensure there are no encumbrances, debts, or legal disputes on the property.
• Outstanding debts: Ensuring there are no unpaid taxes, utility bills, or community fees that could be transferred to you as the new owner.
• Planning permissions: Verifying that the property has all necessary planning permissions and complies with building regulations.

Step 4: Sign the Preliminary Agreement (Contrato de Arras)

Once due diligence is completed and both parties agree on the price, the next step is to sign a preliminary agreement (Contrato de Arras) and pay a deposit (usually 10% of the agreed price). This is a legally binding agreement that outlines the terms of the sale and the timeline.

• Deposit: The deposit is typically 10%, and it acts as a guarantee that you intend to complete the transaction. If you back out of the deal, you may lose the deposit; if the seller pulls out, they must return the deposit and pay a penalty (usually double the amount).

Step 5: Finalize the Sale (Escritura de Compraventa)

This is the most important stage, where the formal transfer of property ownership takes place. The Escritura de Compraventa (Deed of Sale) is signed by both the buyer and seller in front of a notary public. The notary will confirm the identity of the parties and the terms of the sale.

• Final Payment: The balance of the purchase price is paid on the day of signing the Escritura de Compraventa.
• Notary’s Role: The notary will draft the deed, ensuring that all legal requirements are met. The notary does not represent either the buyer or seller but will ensure that the transaction is legally valid.
• Registering the Sale: After signing the deed, the notary will send the documents to the Property Registry (Registro de la Propiedad) to officially register you as the new owner.

Step 6: Pay Taxes and Fees

There are various taxes and fees associated with buying property in Spain, which must be paid before the property can be officially transferred to your name:

• Property Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP): This tax is paid when buying an existing property (not a new build) and varies by region but is typically around 6–10% of the purchase price.
• VAT (IVA): If buying a new property from a developer, you’ll pay VAT (IVA) instead of the property transfer tax. The VAT rate on new properties is typically 10%.
• Notary and Registration Fees: The notary fees and property registration fees generally range from 0.5% to 1.5% of the property price, depending on the complexity of the transaction and the value of the property.
• Legal Fees: Your lawyer’s fees will usually be between 1% and 1.5% of the purchase price.

Step 7: After the Sale – Utility and Tax Registration

Once the sale is completed, there are a few steps to complete the process:

• Change the utility accounts: You’ll need to change the names on electricity, water, gas, and other utility bills. You can do this with the respective utility companies, providing proof of ownership (such as the deed of sale).
• Register for local taxes: You’ll need to register the property with the local town hall for the IBI (Impuesto sobre Bienes Inmuebles), the local property tax, which is similar to council tax in the UK.
• Community of Owners (if applicable): If you buy a property in a complex with a community of owners (e.g., an apartment or townhouse), you will also need to register with the community and ensure you’re up to date with any communal fees.

2. Conveyancing Fees in Spain

Here is a breakdown of the typical costs involved in buying property in Spain:

• Property Transfer Tax (ITP) or VAT (IVA) (for new property) — 6% to 10% (ITP) or 10% (VAT).
• Notary Fees — 0.5% to 1% of the property price.
• Land Registry Fees — 0.3% to 1% of the property price.
• Lawyer’s Fees — Around 1% to 1.5% of the purchase price (though some lawyers may charge a flat fee).
• Property Valuation Fee — €250–€400 (if needed for mortgage purposes).
• Mortgage Registration Fees (if applicable) — 1% to 2% of the loan amount.
• Local Property Taxes (IBI) — Varies depending on location and property value.

3. Selling Property in Spain

If you’re selling property in Spain, the process is relatively similar to buying, but as the seller, your responsibilities include:

• Clear any outstanding debts: Make sure that any taxes, utilities, and community fees are up to date.
• Prepare the deed (Escritura de Compraventa): The seller and their lawyer will prepare the official sale contract.
• Capital Gains Tax: Sellers are subject to capital gains tax on any profit made from selling the property. This can vary, but in general, tax is calculated based on the difference between the sale price and the purchase price, minus allowable deductions (e.g., renovation costs).
• Notary Fees: The seller typically covers notary fees, but this can be negotiated.

4. Tax Implications for Expats

• Non-resident Property Tax: If you’re a non-resident in Spain and own property, you must file an annual tax return to pay the non-resident property tax (Impuesto sobre la Renta de No Residentes). The amount depends on whether the property is rented out or not.
• Inheritance Tax: Spain has its own inheritance tax system, which can be quite complex, especially if you’re not a resident. You should consult a lawyer or tax advisor to understand the implications for your estate planning.

5. Conclusion

The process of buying or selling property in Spain can be complex, particularly for expats unfamiliar with the country’s legal system and tax structure. The key to a smooth transaction is to seek expert legal and financial advice, particularly from a lawyer familiar with Spanish property law. Having a Spanish lawyer to guide you through the process, conduct due diligence, and ensure all taxes and legal obligations are met will protect you from potential problems and give you peace of mind throughout the conveyancing process.