Purchase of Real Estate

Sale of Real Estate

Inheritance and Wills


Purchase of Real Estate

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What is the NIE and in what cases is it mandatory to have it?

The Foreigner Identity Number (NIE, by its Spanish initials) is a personal, unique and exclusive number issued by the Spanish National Police and assigned for identification purposes to those foreigners who maintain economic, professional or social relationships with Spain.

A foreign citizen is required to have a NIE in order to carry out any type of economic or business transaction in Spain. The NIE must appear on all official or administrative documents issued to said person or signed by him/her in Spain, such as a deed of sale, an employment contract, or a bank account application form.

While in Spain, foreigners can apply for a NIE at any Police Station, Immigration Office, or at the Consular Office closest to their place of residence. Foreigners can apply in person or through a representative duly accredited through power of attorney.

The NIE is a permanent number. It never expires and therefore does not need to be renewed.

What is a “nota simple” from the Land Registry?

A “nota simple” is an informational document issued by the Land Registry that contains information about a specific property, such as the identity of the owner, its address, the built and livable spaces, and the cadastral reference number. It also includes any charges, mortgages, encumbrances, or any other liens that may exist on the property, as well as other relevant details, e.g. if it is part of the social housing system.

The “nota simple” is most likely the first document requested when buying, selling, or mortgaging a property, since it provides a lot of useful information about it.

I have decided to buy a house in Spain as a second residence and my local lawyer insists that I grant him/her a power of attorney, but I don't understand its advantages, and I don't know if I can trust him/her.

If you usually reside outside of Spain and do not have the necessary availability to travel at specific times, cannot afford the expenses involved in traveling from abroad, or do not wish to incur such expenses, it is advisable to appoint a local representative (ideally your lawyer) who can act on your behalf and carry out certain transactions that would otherwise require you to appear in person.

The official appointment of a representative is made by signing a power of attorney, which is a public document granted in the presence of a notary public. The power of attorney explains in detail the powers conferred by the grantor to his/her representative, who is referred to as “proxy.”

The power of attorney is a very effective resource for certain legal actions that involve legal, administrative, and tax procedures and require the signature of the interested party, such as purchase and sale transactions, donations, inheritances, leases, and more. These procedures can be as diverse as granting a deed, obtaining the NIE, taking out a home insurance policy, or paying taxes.

The cost of granting a power of attorney in Spain ranges between 45 and 70 euros. The person granting it may revoke the power of attorney at any time and in the presence of any notary.

We agree with you that granting a power of attorney is a gesture of maximum trust in the person we designate as our representative, and we understand that there may be misgivings about the potential use of a document of this nature. At Real(i)ty & Law we will be happy to discuss and clarify any doubts you may have in this regard and to offer the advice needed for your peace of mind.

Is a power of attorney granted in another country valid in Spain?

Powers of attorney can also be granted abroad, either before a local notary or at the Consulate of Spain in that country.

A power of attorney shall be valid internationally if an administrative requirement called “legalization” or apostille is added to it, which simply consists of an annotation on the document that certifies its authenticity. Specifically, the so-called Apostille of The Hague recognizes the legal validity of a document between signatory countries of the Hague Convention, which nowadays are almost all countries in the world.

If the power of attorney is to be granted abroad for later use in Spain, it is critical that the clients are advised by their lawyer in Spain during the process of drafting and signing the document. Your Spanish lawyer shall verify that the document complies with the legal provisions required in this country and that it does not have any formal errors that may void the representation afterwards, that is, he/she shall ensure in advance that the document can be used in Spain for the purpose for which it is granted.

I am buying a property in Spain. Do I need to open a bank account?

If you are financing the purchase with a mortgage loan granted by a bank in Spain, then you shall be required to open a bank account with that entity in order to pay your loan´s monthly instalments.

Be that as it may, it is always convenient to have a bank account in Spain to set up direct payments for your utility bills (water, electricity, gas, etc.), homeowner association dues, Real Estate taxes (IBI), and rubbish collection fees. If the owner does not reside in Spain, direct or auto payments will certainly avoid many headaches in the long term. You will only need to have sufficient funds in the account to ensure that invoices are paid regularly, and to avoid surcharges or even disconnection of services and cancellation of contracts due to non-payment.

