Buying, Selling and Renting a Properties. Mortgages


Real Estate Lawyers

Real estate legislation in Spain regulates the legal aspects related to real estate transactions and ownership in the country. It is essential to understand these laws when buying, selling or leasing property in Spain.

Foreigners buying property in Spain must also be aware of specific regulations, such as obtaining a foreigner identification number (NIE) and complying with tax obligations, including payment of transfer tax or Value Added Tax (VAT).

In addition, there may be regional or municipal regulations that affect real estate transactions, such as urban planning regulations or restrictions on vacation rentals.

Given the complexity of real estate legislation in Spain, it is advisable to seek professional legal advice when dealing with real estate matters. A qualified lawyer with experience in Spanish real estate law can guide you through the process, protect your interests and ensure compliance with all legal requirements.

Buying a property in Spain is a simple process if you take it one step at a time and hire the right experts.

Step 1: Do a thorough search

If you are on vacation in Spain and suddenly find the perfect house, you may want to hurry and make an offer before you return home. It is absolutely essential to contact a law firm and sign a notarized power of attorney empowering them to review any documentation before making the reservation payment.

At Javaloyes & Suarez we are prepared to immediately give you the help you need to buy a property quickly so that your dream does not turn into a nightmare.

Step 2: Find a competent lawyer

Once you have found the right house, you should make sure you have the help of a good expert to research the legal side. Choosing your lawyer is an important step in the process of buying a property in Spain and it is important that you safeguard your interests.

Your lawyer should:

  1. Be able to communicate easily with you – make sure he or she speaks your native language well or a language that you yourself are fluent in to a really good level.
  2. If you are abroad during the buying process, how will you communicate?
  3. Have a good reputation.
  4. Be long established – you will want to make sure that your lawyer has solid experience and is not tied to any of the parts in the process.
  5. You should know that your attorney works for you and only you.

Step 3: Housing Due Diligence

We will make sure that all the correct home checks are carried out, such as verifying

  1. The legal status of the home
  2. That it is free of debts
  3. That the electricity, water and community fees are paid.
  4. That the extensions and renovations have all the correct permits and building licenses.

Your lawyer should do these checks for you and you should ask for confirmation that they have been done.

Step 4: Sign the private contract

The next stage of our steps to buying a property in Spain is when your lawyer certifies that the residence meets all the criteria and you can sign the private contract. The private contract is not registered in any official registry, but it is legally binding and must be reviewed by your lawyer before signing it.

When you sign the contract, you will have to pay a down payment. If you as the buyer break the contract, you will lose the down payment. If the seller withdraws from the transaction, you as the buyer are entitled to double the down payment as compensation under the law unless otherwise stipulated in the contract.

Step 5: Acquire NIE and power of attorney

During the process of buying a property in Spain, you will need to obtain a NIE number if you do not already have one. This Foreigners Identification Number means that you are registered with the Spanish tax authorities. You have to apply for it in person at the Foreigners Office of the National Police.

If you cannot be in Spain when you need to apply for your NIE, you can also apply using a Power of Attorney. You can designate a trusted person to represent you in certain transactions and then you must draw up a power of attorney. This means that the purchase process can continue even if you are not present.

Step 6: Sign the title deed

The title deed must also be signed in front of a notary. In this step you also make the final payment and receive the keys to the property.

When you sign the deed, you will not immediately receive the original deed without an official copy called a Copia Simple. If you have a mortgage loan, sometimes the bank will hold the original deed until the loan is paid in full.

Step 7: Registering the deed at the Land Registry

Once you have signed the deed, the purchase must be registered at the Land Registry and you must notify the electricity and water companies of the change of ownership.

Step 8: Pay the purchase process bills

Now you must complete the payments with your legal representative. You should ask for an itemized list of expenses rather than just accepting a grand total. You should also obtain all documentation and original invoices for the notary fees, land registry fees and taxes you have paid. It is important to keep all these documents, invoices, documentation and guarantees in a safe place. You never know when you may need them, and they are deductible expenses on the day you sell the property.

