From a legal point of view buying a property in Spain can have many complications and peculiarities. As shown in the previous section - Financial Issues - there are many different taxes and duties that the buyer have to arrange. Apart from this there are a number of other difficulties that a buyer can experience, which can end up costing a lot of money if they are not solved in time.

Below we have made a short introduction to some of the most important legal matters when buying a property. This information is only a guide and is not complete. We strongly recommend seeking professional legal advice, as the cost of any mistake or missing is much higher than the cost of contracting a lawyer.

Initially
When you have decided that you want to buy a property in Spain you need to obtain a fiscal number (NIE). It is a good idea to arrange this in advanced as it is needed immediately after the purchase (i.e. to be able to pay the stamp duty) and it can take some time to get in order. Another issue you have to think about initially is if you are going to make Spain your fiscal residence. This decision is important, as it will have influence on the amount of tax you pay for the sale of a property and the annual cost of having a property. If you are staying for more than 183 days in Spain a year it is a legal requirement that you become a resident.

Before you sign any contract to buy a property there are a number of things you have to make sure are in order regarding to the house, the former owner and the government.

First of all you need a proof, which shows that the seller is the owner of the property. The only way to control this is to get a certificate of the title deed of the property from the property register (Registro de propiedad). It is only the people named on the title deed that have the right to sell the property.

The seller of a second hand property should provide you with receipts of payments of the real estate tax and the wealth tax for the last year. If this tax is not paid the new owner will be liable for up to 1 year of payment as it is attached to the property and not a specific person.

To make sure that the description of the land and the property given by the vendor is correct you have to check the Catestro Certificate, which is the only legally valid description of the property.

If you are buying a property with any community charges you also need to make sure that they have been paid up to date. You will also have to take a look at the rules of the community as they can have legal influence on you and your property.

It can also be recommended to make sure that the local government doesn't have any plans about the area where the property is located and to take a look at the house plan at the town planning department. If the property is located near the coast you have to make sure that it complies with the Coastal law of 1988.

Pre Contract
In Spain there exists two types of contracts to buy a property - a private contract and a public contract. The private contract is legally binding as the public contract but doesn't have the same use. Normally the private contract is used as a pre-contract previous to signing the public contract before a public notary.

There also exist different types of private contracts and with different uses. It is normal to first sign a reservation agreement, where the buyer pays down a deposit of 3000-6000€ to take the property of the market. The reservation contract is a simple form of private contract and is used to give the buyer time enough to get the outstanding 10%, which is normal to pay in deposit in a private contract. If there is a short time span between signing the reservation agreement and the public contract it is a common practise not to sign a full private contract.
The private contract normally includes more detailed information than the reservation contract about the purchase. This contracts sets out all the conditions of the purchase like the agreed price for the property, what is included in the price, how it should be paid, the state of the property, date of sale, etc. It will also set out conditions like who will be responsible for costs and taxes of the transaction. Make sure you understand all elements of this contract as it can include costs, which are normally due to be paid by the vendor (i.e. the plusvalia). Spanish law doesn't always specifically mention who must pay which tax, it is enough that it is paid. Although the contract is legally binding it is normal to include penalties in case of non-performance by either party. This is to avoid a long lawsuit (which can take years in Spain) and to make sure that the other part will get an economical penalty for not performing.

There also exist a number of pre contracts where it is not legally binding to finally purchase the property. An option contract is an example of a none binding contract where the vendor gives the buyer an option to buy a property under fixed conditions (price, state of property etc.) and for a fixed amount of time. This type of contract will normally cost the buyer a fee to reserve the right to buy the property.

The Contract
As mentioned above there exists two types of legally binding contracts to buy a property, the private contract and the public contract. There normally exists a gap of time between signing the private and the public contract. This is due to a number of facts such as the waiting time for an appointment with a public notary, the time it can take for the buyer to get the money ready and the seller might still have to move private items from the property etc. As the private contract is binding it is a good way to secure the agreement in this time span.

Although the private contract is perfectly legal and binding it cannot be inscribed in the property register until it has been signed before a public notary. This will affect you as a buyer if you need to proof that the property is yours (i.e. for obtaining a loan) and will protect you against charges made in the property by the former owner.

The contract needs to be signed before the notary by both the vendor and the buyer (it is important that all the buyers and owners according to the public registry are there to sign or that they have given an attorney power for someone to sign on their behalf). This is called the signing of the Escritura and is whereby the notary officially confirms that the contract is legal and that the money has been paid. Normally the notary will give you a signed copy (copia simple) at this stage.

The original escritura thereafter has to be presented to the Property Register for inscription. Many notaries have this service included in their fee. When this has been done you will receive the original escritura that now is a public deed (escritura publica), which is the official statement of ownership of the property.

The last things to do is to pay the property tax, IVA and stamp duty and you also have to send a notification to the catastral office and the municipality to pay the yearly taxes etc.