1. Should I see a solicitor before signing a contract?

The first step in purchasing a property is to sign a private purchase contract. Normally if you are purchasing a property from a builder then the contract is between you and the builder. It is advisable that the solicitor reads any contract to check basically that the contract is not biased towards the purchaser and that the client has indeed agreed with the conditions in the contract because once it is signed it is binding to both parties.

2. What are the expenses to expect in purchasing a property?

Normally, individuals buying properties are expected to pay a deposit of 3.000 euros once a property is reserved and upon signing of the contract. A percentage of the property (around 30-50%) is paid a month thereafter and the rest of the monies on completion. On a resale, 10% of the value is normally requested a month after the initial deposit. The balance is upon completion.

The total amount of taxes and other costs to be paid on a purchase would be the price of the property plus around 11% on a new build and 10% additional on a resale. This should include all solicitors’ fees, taxes, the Notary and the registry fees. This is more or less accurate if the purchaser is not getting a local Spanish mortgage. Please keep in mind that this is not a rule but it is the practice here in this area. Other conditions can apply and subject to negociation.

3. How do I get finance to buy a property?

The best way to finance a purchase of a property is through a local mortgage here in Spain. PSI Consultants has various agreements with different local banks to assist the client in getting a mortgage.

4. What are the expected costs in having a mortgage?

The costs of getting a mortgage would be around 4% on the amount to be borrowed. Please keep in mind that this is on top of the other costs mentioned in the answer to question 2.

5. What would be the required documents for a mortgage?

The required documents needed by the bank - a copy of your passport, your NIE number, current pay slips, your income tax return. If you are self-employed, mortgage brokers would need your profit and loss statement from a chartered accountant. Please keep in mind that any documents to show proof of income and your capacity to pay the monthly dues would be helpful.

6. How can I open my Spanish bank account?

The banks would need your passport, information on your address and contact details. Normally, most banks do not require any deposits to open an account but may require you to have a minimum balance so that the client does not get charged for a monthly fee.

7. Does PSI Consultants check the property before we complete?

If you are buying a new property then PSI would definitely make sure that all documentation needed for the completion of the property is ready before signing for the property at the Notary. Please keep in mind that PSI Consultants does not physically check the property but ensures that all legal documentation is in order before the property is signed.

If you are buying a resale, PSI Consultants would check the legal documentation of the purchased property, to make sure that it is free of debts and other restrictions, that the property is indeed under the name of the seller and that it corresponds to the square metereage advertised.

8. What guarantees can the builder or developer give me as a buyer? What if the property is not finished on time? What if the builders go bankrupt?

When buying a new build, the builder should be able to provide the purchaser a bank guarantee on the payments made. This is the only guarantee that the buyers would have if the builder goes bankrupt or if there is an extreme delay on the completion of the property. Normally, if the property completion date is delayed beyond 3 months based on the stipulated contract date then we can claim for compensation. If compensation is not paid and the builder is not replying to our legal letters, then the client has no option but to file a legal case against the builder for the delay. We will have to weigh the situation, on a case to case basis, if the benefits of the lawsuit would outweigh the costs of filing a case.

9. Could the solicitor sign in my behalf for the completion of my property?

This is possible only if your solicitors have the power-of-attorney. It is therefore advisable, as majority of our clients have opted, to do a power-of-attorney while you are in Spain during one of your visits.

10. When can I have my keys and access to the property?

The keys are normally given on the day of completion at the Notary or to the clients or to the real state agency directly. Access to the property is also given on the same day.

11. Who should be present at the notary on the completion date?

Normally, it is your solicitor who would be present on completion day along with the builder, the builder’s bank (if they have an existing mortgage) and the buyer’s bank representative (if the buyer has a mortgage). If we do not have a power-of-attorney then the clients themselves have to go to the Notary and PSI Consultants would have to provide the legal help and the translator.

12. When would the title deed be ready?

A copy of what was signed at the Notary is normally ready that same day but it really depends on the Notary office or how busy they are that day. Please keep in mind that after the signing of the property at the Notary, we would still have to pay the appropriate taxes and then register the property at the appropriate Land Registry. This procedure normally takes a few months to finish. Also, please take note that if you have a local mortgage then the local bank would have to register the property and that they would have the finished deeds.

13. How much money should I have in my bank for the taxes and for the maintenance of my property per year?

Normally, one should have around €1500-2000 for the year to maintain a property that was bought in the price range of €150.000-200.000. There is the wealth tax, €500 – 600, the IBI tax €200-400, the community dues €300-800 and rest for the payments of your water and electric bills. Please keep in mind that this is just an estimate to help you plan a bit but it does vary from property to property.

14. How can I pay these taxes?

All of these taxes and utilities can be paid by direct debit except for the non resident “wealth” tax. If you are a non-resident and do not live in Spain, it is advisable to appoint a fiscal representative to avoid any hassle. PSI Consultants can do this work for you.

15. Is there a need to prepare a Spanish will?

Yes, it is advisable to do a Spanish will. A local will does help to avoid time-consuming legal problems for your heirs and having a Spanish will make sure that we will avoid complicated translations, certifications and procedures for your family and other beneficiaries.


16. What is a capital gains tax and how much would it be if I sell my property?

The capital gains tax is a tax for the price for a non-resident home owner and currently it is 18% on the amount gained. If you are aged 65 or older and have been a Spanish habitual resident owning the property for at least 3 years then you are exempt from capital gains tax when you sell your property.

17. What is a wealth tax?

The wealth tax or the non-resident tax is a tax set up by the Spanish Tax Office to individuals owning properties in Spain who are non-residents.

18. For any extensions on the property, do I need a permit?

Definitely, a permit is needed for any extensions to your property, like a new garage or to add a swimming pool. Planning permission from the local town hall is required.

19. How to apply for Spanish residency?

Legally, anyone who is in Spanish territory for more than 183 days in the calendar year has to apply for Spanish residency. In addition, if you would like to live in Spain on a permanent basis; or would like to avail of continuous medical attention; and/or are pensioners receiving the pension in Spain; you would need to apply for residency. PSI Consultants can help you apply for residency.