Frecuently Asked Questions

Buying property in Spain

We have an independent legal service to help the clients with their property purchase in Spain.

Why hire us?

  • 100% of our clients are international clients. We understand your needs and your expectations of service. We are the only law firm covering all of Spain that works this way.

  • We have an architect as head of the department for property purchase. Our real estate lawyers will handle the property transaction, but you will have an architect's perspective before investing your money in Spain.

  • We do not get commissions from banks, realtors, or construction companies. We work only for the client. A realtor or bank can arrange the closing, but a lawyer works specifically for the buyer.

Property checks should be done before you pay realtor fees to hold a property and before you make a down payment.

Use our expenses calculator to get an idea of the total costs involved in your purchase, as well as when you will need to pay them. The expenses calculator includes all fees and taxes generally ascribed to the buyer. Keep in mind, however, that whether the buyer or the seller pays the various fees and taxes is always negotiable. Who pays the fees should be clearly specified in the pre-agreement.

Yes. You can give us power of attorney, and we will represent you at the closing.

  • The property is not registered, most likely because it was illegally built. Many unregistered properties are being sold to foreigners, since foreigners are less likely to check the registration. If you find a bargain, chances are it’s not registered. Solution: Get a registry listing (nota simple).
  • Too many brokers are involved. We once had to speak to seven brokers to find out the actual facts about a house. Besides communication difficulties, each broker may be getting their percentage. Solution: Ask the broker for their contract with the owner.
  • The property was sold to more than one buyer. Yes, this happens. Either the buyer has intention to defraud, or they received a better offer and were unable to refuse. If there are two purchase agreements, the property belongs to the first person to register the property at the Property Registry. If you are the second person, then you have a right to compensation from the seller, in addition to a return of your deposit. If you signed a pre-agreement (contrato de arras), then you have a right to receive double your deposit.
  • The new home is delivered late or with defects. During the 2005-2007 boom, many if not most developers were selling houses before they were built. After the closing, it was all too common that the property was completed long after the agreed-upon time period. Solution: the contract must establish a required completion deadline. If the deadline is not met, the seller agrees to return all payments that the buyer has made, including interest plus additional costs caused by the delay. If the seller is not willing to include that in the contract, you should strongly reconsider whether you want to continue. Another common case is that the new home is delivered with changes to the plan or with defects. Once the buyer has signed the contract, the developer’s description and architectural plan have the value of a contract. If it is the buyer who makes changes to the plan, these should be put in writing. If the property has defects, the developer is obliged to repair them. In such cases, we recommend hiring an architect, who can help determine the importance of the defect and the cost to fix it.

To find out the market price of a property, you should have an appraisal done. Both our property appraisal service and all others in Spain are registered and guaranteed by the Sociedad de Tasacion.

The following sites can give you an idea of the value of a property:

Sociedad de Tasacion This company certifies all appraisals done. Their site has the current price-per-square-meter of new properties sold in all the cities of Spain, as well as the change in price from the prior year.

idealista.com This large post-your-own-property site offers reports with detailed stats on used properties.

Fotocasa Another large listing of used properties for sale.

An appraisal will cost roughly 300 euros (depending on the value of the property). The appraiser uses two approaches to calculating the value of a property:
– They will measure the property to draw up a floor plan and calculate the square meters, then multiply this by the value per square meters in the area. This value then gets adjusted by a number of factors, such as whether the house can be moved into right away or needs renovation.
– They will find similar properties that have been sold in the area recently.
Since the determined value depends in part on a comparative study with other similar properties that have been sold in the area, two appraisals done on a propety could vary by up to 10%, especially if there is a lack of comparable properties sold recently.

Regarding price per square meter for apartments, make sure whether you’re dealing with m2 construido (constructed space) or with m2 util (usable space). Construido includes common space: stairs, air shafts, walls, etc. The difference between the two numbers can vary widely, but on average m2 construido is 27% more than m2 util.

If you’re getting a mortgage, the bank will require you to pay for an appraisal, though they choose the appraiser. This step comes after you pay the downpayment on the property, though, so if your offer is significantly higher than the appraiser’s value, you’ll lose this downpayment if you back out now. For that reason, you might want to pay for your own appraisal before paying the downpayment.