In fact, most supply companies already require a direct payment method to finalize the contract, so the holder must have a bank account in his/her name for this purpose.

What expenses are involved in buying a property in Spain?

In general, the costs associated with the sale of a property are the following:

Notary fees

Related to the signing of the title deed before a notary public. This expense is regulated by law and it ranges between 0.2% and 0.5% of the total value of the property.

Registry fees

Expenditure incurred when registering the title deed of purchase in the Land Registry.

Law agent fees

Payable to the agent who performs the administrative procedures derived from the sale and purchase transaction, such as the registration of the deed and the liquidation of the taxes applicable to the transfer of the property.

Legal fees

Fees charged by the lawyer hired to carry out the property acquisition procedure. In general, legal fees amount to 1% of the purchase price, plus applicable VAT. At Real(i)ty & Law, we charge a minimum fee of 2000 euros plus VAT in the event that the 1% of the purchase price is lower than this amount.


Payable only in case of new construction properties, it amounts to 10% of the purchase price.

Transfer Tax and Stamp Duties

1. Transfer Tax

It is paid only in the case of second-hand property acquisitions, that is, in second or subsequent transfers.

The tax rate varies depending on the Autonomous Community where the property is located. For example, if we purchase a home in Marbella, within the Autonomous Community of Andalusia, we will pay an amount equivalent to 7% of the purchase price as Transfer Tax. However, if the home is located in Barcelona, within the Autonomous Community of Catalonia, the tax rate will amount to 10% of the price of the property, and 11% for properties whose value exceeds one million euros.

2. Stamp Duties

Like VAT, it is applicable only to the purchase of new construction properties and the tax rate also depends on the Autonomous Community in which the property is located. In Andalusia, for example, it is currently equivalent to 1.2% of the purchase price.

I have purchased a new construction home. For how long are the developer and —where appropriate— the builder legally responsible for material damage caused by flaws or defects in the property?

The Spanish Law on Building Ordinances (Ley de Ordenación de la Edificación) establishes different guarantee periods depending on the type of damages that may appear in the buildings. We must keep in mind that the commencing time of these guarantee periods is not when the deed is signed or the home is transferred, but prior to that –when the Work Acceptance Act is signed.

  • During the first year, the builder shall be liable for material damages caused by poor execution, that is, flaws or defects that affect the completion or finishing of the works, such as broken or cracked flooring, wooden flooring in poor condition, chips on the walls, doors that do not close properly, and the like.
  • For three years, all agents involved in the building process shall be liable for material damage caused by flaws or defects that may affect the habitability of the property, such as humidity, water leaks, cracks, noise, or problems with the heating, among others.
  • For ten years, the same agents mentioned above shall be liable for damages resulting from flaws or defects that affect the structural safety of the building, and that may jeopardize its mechanical resistance and stability. These are defects in the foundation, support beams, load-bearing walls, floors, roofs, and other structural elements.

The developer is legally required to have damage insurance (the so-called ten year construction damage policy) to ensure repairs for this type of damage during the term of the guarantee.

It is critical to be able to prove that the defect was detected within the guarantee period. To that end, it will be necessary to document the fact in the best possible way, and to notify those responsible as soon as the flaw is detected.

Regardless of the construction defect in question, the affected party has two years from the moment they become aware of the damage to file a claim against those responsible. Once those two years have elapsed, any possible actions shall prescribe.

I'm considering buying a commercial space and remodeling it into an open-plan loft. Can I change the commercial use of the property to use it as a home?

As a general rule, it should not be any problem as long as you get the necessary permit from the Town Hall to change its commercial use.

However, if the regime of the commercial space is that of horizontal property, that is, if it is not a separate construction, but it is enclosed within a larger building, we recommend to make sure in advance that the change of use is not expressly prohibited by the constitutive title or in the by-laws of the Owners Association. If it is prohibited, the authorization of all the owners shall be required.

In the same way, if structural changes that affect common elements (for example, modifying the façade to open windows or move the entrance door) are needed, you should have the unanimous consent of the board of owners.

Once the remodeling work is complete, the new physical status of the property shall be formalized by means of a deed granted before a Notary Public. The deed shall then be recorded in the Land Registry.

