Spain has received negative publicity for the much-publicised landgrab scenarios. These are now a thing of the past. However, you are advised to have PeregrineLaw perform a thorough check with Land Registry to check title and to be sure of clean title from the start.

Anyone wishing to buy or sell property in Spain must first obtain from the state – in person – a fiscal number for foreigners known as NIE (numero de identificacion de extranjeros).

Once you as the buyer have received your NIE, PeregrineLaw can then make an offer on your behalf. When the price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date.

A deposit of 10% is the normal amount placed to secure the deal. After this, if the buyer pulls out, they lose the full deposit, but should the seller decide not to go ahead, he/she must return double the amount of the deposit – i.e. 20% to the buyer.

If a property is purchased off-plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes.

On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of the notary. PeregrineLaw are able to ensure that this is done under Power of Attorney, should you so require. The buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.

Fees and Taxes:

•    Taxes and fees usually amount to around 10% of the total purchase price of the property.

•    Taxes depend on whether the property being purchased is new-build or resale. Currently, transfer tax of around 7% applies to resales, which includes stamp duty. For new-build properties, VAT (IVA) of 7% is payable in addition to 1% stamp duty.

•    On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller.

•    If the buyer is purchasing land or commercial property rather than residential, VAT is 16% as opposed to 7%. Stamp duty remains the same.

•    Legal fees will be around 1% of the final purchase price and the notary will charge around 0.5%.

•    Agents’ fees can vary from 2% - 15%, so be careful not to be ripped off!

TOP TIP: You are advised to have PeregrineLaw perform a thorough check with Land Registry to check title and to be sure of clean title from the start.