What is the process for buying real estate in Spain?

The process of buying property in Andalusia may seem complicated at first, but you don’t have to go through it alone. It’s a good idea to seek the assistance of a law firm and experienced agents who can help you navigate the entire process smoothly and stress-free.

The process of purchasing real estate in Spain varies depending on whether you are buying on the primary market (from a developer) or the secondary market. We offer contacts to many independent law firms in Andalusia, including Polish-speaking ones, which significantly facilitates communication with the person overseeing the entire process. The lawyer represents only your interests, acting completely independently of the agency selling the property. All contracts can be signed in person or by a proxy.

Buying property in Spain on the primary market

1. Reservation

To reserve a property with a developer – whether under construction or “off-plan” (i.e., before construction begins) – you must pay a reservation deposit of up to 1% of the property’s value (several thousand euros); this amount varies depending on the developer.

It is worth noting that developers in Spain are not open to any price negotiations. If the project does not yet have a building permit at the time of reservation, further formalities are suspended until the developer obtains it.

Once the developer obtains the building permit – in most cases approximately 2–3 months after the reservation – the development contract is signed and an advance payment is made, amounting to approximately 30% of the price plus VAT.

2. Development Contract

Before concluding the agreement, the law firm verifies the following documents and circumstances:

• confirmation that the plot designated for the project has the appropriate zoning for construction,
• confirmation of obtaining the building permit and the developer’s ability to obtain the first occupancy license (Licencia de Primera Ocupación – LPO) upon completion of the project,
• verification that the developer provides a bank guarantee or insurance policy—securing funds paid during the project’s implementation—in accordance with Spanish law; in the primary market, buyers’ payments must be secured by a bank guarantee. This ensures that you will not lose your money, even if the developer fails to fulfill the contract.
• Analysis of the developer’s financial situation to assess their credibility and stability.
• Confirmation that the developer holds the required insurance,
• Verification of the contract’s content for compliance with applicable laws and the extent of protection of the buyer’s interests.

Before making a payment and entering into the contract, the buyer is required to submit documents confirming the legal origin of the funds intended for the purchase of the property (e.g., income from professional activities, sale of another property, deposits, inheritance) – in accordance with the provisions of the Anti-Money Laundering Act (AML).

The development contract is the primary document governing the rights and obligations of the parties, specifically defining:

• the payment schedule and method,
• the project completion date,
• the developer’s obligation to provide a bank guarantee,
• the escrow account into which payments are made during construction,
• the required insurance policies that the developer is obligated to maintain,
• architectural plans and technical specifications of the project (constituting integral appendices to the agreement).

Depending on the project schedule, further payments in installments may be required during construction. Typically, 50–70% of the property price is paid upon signing the deed of sale.

3. Notarial Deed

The deed of purchase for real estate in Spain is executed in the form of a notarial deed before a notary. Before signing it, the law firm verifies the legal status of the property, specifically confirming:

• the removal of the developer’s mortgage encumbrances from the property,
• the assignment of an individual cadastral number to the property,
• the issuance of a certificate of completion,
• insurance and warranties – including for the structure (Seguro Decenal), installations, and equipment,
• the obtaining of the First Occupancy License (LPO).

The final step will be the registration of ownership in the Real Estate Registry and the transfer of utility contracts (electricity, water).

If purchasing a property with a mortgage, it is recommended to submit a loan application at least two months in advance to ensure a smooth process

We discuss the costs of purchasing real estate in Spain later in this article.

Purchasing real estate in Spain on the secondary market

1. Reservation and Deposit Payment

After selecting a property, it is recommended to reserve it for the duration of negotiations and the finalization of formal and legal matters.

In accordance with market practice, a purchase offer is first submitted, including the proposed price and terms of the transaction – often in the form of a reservation agreement.

In some cases – though this is not a standard requirement during the negotiation phase – a deposit of approximately 6,000 euros or about 1% of the property’s value is required. Much depends on the seller’s practice and the specifics of the transaction. Nevertheless, in certain situations, it can serve to strengthen the buyer’s negotiating position. This deposit is paid into the account of the real estate agent or law firm.

We recommend specifying all essential terms of the transaction as early as the offer stage, including, in particular, the scope of the property’s fixtures and fittings, the planned date for signing the preliminary agreement, any conditionality of the transaction on obtaining loan financing, and other relevant provisions.

If the seller accepts the offer price and the agreed terms of the transaction, the parties proceed to the subsequent stages of the process, described below. This is the point at which a detailed legal review (due diligence) begins.

If, during negotiations, the parties fail to reach an agreement on the price, the entire previously paid deposit is refunded to the buyer.

2. Verification of the property’s legal status

With the assistance of a lawyer who will represent the buyer and oversee the entire purchase process, a preliminary agreement will be prepared. This agreement contains the most important information regarding the purchase of the property – including the date of signing the notarial deed (typically one to two months for the secondary market).