The share coefficient (quota) in the building of the new home will be the same as that of the prior commercial space.

I am buying a house off plan and have already made several payments, but the construction has not yet started. Should the developer provide any guarantee?

Yes, from the moment the building permit is obtained, the developer is legally obliged to guarantee the reimbursement of any amounts paid plus legal interest. To comply, the developer must purchase a surety insurance with an insurance company authorized to operate in Spain or through a bank guarantee issued by duly authorized credit institutions.

The goal is to ensure the reimbursement of any amounts paid by the buyers in the event that the construction is not started or completed.

Thus, the developer must obtain and provide the buyer with a bank guarantee or an individual insurance policy that identifies the property for the acquisition of which the amounts paid in advance are intended.

I have signed a reservation agreement and paid a deposit to buy an apartment, but then I have seen another one that I like better. Can I cancel the reservation and get my deposit back?

It is always possible to cancel a reservation, but if the seller has already accepted the offer and signed the reservation agreement, either in person or through a representative, you will most likely lose your deposit.

The acceptance of a reservation agreement obliges the seller to take the property out the market, so this money serves as compensation for the time in which the property has not been available for sale, and for potential lost business opportunities.

I need to get a mortgage loan to buy a house, and I do not know what fees the bank can charge me.

After the amendment of the Spanish Mortgage Law passed in 2019, allocation of costs arising from the formalization of a mortgage loan is as follows:

– The applicant for the mortgage (the borrower) shall pay the appraisal fees and the cost for the Nota Simple of the property.

– The bank (the lender) shall be responsible for the costs associated with the notary, Land Registry, and law agent fees, as well as Stamp Duties.

Regarding the opening commission, the Court of Justice of the European Union established in a 2020 ruling that said commission shall be considered void on the basis of abusive practice unless the due transparency control that any mortgage loan must comply with is passed, and detailed loan contract information is given to the client. As a result of this ruling, most banking entities in Spain have stopped charging opening commissions to those who apply for a mortgage.

I have two separate plots of land and I would like to know if I can join them together into a single, larger one.

First, it is necessary to verify with the Land Registry that they indeed appear as two independent registry entries. Perhaps the plot was divided in two in the past for certain reasons, but it actually remained a single piece of land for registration purposes.

If they are indeed two independent parcels, each one with its own plot number in the Land Registry, and they are adjoining, the “aggregation” or joining of land plots may be carried out. For this purpose, the necessary municipal permit or a “no need” certificate must be obtained.

The aggregation or joining of the plots shall be formalized in a new public deed. The resulting parcel shall be registered in the Land Registry with a new property number and a new description.

Joining non-adjacent parcels is much more complex and its feasibility should be studied  case by case.

Sale of Real Estate

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Am I required to hire a real estate agency to sell my house?

No. In Spain you are not required to hire a real estate agency to carry out purchase and sale transactions. It is the seller’s or buyer’s personal decision, depending on their needs. However, we recommend you to consider all the advantages associated with these qualified professionals. Real estate agents know the market well, will assist you with sales strategies and negotiating skills, and will bring lots of potential buyers to see your property.

In the event that a real estate agent is involved,  the seller is responsible for the payment of his/her commission fees, which usually range between 5% and 7% of the sale price.

What is the energy efficiency certificate?

It is a document issued by a qualified technician that indicates energy consumption, CO2 emissions, and the energy efficiency rating of a property, as well as recommendations for possible actions, technically feasible, to improve said efficiency.

The owner or developer is required to have an energy efficiency certificate for new construction homes or commercial spaces and for those that are to be sold or rented. No energy certificate is required for garages or storage rooms.

This certificate is valid for ten years, except when the energy rating is G (the lowest possible), in which case it is five years. Its cost ranges between €150 and €300 depending on the surface of the property.

I signed a private contract for the sale of my house some days ago, but another interested party has now made me a higher offer. Can I cancel the contract and accept the new offer without any consequences?

It depends. The private sales contract is a binding agreement, that is, once signed, the buyer and the seller are obliged to comply with it.