And the broker tells you this is common practice, right? In truth, it’s a known practice, but not so common. What is happening is that the seller wants to have less capital gains so they can pay fewer taxes. The problem for you as the buyer is that when you go to sell the property down the road, you will then have to pay more capital gains (unless you also find a buyer willing to make this deal). You will pay in taxes all that the current seller didn’t pay. So why would anybody accept this? It’s because some people in Spain have a sizeable amount of money tucked under their pillow that they never declared as earnings to the tax office. Giving this money as cash to the seller effectively launders it, and is therefore illegal. If this is not the case with you, then don’t make a deal with the seller. In fact, this should be made clear in the pre-agreement, so the seller doesn’t try to force in this provision a week before the closing.

For a new construction, you should get:

  • A registry listing (nota simple) of the full plot of land.
  • The CIF and full name of the construction company.
  • The construction permit (licencia de obra).

For an existing house, you should get:

  • A registry listing (nota simple) of the property.
  • A copy of the deed (escritura).

There is a national registry of real estate agents — Agente de la Propiedad Inmobiliaria (API) — but agencies are not required to become members. In fact, many large agencies are not members. With an API agency, there are more controls. For example, there are declared fee guidelines (between 3% and 5%).

In Spain, there are no required inspections, such as for excessive radon levels, termite damage, or structural damage. However, most cities in Spain have approved a regulation to require inspections for all buildings over 50 years old (the required age may vary depending on the city). So when you buy an older apartment or house, you should request this report, since the report may prescribe costly renovation work that must be performed on the building within a certain time frame.

when you buy a property, the bank performing the mortgage will always ask for a standard property appraisal. This appraisal does not include property surveying. If you would like a property survey, please see our property survey service.

f you buy a property principally as an investment, then depending on the value of the property or properties and your future plans, it may be cost-effective to form a company (SL), paying off the cost of forming the SL and accounting for the SL.

You should consider the question of whether to become a legal resident or not, and whether to create an SL or not, as part of your international tax plan, a plan that should be thought out if you live or work in more than one country.

Yes. Please see our information about buying a property, because most of it is relevant to you as a seller. As a seller, you have specific obligations. It is essential for you to know these and comply with them. Strong Abogados will inform you about them, particularly those relating to taxes. If you are a non-resident and a retainer was withheld from you for taxes, you may be able to recoup part of this payment by filing the forms. This retainer is a consequence of the seller’s obligation to pay tax on revenue obtained in Spain.

Spanish legislation classifies land as one of three types: suelo urbano, suelo urbanizable, and suelo rústico. This classification is listed in the Planes Generales de Ordenación Urbanística de cada ciudad. The possibilities of construction on each is very different.

Suelo Urbano Land of this type has connections to the public networks of potable water, sewage, electricity, etc. The conditions regarding what type of construction can be done on this type of land depends on the regulations for each sector of the city.

Suelo Urbanizable This land has the possibility of being reclassified as suelo urbano. For that to happen, a Plan Parcial must first be approved, followed by the approval and execution of a Proyecto de Urbanización.

Suelo Rústico Land of this type may not be reclassified as suelo urbano. Construction is very restricted; normally only buildings relating to agriculture and livestock are permitted. A subclass called Suelo Especialmente Protegido, such as Natural Parks, has even more restrictive conditions.

Once you have decided on the property that you want to buy, the process is as follows:

Preliminary check on the property 
With a nota simple from the Property Registry (Registro de la Propiedad), you’ll find out if the property is free of debt, if it really belongs to the seller, and if the description of the property matches what the buyer has been told (to avoid surprises about missing square meters). You should get this document from the real estate agent before giving any downpayment.

The mortgage: part I 
In the process of buying an existing property in Spain, the mortgage is going to take the most time, so start work immediately. First, you go about retrieving all the documents that the bank asks for. Then they can pre-approve you, and you can safely sign the pre-agreement and pay the downpayment, knowing that you can cover the money required, and be ready for the closing on the date stipulated in the pre-agreement.

The pre-agreement
Between the seller and the buyer, it’s best to have a contract in place until the public deed of purchase is ready. It’s usually a simple document in which the seller expresses their intent to transfer the property to the buyer, and the buyer expresses their intent to buy at the price and conditions agreed upon. At this time, the buyer also gives to the seller a percentage of the agreed-upon price, typically 10%. The typical agreement in Spain (called contrato de arras) is if the buyer backs out of the contract, they lose the deposit; if the seller backs out, they have to pay double. Of course, the buyer and seller may choose another type of agreement if they prefer.

The mortgage: part II 
Once the bank has a copy of the pre-agreement, they hire an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. The bank will only give you a loan equal to a determined percentage of the appraised value of the house. Note that the seller or broker needs to be available so that the appraiser can get in to see the property. At the closing, you will be charged for the appraiser’s work, usually between 300-500 euros. Note that the tasador is by law a licensed architect, so even if you don’t need a mortgage, but have doubts about the structural integrity of the house, you might want to get an appraisal of the property done.

