The process of buying a house is much the same as in other countries, however you should make yourself aware of who does what, and what they are called.

ABOGADO

A legally qualified lawyer who acts on behalf of the purchaser in the purchase of a property. In Spain a vendor does not normally instruct an abogado to act when selling a property.

CAPITAL GAINS TAX

A tax paid on the gain made on a property when it is sold.

ESCRITURA

Upon final payment, the vendors, will sign over the property before a notary. The document is known as an escritura. The original signed document is kept by the notary and he will issue a first legalised copy that he signs and stamps. This is then sent to the land registry where it is registered in the purchaser's name, free of all charges and encumbrances. Approximately one month later the deeds are ready for collection fully legalised. The transfer tax in the case of a resale property is normally paid at the time of signing the escritura.

GESTOR

A licensed person (accountant) who acts as a conveyancer on behalf of the purchaser in the purchase of a property. A gestor can also be appointed as a fiscal representative to administer the general paperwork arising for property owners in Spain .

HACIENDA

The Spanish tax authorities equivalent to the British Inland Revenue.

Impuesto sobre Bienes Inmuebles is an annual real estate tax.

I.V.A.

V.A.T. is known as I.V.A. in Spain and is applicable to the sale of all new property. There are different ratings that are as follows:

16% - plot only.

7% - plot with construction if the landowner is the developer.

7% - new ready built properies.

Resale properties are not subject to V.A.T.

LAND REGISTRY OFFICE (REGISTRO DE LA PROPIEDAD)

The land registry office is where all escrituras are inscribed. We will carry out all searches at the land registry office and any charges relating to the property will be registered here. Registry fees vary according to the land registry, and the charges are similar to that of a notary.

MAIN CONTRACT

A contract with special conditions attached to the sale of a property, such as deferred payments.

NEW PROPERTY

Property which is owned by and is bought directly from the developer. Seven percent V.A.T. is charged and half a percent tax is payable when declaring a new construction on a plot.

N.I.E.

The N.I.E. foreigner identity number is given to all non-residents buying a property in Spain .

NOTARY

Abogados or gestors must not be confused with notaries, notaries work for the government and function as an impartial witness to the signing of all public documents before their inscription in the property register. It is the responsibility of the notary to verify title to the property before giving good faith. He receives the transfer tax (applicable only to resale properties) on behalf of Hacienda (the Spanish tax authorities). Notaries fees vary according to region.

OPTION / RESERVATION CONTRACT

A document reserving a property and acting as a receipt for monies paid to that property.

PLUS VALIA

Plus Valia is a local tax calculated as a percentage of the difference in the increased value of the property from when it was last sold. The calculation is based on the rateable value, not the real value of the property and is a one time payment charged when a property changes hands. Each town hall defines the percentage and it varies according to municipality. Not all town halls enforce Plus Valia; although legally it is the responsibility of the vendor, it used to be customary for the purchaser to pay the tax. However, it is now becoming increasingly common for responsibility of the tax to lie with the vendor.

REFERENCIA CATASTRAL

The file number of the propertys registration in the land registry.

RESALE PROPERTY

Property which is owned by a private individual or company, not a developer. Six per cent transfer tax is payable.

TRANSFER TAX

All resale property bears a charge of six percent transfer tax but is exempt from V.A.T. The tax is paid to the notary who receives these funds on behalf of Hacienda. Transfer tax is not paid on new property although a duty of 0.5% is imposed when a newly built property is declared on a plot.

The information contained in this document is intended only as a guideline to prospective purchasers of rural and country property in Spain . It does not cover every aspect of Spanish property law and should not be used as a substitute for such. The figures quoted are correct at the time this document was written; it is therefore probably safe to assume that they may have changed since. For more up to date information contact our office personally or telephone the number on the front of this brochure.