Typically, the so-called “down payment” (arras in Spanish) is established in the contract, i.e., a part of the price is paid to ensure that both the seller and the buyer fulfill the obligation acquired (that is, to sell and to buy the property, respectively). The type of deposit determines the consequences that non-compliance has for each one of the parties. In general, if the seller backs out, they shall be obliged to return double the amount received. This means that if, for example, the deposit was 20,000 euros, the seller should return 40,000 euros to the buyer.

Another unlikely option is that the buyer accepts the unilateral cancellation by the seller, but even so, they will still have the option of filing a lawsuit to recover the expenses that the failed operation has entailed (legal fees, technical reports, travel costs). And finally, the buyer can also decide to force the sale, which would drag you as the seller into a long legal process. If the buyer were to win the lawsuit in court, you would be legally bound to sell the property to him/her.

I have an apartment with two parking spaces and one of my neighbors is interested in buying one of them. Is there any legal obstacle to do so or can I sell it to whomever I want?

First of all, you should check in your property deed whether the parking space your neighbor is interested in buying appears as an independent property or as an “inseparable annex” to the apartment. If it is registered as an independent property in the Land Registry, it can be sold separately without any problem. However, if it is an inseparable annex to the home, it shall be considered —as its name indicates— a part of it, and it can only be sold jointly with the apartment, as a whole.

I have built a house on a piece of land I own. Since the plot is quite large, I am considering selling a part of it and thus recover some of the expenses that the construction has entailed. Is that possible?

This process is known as “segregation of land” and, for it to be carried out, the following requirements must be met:

  • The segregated plot (i.e., the one that is separated from the largest parcel, called matrix) must have the minimum buildable floor area required by law.
  • Access to public road is required for both plots.
  • The segregation shall be carried out in such a way that the portion of the plot in which the house is built continues to comply with the applicable urban regulations.
  • The necessary municipal permit or a “no need” certificate shall be obtained.

Segregation shall be formalized by means of a deed granted before a Notary Public, and must be recorded in the Land Registry.

What expenses, taxes, and fees should I take into account when selling a property?

In general, the costs that the seller shall be responsible for are the following:

  • Commission fees of the real estate agent

As previously indicated, there is no obligation to hire a real estate agency to carry out the transaction, but, if an agent is involved, his/her commission fee shall be borne by the seller. These fees generally range between 5% and 7% of the sale price.

  • Tax on the Increase in the Value of Urban Land (“Plusvalía”)

It is a municipal tax adopted on the basis of the increase in value of the land compared to the moment in which the property was acquired.

  • Capital Gains Tax

The gain or loss obtained with the transfer shall be stated when filing the annual tax report on the income of natural persons.

However, if the seller does not reside in Spain for tax purposes, a 3% of the sale price shall be withheld automatically upon signing the deed. This amount shall be paid to the Public Treasury as a Non-Resident Income Tax. Non-residents in Spain whose country of tax residence is a Member State of the EU, Iceland, Norway, or Liechtenstein are subject to the payment of 19% of the profit obtained from the sale. In the case of other States, the rate applicable to the gain is 24%. 

  • Certificate of Energy Efficiency (in the case of homes or commercial spaces)

It is a certificate issued by a qualified technician that measures the energy consumption and CO2 emissions of a property in order to know if it meets minimum energy efficiency. Its cost ranges between €150 and €300, depending on the surface area.

  • Mortgage cancellation fees

If the property is encumbered with a mortgage, this should be canceled prior to the sale or simultaneously. The seller shall pay the bank commission for early repayment and any other expenses related to the deed of cancellation of the loan and the lifting of the charges in the Land Registry, as well as fees of the paralegal in charge of these procedures.

  • Legal fees

Invoice for professional legal services payable to the lawyer hired to carry out the property sale procedure. In general, legal fees amount to 1% of the sale price, plus applicable VAT. At Real(i)ty & Law, a minimum fee of 2000 euros plus VAT shall be applied in the event that 1% of the sale price is less than this amount.

Of course, the property must be free of debts at the time of sale, so that, if there are any, the buyer may withhold from the seller the amounts necessary to settle them.

I just sold a home in Spain and, being a tax resident in another country, the Spanish Inland Revenue has automatically withheld 3% of the sale price, despite the fact that the transaction does not generate any real profit. Is this correct?