The closing
The property transfer must be certified by a notary. The deed of purchase will be given to the buyer after the notary reads it and the parties present agree to the contents of the deed. The following must then be presented: proof of identity (or power of attorney) of both parties, the seller’s title of property (a form that reports the investment to the Central Register), and the buyer’s payment. The buyer and seller sign the contract; beneath their signature, the notary signs using his firma protocolizada and the deed is ready for taxes.

After the closing
Once the closing is done, the follow-up work is to make sure the utilities are in order, taxes are paid (see Taxes below), and that your new ownership of the property has been registered (see Property Registry below). With a Spanish property in your name, you will need to file yearly income tax and property tax. Even if you have a valid will in your country of origin that includes your Spanish property, we also recommend having a Spanish will drawn up.

For the buyer: transfer tax (impuesto de transmisiones patrimoniales) and stamp tax (impuesto de actos jurídicos documentados).
If the seller is an individual, the buyer pays a transfer tax. This tax varies between 6% and 10% of the purchase price, depending on the region of Spain. Some regions like Andalucía have a progressive transfer tax, where the percent increases based on the price. If it’s a storefront (local comercial) or parking space sold by itself, the transfer tax will be higher than 10%. If the seller is a real estate developer and the building or land to be built on represents a first-time transfer, then the buyer pays VAT tax instead, meaning 10% for housing, 21% otherwise.

For homes, you also pay a stamp tax. The stamp tax also varies depending on the region — between 0.75% and 1.5%.

For the seller: a local tax called the plusvalia (sometimes it is agreed that the buyer pays this tax). This is essentially a tax on the appreciated cadastral value of a property.
With a copy of the deed in hand, the seller must go to the City Hall (or wherever local taxes are paid). After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property’s valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia. It’s best to ask at the notary’s office about this payment.

Property Registry
You must register your deed at the local office. This guarantees that your ownership rights to the property are fully protected. (Some small towns don’t have an office, some big cities have many — check the original deed of the seller to find out which office corresponds to you). You will be charged a standard fee (about .4% of the first 6010 euros, going down to .02% for over 6,010,121 euros).

Extended example
Bob and Judy found an apartment in Barcelona and negotiated a price of 340.000€. The seller, Jordi, did not use a real estate agent. Bob and Judy signed a contrato de arras. The seller asked for a downpayment of 40.000€, a bit more than the usual 10%, but Bob and Judy didn’t want to argue this point. They then went to a bank for a mortgage of 260.000. The bank offered them a variable-rate mortgage for Euribor + .50%, with no opening fee, no cancellation fee, and a first-year rate of 3.50%. Since Euribor was currently 2.31%, they saw that this would cost them an additional 1300€ the first year. They asked the bank to give them Euribor + .50% for the first year also, which the bank agreed to.

The bank requested the following documents from Jordi:

  • A copy of his DNI.
  • Receipts showing he was paid up on his property tax (IBI), building fees (pagos de comunidad, and mortgage (certificado de la deuda pendiente).

Once all of Bob and Judy’s documents were presented, it took one week for them to be pre-approved. It took another 1 1/2 weeks for the bank to get an appraisal (tasacion) done on the property (no delays on Jordi’s side in letting the appraiser in), and another 3 days for the bank to hear back from the appraiser. The appraised value was 413.000€, so the bank approved the loan. Bob and Judy went to the bank to sign the mortgage contract. They were also required to get property insurance (118€/year) and life insurance (which they got on Judy, since it only came to 178€/year for her). Bob and Judy confirmed that after a year they could cancel both policies (since Bob, in fact, already had a life insurance policy). They were also required to domiciliar a few things in the bank account. They called the gas, electric company, and nursery to have automatic withdrawals done through this account. The bank then gave them an estimate of what the mortgage payments would be, as well as a listing of the various retainers (provisión de fondos) that they would need to pay. (Use our expenses calculator to calculate the total costs involved in your purchase.) The provisión de fondos appeared as follows:

Compraventa/Purchase (340.000€)
Préstamo/Loan (260.000€)
Cancellation of prior mortgage (86.441€ remaining)
425€ 216€244€885€
Bank fees
Com. Ap. PHSeguros3% NIEOtrosTotal
 300€ 42€342€
Receiving partyAmount received 
Gestor18.002€   10.128 + 6.989 + 885
Bank of prior mortgage86.441€ 
Seller212.673€   340.000 – 40.000 (already paid) – (86.441 + 885)

