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The Country Property Buyers Guide by Villas & Fincas Andalusia

Buying a property in Spain with Villas & Fincas

Buyers Guide

Once you've chosen a suitable property and the purchase price and conditions are agreed, Villas and Fincas will prepare a letter of intent, to be signed by both parties. The letter of intent states the conditions of the sale and the reservation period during which your lawyer is to check the property on legal details and to draw up a private purchase contract. If you haven't already appointed a lawyer now would be a good time to do so.

What to expect from your Spanish lawyer

As well as giving legal advice at each stage of the process, your lawyer will check the property registry to investigate any encumbrances or debts registered against the property. If anything untoward is discovered he will advise on how best to deal with it and whether you should, in fact, proceed at all. In case of proceeding your lawyer will draw up a private purchase or option contract which states all the conditions of the sale. When completion takes place your lawyer will lodge the title deed with the land registry and then take care of any remaining formalities such as opening accounts with local utility companies in your name and the payment of any transfer taxes.

Exchange contracts

With the offer accepted and the letter of intent signed, the next step is to exchange private contracts, 'Contrato privado de compraventa', or Contrato de opción de compra’,which states all the conditions of the sale. This usually happens within two weeks from the offer being accepted and is where your lawyer really starts to earn his money by conducting property searches and making sure that there are no outstanding debts or problems attached to the property, for which you may be liable. At the signing of the private contract you will be required to pay a non-refundable deposit of 10% of the purchase price.

Final completion and registration of the title deed

Final completion takes place when the title deeds are signed before a notary and you pay the balance of the purchase price. The signed deed is lodged with the land registry and your lawyer will take care of the remaining formalities such as payment of the relevant transfer taxes.In addition to the purchase price of your new property, you will also need to pay transfer tax, lawyers fees, notary fees and registry fees. The purchaser should budget to pay app. 10% on top of the value of the purchase price.

Each year, owners of Real Estate must pay IBI, which is a tax issued by the local council for all owners of property. If you are purchasing a resale property, your lawyer will ensure that you are given copies of previous receipts as proof of past payments.

The final tax to mention is a wealth tax, which is charged annually in connection with the value of the property you own.


It is important to prepare for the purchase as much as possible in advance. Choosing the right professionals to handle the sale is essential. Knowing all of the costs and taxes in advance is particularly recommended in order to avoid unexpected costs after the purchase. The following is rough breakdown of the costs for the buyer:

Transfer Tax – 8% of purchase price up to 400.000€ and 9% over the amount in between 400.000€ and 700.000€ and 10% over the remaining sum if the purchase price is higher. Legal Fees – approximately 1% of the purchase price Notary & Registration Fees – approximately 1% of purchase price Municipal ´Plusvalia´ Tax is Tax paid every time a property is transferred and based on the increase of the value of the land during the time that the seller has owned the property and calculated in accordance with the rateable values, it does not depend on the selling price. This payment is subject to negotiation between vendor and purchaser and is stated in one of the clauses of the private contract as to who is responsible for this cost. Not to be confused with the Capital Gains tax. This is a form of income tax, to be paid over the difference in purchase and selling price at the moment you sell your property.


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