Yes, that is correct. The Tax Authorities consider this withholding a payment on account of your tax obligations in Spain. However, you can request the return of said amount and, if you can prove using the proper documentation that the sale has not actually generated any profit, the Treasury should proceed to return the withholding.

What expenses can be deducted when calculating the profit made from selling a property?

The following expenses can be deducted:

  • Notary fees
  • Land Registry fees
  • Law agent fees
  • Legal fees
  • VAT paid at the time of purchase
  • Transfer Tax or Stamp Duties
  • Real estate agency commission
  • Comprehensive remodeling of the housing unit
  • Plusvalía Tax
  • Energy efficiency certificate

Inheritance and Wills

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I signed a will years ago, but now I would like to modify it. What should I do?

You only need to sign a new will before a notary public in which you state the new provisions. This means that a person can make as many wills as they want. The valid will shall always be the one granted last.

My husband and I have decided to sign a joint will, since we both want to divide our assets in the same way. Is it possible?

No. In Spain two or more people can not sign a will jointly, whether they do so for mutual benefit or for a third party.

Neither shall a will that two or more Spanish citizens grant jointly abroad be valid in Spain, even when the laws of the given country allow it.

Additionally, a will is a very intimate act –and no one except for the person involved can grant it. This means that the signing of a will cannot be delegated to anyone or carried out through a representative.

My father has recently been deceased. The bank has blocked his account, preventing us from withdrawing money, even though we have a power of attorney. Is this action legal?

Powers of attorney cease to be valid at the time the person who granted them dies, so when your father died, the power of attorney ceased to have effect.

Keep in mind that a bank account is a deposit contract, so the bank is obliged to guard the funds that are in it. The bank can only transfer said funds to those who prove to be the “new owners” of the account, that is, the heirs. To that effect, banks usually require a copy of the deed of acceptance of inheritance and proof of submission of inheritance tax.

What happens when a person dies without having granted a will?

Dying without a will does not prevent heirs from receiving the assets that correspond to them. Heirs have the right to receive the assets of the inheritance whether or not there is a will.

If it is verified by the Spanish Registry of Last Wills that in fact the deceased person did not grant a will, anyone with a legitimate interest may request a declaration of intestate heirs, which shall be processed before a notary. The notary will draw up an act in which he/she declares who has the status of heir. Then, the process of partition (distribution) and adjudication of the assets shall be carried out.

It is important to note that the absence of a will can leave the widowed spouse in a delicate situation. The reason is that, in Spain, the legal heirs are in this order:

  1. The descendants (children, grandchildren, and so on)
  2. The ancestors (parents and grandparents)
  3. The spouse
  4. Siblings and nephews and nieces
  5. Collaterals up to the fourth degree
  6. The Spanish State

This means that, in the absence of a will, the above mentioned order should be strictly enforced. That means that a great-grandchild could inherit before the husband or wife of the deceased, and that the assets that the widowed spouse would receive would be significantly less than what they would otherwise receive in the event of having a will. If there are descendants, the law establishes for the widowed spouse only life usufruct (use and enjoyment for life) of one third of the inheritance. If there are no descendants, but ascendants, the widow or widower shall have the right to inherit the usufruct of half of the inheritance.

What is the difference between a will and a declaration of heirs?

A will is a document that natural persons grant in life in which they name their heirs and establish how they wish their assets to be distributed after their death.

The declaration of heirs, on the other hand, is a document that is formalized before a notary and that is intended to determine who are the heirs of a person who died without having made a will or whose will was annulled. Thus, the declaration of heirs is carried out after the death and is collected in a notarial deed that indicates who are the relatives with the right to inherit.

Is a will signed in another country valid in Spain even if that person's assets are only in Spain?

Yes, a will granted abroad can take effect in Spain if specific requirements established by the rules of private international law are met. In the same way, a will granted by a foreign citizen in Spain regarding assets existing in another country can also be valid in that country if these rules are followed.

When an immigration element or some type of international connection is included in a succession, it is extremely important that the will be signed before a notary and that it includes a clause to express choice of the applicable law. That is, the person who grants the will chooses which law shall govern their inheritance: the law of his/her place of residence or the law of his/her nationality.

Is it possible to disinherit a child in Spain?