The total at the bottom says 317.459 €. Bob and Judy already paid 40.000€. Did this mean they actually had to pay 357.459€ in total? Yes, at least initially. The 10.128€ and 6.989€ are the retainers for fees that will need to be paid to the notary, the property registry, to the tax office (Hacienda), and to the gestor. The property purchase, the new mortgage, and cancellation of the seller’s mortgage all have to be notarized and registered. This bank contracts a gestor to manage this and make the various payments. The bank/gestor will send you the deed for the property three months after the closing (once the property has been registered). At this time, they should also send you all the notary, Hacienda, and Registry receipts. The bank must refund you the difference between these actual receipts and the retainer that was paid.

Then note the cancellation costs of 885€. Bob and Judy don’t pay this. Their bank will charge this to Jordi. Jordi then complains to his own bank, “How come I have to pay this? You told me I had a 0% cancellation fee.” His bank responds that this is not a cancellation fee. This is the cost to register the cancellation with the property registry (and all registry changes require a notary’s signature).

The bank then charges 300€ to handle the life and property insurance forms. Jordi is a resident of Spain, so no 3% tax to non-residents is withheld (“3% NIE” in the provisión de fondos).

Bob and Judy transferred 57.459€ to the bank to pay the rest of what they owed. Four days later was the closing in Barcelona; 30 days in total from the day they presented the documents to the day of the closing. The closing went smoothly, though Jordi made a long face when he heard the property had been appraised at 413.000€. Jordi received the check from the bank rep and gave Bob and Judy the keys to the apartment.

It took a whopping ten months (instead of the usual three months) before Bob and Judy received the deed from the bank rep, receipts, and refunded amount from the retainers — 19% of the 17,117€ that was retained.

When you invest in real estate in Spain, note that:

  • Taxes may vary significantly depending on the region in Spain where you plan to buy the property.
  • You can obtain a work permit in Spain (a golden visa) via an investment over 500,000€.

The ROI on a real estate investment in Spain depends on how you structure the investment to take advantage of the best tax rates, using investment vehicles in Spain, such as the TRLIS, SOCIMI, and ETVE.

Tax summary

  • Transfer tax: There is a sizeable tax imposed when you buy a property.
  • Property tax: The yearly property tax in Spain is called IBI. The rate is relatively low.
  • Wealth tax: Every region has their own rules. Madrid and Andalucia have exemptions from the wealth tax. The wealth tax is applicable to residents and non-resident individuals with assets over 700,000€ per person in Spain (or worldwide if you are a resident of Spain). That is why we recommend anyone in Spain with assets over this amount to use a corporate structure.
  • Corporate taxes

Corporate structure

What is the best corporate structure to buy properties in Spain as an investor?

If you plan to invest less than 3MM euros, the best structure is a limited-liability company (SL). In 2023, the corporate tax rate will be 10% for the first two years after earning a profit and the social capital is 1€. You can compensate the amount you invest in real estate with the amount you receive in profit. If you plan to invest more than 3MM euros, you should look into forming a SOCIMI.

Can I buy properties in Spain with my UK LTD?

Yes, but then the tax rate will be around 24%, as the entity will be taxed as a non-resident. Also, any dividends paid in Spain will be taxed at around 19%, on top of whatever tax rate you pay in your country.


If your business owns and rents out 8 properties or more, you can receive a reduction of 85% on your corporate income tax (Impuesto de Sociedades). If you are a group or an individual and have over 1MM euros to invest, this may be a good fit. The corporate tax is 4%, but you have to have at least one employee. Some regions such as Valencia provide additional tax benefits for this type of company. When you rent out the properties that you invest, the transfer tax can be exempt. You cannot sell the properties for 3 years and you have to use the properties for rental.


The SOCIMI is Spain’s version of the Real Estate Investment Trust. If you are planning to invest over 3MM €, the SOCIMI is a good choice. The corporate tax rate is less than 1% and dividends are exempt for most


The ETVE is a foreign holding (closed end mutual fund) in Spain. It is an entity that owns shares from other entities in a foreign country. The tax rate is as low as 3%. There are some conditions for keeping the investments in Spain over a number of years. Dividends are exempt if you are a non-resident individual. Spain is an attractive choice for establishing a holding company for foreign securities.


Arrange a free meeting now and let us help you buy or sell a property in Malaga.
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