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Below you can find the essential information on taxes and legal issues related to real estate acquisition in Spain.
Our on-site partners and the associated lawyer firms will be happy to assist you during the negotiations and help you with the formalities for the purchase.
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General Information
According to the liberalized legislation (Decree 1042/1985) foreigners are allowed to purchase real estate units for both private and commercial purpose.
The Spanish term “Urbanizaciones” means the batch of residential developments built in suburb zones (Marbella’s residential area is surrounding a little town at a distance of 12km). Developing of such Urbanizaciones has first to be approved by the municipality.
Every detail of exploitation purpose and infrastructure is regulated by the so-called “Promotor de la Urbanizasion”: streets, lights, sidewalks, sewerage, water pipes and current lines, etc.
A preliminary step for receiving building licence is not only to have a building application but also a project signed by a certified architect, who will present it to the Architect Register for approval. Then it is necessary to enclose the project to the inquiry and to file it to the responsible office.
At the completion, attested by a certificate of the architect, the building authorities must issue a specific expert technical report, which certifies the building as habitable.
All this certificates are fundamental for registration at the cadastre.
Building warranties
Houses and apartments are warranted as follows, starting from the purchase date:
1 year for aesthetic damages (filler, plaster, painting…)
3 years for installation damages (electrical system, gas plant…)
10 years for structural damages (basis, balconies, walls…)
The inquiries for the reparation do lapse after 2 years from signalling and documenting the damage. Builder, company and architect are in duty bound to compensate.
According to Spanish law, every partial payment done during the construction works must be warranted with an assurance or a bank guarantee.
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Acquisition costs
Purchase of a real estate unit leads to the following additional costs:
VAT (IVA) and the so-called stamp tax (0,5%) if the unit is new and land acquisition tax if the unit has already been used (6-7%). VAT for business offices and land plots makes 16%.
The notary fee as well as the registration at the Property Register depends on the value of the unit. For example, if the value of the unit makes EUR 300.000,- the notary and registration fee accounts for approx. EUR 1.000,-.
Legal fees make approx. 1% of the purchase price of the unit depending on the complexity of the case.
On the whole 8 till 9% acquisition costs will be due additionally to the purchase price.
Instead of common middle European cadastre there is the so-called “Registro de la propriedad”, which means property register. Registration of the unit is not obligatory, but as the investment market in Costa del Sol and in Marbella in particular is booming, some adjustments corresponding to the European tradition of property registration have been made especially for this region.
 Registration of the purchased unit within the Property Register is usually done by notarization of the fact of sale. If Buyer and Seller have arrived at an agreement, they conclude an optional or a private binding contract. In this case a payment of approx. 10% of the purchase price is due.
When the last amount has been paid, Buyer and Seller or their proxy agents sign at the notary’s office the so-called “Escritura” (Deed of Ownership). After this act the notary issues a “Copia simple de la escritura”. The contract certified by notary, the so-called “Copia autorizada”, is to be filed to the Property Register over the tax office and municipality.
We will be glad to help you furnishing your new home by presenting to you various stores with wide assortment and favorable prices.
Land tax, as well as refuse disposal service, is due once or twice a year. If it is easier for you, you can authorize your bank to pay these fees automatically.
To accomplish a purchase every buyer (Spanish or foreign, resident or non-resident) needs a tax payer’s account number (N.I.E./ N.I.F).
We would be happy to assist you in applying for such tax number.
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