It is possible, but only under exceptional circumstances. Our Common Law establishes that a part of the inheritance, the so-called “legitimate”, must necessarily go to the son(s)/daughter(s) or descendants.

Some of the causes of disinheritance of a child set forth by law are the following:

– When the child abandons the parent and denies him/her food

– When the child mistreats the parent physically or psychologically

– When the child has been sentenced by final judgement for attempting on the parent’s life, or has been convicted of a serious criminal offence for causing injury or exercising violence against their parent, spouse or partner, or ascendants or descendants.

In the same way, children can also disinherit their parents when the parents have abandoned, prostituted or corrupted them; when they have lost parental authority by court order; when they have been denied support, or if one parent has made an attempt on the life of the other [parent].

Am I legally bound to accept an inheritance?

No. Acceptance of an inheritance is a voluntary and free act. If you do not wish to accept it, for whatever reasons, you can refuse it. In order to do so, you must go to a notary and sign a deed in which you express your voluntary renounce.

Once you renounce the inheritance, the decision shall be generally irrevocable.

I am heir to an inheritance with debts, but I don't want this inheritance to cost me any of my own money. How can I know if it is convenient for me to accept the inheritance?

As established by our Civil Code, heirs are liable for the debts of the inheritance not only with its assets, but also with their own assets. To that end, in the event that there are debts and you ignore whether or not the inheritance assets are enough to settle them, it is recommended to accept the inheritance “for the benefit of inventory.” Thus, as heir, you shall only be liable for the debts of the deceased to the extent of the value of the inherited assets, so that your own assets shall never be compromised.

My brother refuses to accept my mother's inheritance, but I have already expressed my acceptance before a notary. Can I make use of the assets that correspond to me, or do I necessarily have to wait for him to sign the inheritance deed?

Any heir whose partitioning is hindered by another heir has the possibility to visit a notary public so that he/she tries to “unblock” the matter to a certain extent.

A notification shall be sent by the notary to the hesitant heir, who then will have 30 days to decide whether to accept his part of the inheritance or waive it. In addition, the notary will warn him that, in the event he does not express his decision within that time, it shall be assumed that the inheritance has been accepted.


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When will I be considered a tax resident in Spain?

According to the Spanish Non-Resident Income Tax Law, natural persons are considered to have their regular place of residence in Spain when any of the following circumstances applies:

  • The person is in Spain for more than 183 days during a calendar year. In order to determine the period of stay, sporadic absences are taken into account, except those when the tax residency in another country is proven. 
  • The person’s spouse (not legally separated) and under-age dependent children reside in Spain, except when proven otherwise. 
  • The main base, headquarters, or core of the person’s economic activities is located in Spain, directly or indirectly.

In other words, only one of the three conditions above must be met for the person to be considered a resident in Spain. For tax purposes, the main consequence of being a resident is that taxes must be paid in Spain on the individual’s worldwide income –that is, on all salaries, pensions, benefits, property income, dividends from any source, or capital income from the sale of properties, regardless of the place where these occurred and the country of residence of the payer.

Can I live in Spain but pay my taxes in another country?

Although each country has its own definition of tax residence, in general terms you are considered a tax resident in the country where you spend more than 6 months in a calendar year. Accordingly, the Spanish Tax Agency considers that a natural person is subject to paying taxes in this country as a resident if he/she is in our territory for more than 183 days between January 1 and December 31, the period that comprises the tax year in Spain. Thus, if you live in Spain for more than 183 days each year, regardless of whether they are non-consecutive periods, you shall be required to pay taxes here on your worldwide income.

Under some circumstances, two countries may consider you a tax resident at the same time. Fortunately, most States have agreements to avoid double taxation –these agreements keep the taxpayer from paying twice for the same taxable, and usually include regulations to determine in which one of the two countries you qualify as a resident.

If the tax agreement does not offer a solution for your specific case or your situation is particularly complex, it is advisable to contact the tax authorities of each country for clarification.

Why do the taxes I have to pay when buying a property vary depending on where the property is located?

The main reason is that the State has delegated to the Autonomous Communities certain tax issues, such as those applicable to the purchase of a property. Therefore, the different Autonomous Communities have the authority to determine the rates, reductions[deductions] in the taxable base, and bonuses applicable to each one of the taxes. Hence, the tax burden is higher or lower depending on which Autonomous Community the property is located in.

