The legal steps for the acquisition of a property are the following:
1) Preliminary steps:
Applying for a NIE: Any non-resident person investing in real estate in Spain must apply for a Foreign Identification Number (Número de Identificación de Extranjeros). In case the purchasing party is a company or other type of entity, it must apply for a Fiscal Identification Code (CIF). Please contact us for information on the requirements for the application
Investigation: We can obtain for you a certificate from the Real Estate Register (Registro de la Propiedad) in order to find out if the property belongs to the seller, if it is free of debt or any encumbrances, and if the description of the property really matches that given by the seller. Depending on your interests, and if you wish to acquire a plot of land for development purposes (or existing edifications for redevelopment), it is also of the highest importance to know the exact situation of the property under planning regulations: allowed development, environmental restrictions, etc. Our lawyers experts in urban planning law may assist you in the evaluation of the restrictions on your projected restrictions and asses the legal feasability of your plans.
2) Preliminary agreements:
A private agreement may be signed between the seller and the purchaser prior to the signature of the deed of purchase. In the most usual agreement (contrato de arras), the parties convey that the purchaser must make at this moment a down payment. If the buyer backs out of the contract, he will lose the deposit; if the seller backs out, he will have to pay the buyer twice the down payment.
As an alternative to the signing of a private purchase agreement, the parties may sign an option agreement (put agreement), which may be executed and enforced by the purchaser even if the seller tries to back out. This type of agreement, formalized in a public deed, may be registered in the Real Estate Register, thus granting the purchaser its enforceability against third parties.
3) Deed of purchase:
The parties must sign a deed of purchase at a Spanish notary. At this time the purchaser usually pays the rest of the agreed price.
Although it is not strictly compulsory, it is highly recommendable to register the deed of purchase in the Real Estate Register.
The acquisition of real estate may be subject to VAT (at a 10% or 21% rate) and stamp tax (Impuesto de Actos Jurídicos Documentados, at a rate between 0,5% and 1,5%), or transfer tax (at a rate between 6% and 7%) depending on the type of property acquired, its use, and the type of purchaser. We can inform you on the exact taxation of the operation once you give us exact information on your purposes.
6) Other requirements
Other requirements are related with the communication of the investment to the Ministry of Economy (through a D2A model, although this requirement only applies in investments over Eur 3 millions), and the communication of the purchase to the local council for future payment of local taxes (Impuesto sobre Bienes Inmuebles)