Step 9: Pay ongoing taxes

It is important that you take care of paying your property taxes in Spain. What you must pay annually depends to some extent on whether you are a resident or non-resident in Spain. Both residents and non-residents must pay the Impuesto Municipal sobre Bienes Inmuebles – IBI. Residents also pay income tax and declare it in Spain, but it is important to remember that even non-resident owners must file an annual income tax return. It is for the payment of an income tax imposed in Spain that is calculated based on the value of the property.

Step 10: Congratulations!

You have now reached the tenth and final step in the process of buying a home in Spain. You have now purchased a home in Spain step by step and should feel confident that the purchase has gone well. By following the advice of good experts, step by step, you can look forward to many years of home ownership in sunny Spain.

This information and the application of this process may vary from region to region.

The examples below refer mainly to NON COMPLICATED cases.

Example) You live and are registered in a European country and you are the owner or co-owner of a property in Spain that you wish to sell:

Anyone buying or selling a property in Spain must apply for a NIE number. In other words, even in the case of a finca, all persons involved must apply for an NIE number.
When you are thinking of selling a property, regardless of whether it is a house, apartment, etc., then you should start by investigating WHO you want to have as your agent in Spain.
You cannot handle all the paperwork yourself without a law firm in Spain. Contact us.


The following documents are required for a sale.

1) Power of Attorney

Start immediately to submit all data for the preparation of a power of attorney to Javaloyes y Suarez as your law firm.

Full name and address of the person
The DNI number of the person, if it is a non-Spanish citizen residing in Spain, his passport number, nationality and Spanish residence number, if married / single / divorced are required.
If you are a Spanish national, your D.N.I. number is required, if you are married / single or divorced.
All your details are on your D.N.I., so it is not necessary to mention more here. see below under point 2.

(If it is a complicated power of attorney, your Spanish representative should draft the power of attorney in a way that corresponds to your needs).

All information about the property to be sold is in Escrituran / legal title.
The power of attorney will include the right of your attorney to file a tax return, pay taxes, etc. Without a certificate that taxes have been paid, you cannot sell, and the buyer cannot obtain your Escritura / Title Deed.
If you have an N.I.E. or N.I.F. number, it must be on the power of attorney.

When selling please bear in mind that the more original documentation related to the property you wish to sell is provided to your legal representatives in Spain, the quicker the sale will be completed.

Your obligation as seller is formalized with a pre-purchase agreement, which obliges you to ensure that all documents are in place so that the buyer can receive his Escritura, another common rule is that your legal representative withholds the sale price until all documents are ready.

Please note that the Spanish Tax Agency withholds the sale price from the sale price. This is to ensure that taxes are paid. We will make sure that the amount withheld is the correct amount according to the price of your property.

Obtain a license and pay your taxes

Landlords who rent out their property must register it with the town hall. This applies to all types of rental housing: apartment, villa or room in a dwelling.

What is considered tourist accommodation?

All dwellings in which the owner offers to stay overnight in exchange for a fee and which are advertised through internet ads or in tourist agencies and rental companies.

Are there any exceptions?

If you rent for more than 2 months to the same person, you do not need to register in the tourist register. This is regulated in the ordinary rental law.

Does the accommodation need to be specially equipped?

Yes. First of all, it is necessary to have a housing license (occupancy license included in the law) which is obtained when purchasing the housing. Bedrooms must have ventilation and blinds/curtains. There must be fans or air conditioning, as well as the possibility of heating in winter. There must also be kitchen utensils, first aid kit, information about the area, map and a special complaints book (can be purchased in bookstores or through us). The house must be clean and bed linen must be available in at least 2 sets. The telephone number of a contact person in case of problems and information about the rules that apply in the area must also be available.

When can you start registering?

3 months after the entry into force of the law, i.e. in May 2016, this register must be operational. It is proposed in the meantime until then to prepare all the documentation, get your housing license and tourist maps, install AC and update the home according to the rules. Failure to register can result in a fine of up to 150,000 euros.

What documents are needed?

Below are the documents needed to apply for a tourist license in Valencia.

  2. NIE number
  3. SUMA (town hall receipt)
  8. NUMBER OF BEDROOMS AND BEDS (Maximum occupancy)
  9. SIGNED APPLICATION FORM (original signature required)

What are the tax regulations?

The same as before. You pay taxes on the profit you have made after deducting the expenses of the property and any rental company or similar.