As part of the legal due diligence, the following are verified in particular:

• nota simple, i.e., a current extract from the Property Registry (Registro de la Propiedad) – containing information about the owner, the property’s area, and any encumbrances (mortgages, restrictions),
• Licencia de Primera Ocupación (LPO) – confirmation that the property has all required building permits and has been approved for occupancy,
• the validity of the title and its registration in the seller’s name in the Property Registry (Registro de la Propiedad),
• the existence of any encumbrances – such as mortgages, loans, liens, easements, leases, or rental agreements,
• the absence of other obligations or claims encumbering the property,
• the consistency of the property’s details with the Cadastral Register (Catastro),
• compliance of the property with the local urban development plan (PGOU) and the absence of administrative sanctions of an urban planning nature (e.g., resulting from illegal extensions or unauthorized construction),
• the financial situation of the homeowners’ association (Comunidad de Propietarios), including any outstanding fees (e.g., association fees, property tax – IBI, utilities),
• an energy performance certificate containing information on the property’s energy efficiency.

The due diligence process, i.e., verification of the property’s legal status, begins after the offer is accepted. In practice, the law firm has a period of approximately 14 to a maximum of 21 days to analyze the documentation.

In addition to the legal analysis, we also recommend conducting a technical audit of the property. This is a relatively small cost compared to the value of the investment and allows for the detection of any potential technical defects. In particular, when purchasing on the secondary market, it is recommended to commission such an audit from an independent specialist.

3. Preliminary Agreement and Payment of the Deposit – the so-called Contrato de arras

Next, we proceed to the stage of signing the Agreement – the so-called Contrato de arras – where the date for signing the Deed of Ownership and the terms of purchase are specified. This agreement already guarantees your reservation of the property.

Upon signing the agreement, 10% of the property’s value (including the deposit already paid) plus VAT is paid.

If the seller withdraws from the contract, the buyer is entitled to a refund of the deposit in double the amount. Conversely, if the buyer withdraws from the purchase without a valid reason, the deposit is retained by the seller.

It should be emphasized, however, that in the event of the discovery of significant defects in the property or other circumstances affecting the purchase decision, the possibility of withdrawing from the contract and the rules for refunding funds depend on the provisions of the contract. Therefore, it is crucial that the contract be properly drafted and that the buyer’s interests be safeguarded by a law firm.

4. Deed of Sale (Escritura de compraventa)

The deed of sale is signed before a notary – usually 4–8 weeks after the preliminary agreement is concluded – either in person by the buyer or, based on a power of attorney, by their representative, such as a law firm. The notary drafts the deed of sale and oversees the proper conduct of the transaction. Please note that the notarial deed is drawn up in Spanish.

The remaining portion of the property price, payable upon signing the notarial deed, is most often settled in the form of a bank check (cheque bancario)—issued by a Spanish bank for the agreed amount. A less common method is a bank transfer, executed on the day of the transaction.

It should be noted that issuing a bank check usually involves an additional fee, so it is advisable to clarify the terms with the bank in advance and – if possible – negotiate the commission amount before the planned transaction.

A notary in Spain is a public official who oversees the legality and formal correctness of a transaction, acting impartially and without representing the interests of either party. Their role is to verify the parties’ identities, ensure the deed complies with applicable law, confirm that the parties understand the implications of the document being signed, and give the transaction legal validity.

Therefore, they do not replace the role of a lawyer acting on behalf of the buyer. For this reason, it is recommended to work with a law firm that provides full support and safeguards the client’s interests at every stage of the transaction.

When purchasing real estate with a mortgage, the financing bank is also present at the signing of the notarial deed. At the same time, two agreements are concluded – the real estate purchase agreement and the mortgage agreement.

If the property being purchased is encumbered by a mortgage, this obligation is typically paid off on the day the notarial deed is signed. In such a situation, a bank representative acting on behalf of the seller is also present at the notary’s office.

This process requires the prior preparation of all necessary documentation, and a portion of the purchase price – intended for the repayment of the existing mortgage – is transferred via a separate bank check made out to the seller’s bank.

After signing the notarial deed, the buyer receives an abridged copy of the deed from the notary.

It is on the day the notarial deed is signed – after all formal conditions have been met and payments settled – that the keys to the property are handed over. At this point, the buyer becomes the property’s full owner.

This is a moment that for many people marks the culmination of the entire process, yet simultaneously the beginning of a new chapter: life in the sun, an investment, or the fulfillment of dreams.

5. Other steps to finalize the property purchase process in Spain include:

• paying the transfer tax (for the secondary market) or VAT and notary fees (for the primary market),
• collecting the copy of the notarial deed,
• filing the document with the Property Registry (Registro de la Propiedad) to register ownership in the new owner’s name,
• reporting the change of ownership to the Cadastral Registry,
• transferring utility contracts (electricity, water, internet),
• notifying the homeowners’ association of the change of ownership and updating the information for local tax purposes.