Examples of tax collections transferred to the Autonomous Communities are Transfer Tax, Stamp Duties, Inheritance and Donations Tax, and Wealth Tax, all of them related to being the owner of a property or having a right to it.

Let us imagine, for instance, that we are going to acquire a newly built property (new construction). Being a newly built home, the taxes applicable to the purchase will be VAT (Value Added Tax) and Stamp Duties.

VAT is a State tax that is levied on the consumption of goods or services and that is based on the products or services themselves, regardless of who purchases them and/or the place where such goods or services are delivered.

When it comes to the acquisition of real estate, in general terms VAT currently amounts to 10% of the purchase price. This percentage, as previously indicated, is the same throughout the national territory.

However, Stamp Duties is a tax assigned to the Autonomous Communities, so the tax amount to be paid will depend on the Community in which the property is located.

If the property to acquire is a second-hand home, we would not be subject to payment of VAT and Stamp Duties, but Transfer Tax. And the Transfer Tax rate is also determined by each Autonomous Community, so it will be different depending on the location of the dwelling.

Hence, the geographical location of the property is a determining factor in fiscal and tax matters.

What are the annual costs for owning a property in Spain?

The owner of a property in Spain shall pay several taxes and cover a number of expenses on a regular basis.

  • Personal Income Tax

Annual tax applicable only to individuals who are residents in Spain for tax purposes. The primary home is not taxed in the Personal Income Tax, but a second residence or vacation home is.

  • Non Resident Income Tax

Annual tax applied to individuals who do not reside in Spain for tax purposes. This tax is levied on income obtained by way of leasing, in the event that the property is rented, or for own use by its owners as a second residence.

  • Wealth Tax

a) Individuals whose place of residence is on Spanish territory

These taxpayers must declare all property or rights of financial nature  owned on December 31, regardless of where the property is located or where they can exercise their rights.

b) Individuals whose place of residence is not in Spain but own property or rights that are located, can be exercised, or have to be fulfilled on Spanish territory

These taxpayers must declare only the property and rights they own on December 31, only if these are located, can be exercised, or have to be fulfilled on Spanish territory.

In both cases, any charges and levies related to such property or rights, as well as debts on capital invested in them, can be deducted when calculating Wealth Tax.

Wealth Tax is managed by the Autonomous Communities, who can apply reductions in the exempt minimum (which is currently €700,000), modify the rate, and approve deductions and bonuses in the tax rate. Such is the case of the Community of Andalusia and the Community of Madrid, where there is a 100% discount. That is, no Wealth Tax needs to be paid.

  • Local Rates/Property Tax (IBI, by its Spanish initials)

It is a municipal tax calculated from the cadastral value of the property and payable on an annual basis.

  • Rubbish Collection Fees

Paid to the Town Hall of the municipality where the property is located for providing solid urban waste collection and treatment services.

  • Owners Association Fees

The owners of homes, plots, garages, storage rooms, or other types of commercial spaces that are part of an owners association shall be subject to the regular payment of fees aimed to cover general expenses of said community. Fees will be calculated according to the coefficient of participation of each owner.

  • Home Insurance Policy

Owners should take out a home insurance policy for their property that covers contingencies that may affect both the property and its contents. Contrary to what is generally believed, the insurance policy of the Owners Association only offers coverage for accidents that may occur in the common areas shared by the owners of the building or housing development, but it does not cover those that take place inside the homes, or any damages that owners may cause to third parties.


Calle Lanzarote n.º 2, Edificio Lorca, 2º B

29631 Benalmádena (Málaga)


Tel.: (+34) 951 409 250

WhatsApp: (+34) 640 089 738

Opening hours:

Monday to Friday, from 8:00 a.m. to 3:00 p.m.

Free initial consultation

We offer all our potential clients a free initial consultation. Understandably, any legal procedure raises doubts. We do not want that a lack of knowledge or inaccurate advice leads to an unwise decision that hurts your interests.

Treat yourself to some peace of mind, and contact us by phone, email, or whatsapp. We look forward to working with you.

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