When you rent out your property as a non-resident in Spain you must pay a rental tax every quarter, in January, April, July and October. If you only rent the property on a short term basis you will have to submit the form in the corresponding quarter.

To calculate the tax the following information is needed:

  1. NIE of either of the owners.
  2. The rental contract (in case it is a long term rental) (copy)
  3. Dates of rental
  4. Money received
  5. Property expenses:
  6. Municipal tax (copy of receipt)
  7. Community expenses
  8. Insurance of the dwelling.

Do all tenants have to sign a contract?

Yes, even if it is only for one night, a contract must be signed. All documentation must be kept for one year. It should include the name of the person/company renting the accommodation, as well as the code, how many people live there, the date of arrival and departure and a telephone number to call in case of emergency. It is not necessary to issue an invoice; a normal receipt is sufficient. The tenant must present an identity document upon arrival.

Financing the purchase of real estate

Equity Release

If you already own a property and it can be used to finance the purchase of a property in Spain, we recommend it. It is an inexpensive way to finance a purchase in Spain. But if for some reason you want to finance your purchase here in Spain, there are great opportunities to do so in Spanish banks.

Property loan in a Spanish bank

You can apply for a loan for the property you intend to buy in Spain at a local Spanish bank. We have good contacts and long experience in dealing with local banks, so we can help you to get a loan in Spain. The banks we recommend are Sabadell, Deutsche Bank, Bankinter and CaixaBank. Most banks have staff who speak different languages and are used to working with non-residents. In that case, the final amount of the mortgage depends on the appraisal. Many of our clients send the required information to the bank by email and do not have any personal contact until they come to close the purchase, and everything has been arranged and approved by email in advance.

Through the power of attorney that you sign with Javaloyes & Suarez we help you in all the mortgage processing obtaining the most advantageous conditions for you.

You will find that the cooperation with Spanish banks is pleasant. It is very personal, and you can contact directly the staff of your bank office by phone or e-mail. There are no answering machines here. You have contact with people and not with machines.

Normally, a Spanish mortgage loan has a maturity of up to 30 years for non-residents. However, the maturity depends on your age (or the average age of those borrowing), as most banks want the loan to be repaid before the borrower turns 65. Exceptions can be made to this age limit, but it all depends on your personal situation.

After the 2008 financial crisis, banks have become more conservative, but they are still lending money. If your income level allows it and you can prove that you can easily pay back the loan, (interest plus amortization) then it is possible to get a loan. The bank wants to make sure that the loan repayment amount does not exceed 30-35% of your net income. The interesting thing is that banks only take into account current interest rates, which are historically low. They do not calculate future increases.

In ordinary cases, it is possible to get a non-amortization period of up to two years, which you can take advantage of at any time during the term of the loan.

Most Spanish loans are based on a variable rate, not a fixed rate. The loans are mostly based on the EUR Ibor index, which is usually better than the IRPH, which is offered by some savings banks. Although the difference between what the bank offers is greater in the EUR Ibor index than in the IRPH, the choice of the EUR Ibor is usually more favorable. You can observe for yourself the evolution of these two indexes and decide for yourself.

The amount of the loan for non-residents, if it is a holiday home, is usually a maximum of 60% of the lowest amount, either of the appraisal or of the declared purchase price. If you are a non-resident, but the property you are borrowing against must be your permanent residence, most banks will lend up to 70% of the lower of the two rates. If you are a resident in Spain and the property will be your permanent residence, then you can borrow up to 80%. One of the first questions you should ask the bank is how much they will lend you. Some banks say they will lend a high percentage, but then give a low valuation of the property so the effective percentage they will lend is the same, as other banks with lower percentage, but with a realistic valuation.

In the case of non-residents, the bank is more interested in the level of income than in the total expenditure and in the ownership of a property outside Spanish borders. Spanish lenders do not seem to care about the rental income that can be achieved from the property you intend to buy.

The bank will ask you for the following information

Copy of your passport

  1. Your Spanish NIE number (not required for the first registration)
  2. Your tax return for the last two years
  3. Your last 3 payslips
  4. Bank details for the last 6 months of all your bank accounts, including pension funds, investment funds and restricted capital
  5. If you own other property in Spain, a “nota simple” / current legal act for each property
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