A law firm handles all these procedures comprehensively, processing payments and administrative formalities using the client’s Spanish bank account.

Transaction costs for purchasing real estate in Spain

Approximately 8%–13% of the property’s value should be added to the purchase price. These costs include taxes, notary fees, legal fees, and other charges – which vary depending on the specific Autonomous Community.

What are the transaction costs for purchasing real estate in Andalusia?

1. Taxes

Secondary market: 7% property transfer tax (ITP)

Primary market: 10% VAT

1.2% tax on civil-legal transactions – the so-called AJD

2. Legal costs

• lawyer: 1% of the transaction value + 21% VAT
• Notary fee: from approx. 1,000 euros to 3,000 euros – depending on the transaction amount and the number of parties included in the deed
• Registration fee – land registry – typically 50–70% of the notary fee

3. Mortgage costs

• Stamp duty (AJD): 1.2% of the loan amount – this cost is borne by the bank, as required by law since 2019, and therefore does not constitute a cost for the buyer

• Mortgage registration fee: 1%–1.5% of the principal

4. Other costs

• Costs of signing utility contracts (water, electricity, phone): from approx. 500 euros
• Cost of the N.I.E. number: approx. 200 euros + 21% VAT per person

Documents and formalities required to purchase real estate in Spain

Before proceeding with the purchase of real estate in Spain, it is necessary to prepare specific documents and meet formal requirements to ensure the transaction proceeds smoothly.

1. N.I.E. number

2. Bank account in Spain

3. Notarized power of attorney

4. Separation of property (if applicable)

5. Financial documents (source of funds/AML)

6. Identity document

How to obtain an N.I.E. number in Spain?

Foreigners planning to purchase real estate in Spain are required to obtain an N.I.E. number (Número de Identidad de Extranjero), which is the equivalent of the Polish tax identification number (NIP).

An application for an N.I.E. number can be submitted:

• at the Spanish Embassy in Warsaw,
• directly in Spain – at a branch of the Policía Nacional.

However, it should be noted that the waiting time in Poland is often significantly longer than in Spain. For this reason, we recommend submitting the application directly on-site – in Spain – where the procedure typically takes about 3–4 weeks.

The N.I.E. number is essential for completing a real estate purchase transaction, as well as for carrying out many administrative tasks, such as signing contracts for utility services or filing tax returns.

The most convenient solution is to grant power of attorney to a chosen lawyer, who can apply for an N.I.E. number on behalf of the client.

Bank account in Spain – how to open one?

To begin the formalities related to the purchase of real estate and legal services, it is necessary to open a bank account in Spain. The account will be used to make payments related to the purchase of real estate, as well as to settle ongoing obligations, such as utility bills and taxes.

When opening an account, you must prepare the following documents (translated into Spanish):

• a copy of your ID card or passport,
• a document confirming your residential address (e.g., an energy or water bill issued in your name and address in Poland),
• documents confirming the source of income and the amount of earnings (e.g., last year’s tax return, a certificate from your employer),
• documents confirming the origin of the funds intended for the purchase of real estate in Spain (e.g., a deed of sale for the property, a document confirming receipt of an inheritance, bank statements),
• a letter of recommendation from a bank in Poland (if required),
• N.I.E. number

After purchasing the property, the bank account is used for ongoing payments – in particular for utility bills and property tax – most often via direct debit (domiciliación bancaria).

Power of attorney for purchasing eeal estate in Spain

Many clients choose to grant a notarized power of attorney to their lawyers so they can act on their behalf during the real estate purchase process.

A power of attorney may be granted:

• in Spain – before a notary public, which is the simplest solution (estimated cost: approx. 100–200 euros),

• at the Spanish consulate in the client’s country of residence,

• in the client’s country of residence – before a local notary.

If the power of attorney is granted outside of Spain, it must be properly prepared, specifically by obtaining an Apostille – in accordance with the Hague Convention – and having it certified by a sworn translator into Spanish so that the document can be effectively used in Spain.

Separation of property in Spain

If separation of property applies, it is necessary to submit the relevant document to a notary. This document must be translated by a certified translator and bear an Apostille.

Support at every stage

We have over 20 years of experience in real estate consulting and brokerage. We fully understand the needs and expectations of Polish clients, and we are familiar with all the procedures necessary for a safe and efficient real estate purchase in Spain.

Together with a team of trusted specialists, we provide comprehensive support at every stage – from selecting the right location and finding a property, through assistance in choosing a law firm and notary, to finalizing the transaction.

We also offer services related to remodeling, interior design, and interior finishing, as well as comprehensive property management and rental services.