If you are about to buy, sell, or rent out a property, this may well be the first time you undertake this process, or at least the first time in Spain. It is entirely understandable not to be familiar with every term, deadline, or tax obligation that a transaction of this nature entails. At CPG Abogados, we meet clients, week after week, who arrive at their first appointment with very similar questions: precisely what they are required to sign, what financial obligations they are genuinely assuming, and whom they can rely upon throughout the process. This guide sets out the matters we address most frequently, together with the errors we most often have to remedy when a transaction has been carried out without prior advice.
THE LAWYER’S ROLE IN A PROPERTY TRANSACTION
Whether you are buying or selling, it is common not to be an expert in the field, and there is no requirement that you should be. This is precisely the purpose of a real estate lawyer: to ensure the transaction proceeds with genuine legal certainty, in accordance with the law, without requiring you to acquire legal expertise on an improvised basis.
Why does it matter?
There are two principal reasons why the involvement of a real estate lawyer proves essential:
- So that you understand precisely the content of what you are signing. The deposit contract, the sale contract, the bank’s binding mortgage offer, the sale deed, and the mortgage deed all incorporate legal and technical language that is not always readily accessible, even upon careful reading.
- To prevent disputes before they arise. Neither party wishes to be confronted with unforeseen difficulties when buying or selling a property: undetected charges, debts that were never theirs, or uncertainty regarding the true solvency of the buyer.
What do they actually do?
A real estate lawyer safeguards your property rights and is specialised in sale contracts, lease agreements, inheritance matters, and, more broadly, all matters concerning the property market. Their most common responsibilities include:
- Advising on and drafting contractual documentation.
- Providing legal advice on the acquisition of existing properties, off-plan properties, or properties under construction.
- Court representation in cases of illegal occupation, seizures, claims, co-ownership disputes, or conflicts within the homeowners’ association.
- Regularising property documentation where the registered description does not correspond to reality.
- Advising on horizontal property regimes and co-ownership arrangements.
HOW TO TELL YOU HAVE CHOSEN THE RIGHT LAWYER
Not every professional offering to guide you through a property transaction provides equivalent guarantees. Prior to engaging anyone, it is advisable to verify the following matters:
That they are duly licensed and actively practising. In Spain, only lawyers registered with a Bar Association and authorised to practise, under the General Statute of the Spanish Legal Profession (Royal Decree 135/2021), may lawfully act as “abogado”. This may be verified within minutes through the General Registry of Lawyers maintained by the Spanish General Council of Lawyers (abogacia.es). An “advisor” or “consultant” who is not registered does not bear the same enforceable professional liability.
That they hold professional liability insurance. This is mandatory for every licensed lawyer in Spain and constitutes an additional safeguard should a serious advisory error later come to light. It is entirely legitimate to enquire about this before engaging a lawyer.
That they act independently from the agency or developer. In numerous transactions, the agency itself recommends a lawyer with whom it maintains a commercial relationship, at times remunerated by way of commission. This does not constitute an unlawful practice, though it does represent a conflict of interest of which one should be aware: an independent lawyer acts exclusively in your interest, not in the interest of concluding the sale.
If you are a foreign national, that they can demonstrate genuine experience with clients in your situation. Buying, selling, or renting property in Spain as a non-resident entails additional layers of complexity: obtaining an NIE, opening a bank account, the non-resident tax regime and, where applicable, tax or legal residency planning. It is pertinent to enquire how many comparable transactions they have handled for clients from your country of origin or in your specific circumstances.
That you know with certainty who will be handling your matter. At certain firms, the individual with whom initial contact is made subsequently delegates the entire transaction to a professional with insufficient experience. Working as a team presents no inherent difficulty, though you are entitled to know who is signing off on the advice and who will be available should an urgent matter arise.
WHAT A LAWYER IDENTIFIES BEFORE YOU SIGN ANYTHING
Property due diligence does not constitute a mere administrative formality; it is the stage at which those difficulties are identified that, absent legal representation, tend to become apparent only once it is too late, that is, once a sum of money has been paid or a contractual commitment entered into.
Homeowners’ community debts
Under article 9 of the Spanish Horizontal Property Act, whoever acquires a property is liable, together with the property itself, for the seller’s community debts corresponding to the current year and the previous three calendar years, irrespective of the fact that such debts are not attributable to them. A lawyer requires, prior to signing, the certificate confirming the seller is up to date, and, where debt remains outstanding, arranges for it to be deducted from the price or withheld at the notary.
Missing occupation licence
The occupation licence certifies that a property satisfies the planning requirements necessary for habitation. Spain’s Supreme Court, in a Plenary ruling of 10 September 2012 that continues to constitute leading doctrine, established that its absence does not automatically give rise to a right of termination, though it does so where that absence results from planning irregularities that prevent the licence from being obtained and leave the property without genuine conditions of habitability. In such cases, the buyer is entitled to terminate the contract and recover everything paid, together with expenses and interest. A lawyer verifies the existence and status of this licence prior to signing, not once it has been discovered that water or electricity cannot be connected.
What the “nota simple” does not disclose
The nota simple issued by the Land Registry discloses ownership, the property description, and any registered mortgages or liens. What it does not disclose is equally significant: unpaid community debts do not appear there, nor do planning restrictions, which fall within the remit of the town hall rather than the Registry. It is, moreover, a snapshot that may become outdated within days. A lawyer knows what additional documentation must be cross-checked against the nota simple in order to obtain an accurate, up-to-date picture.
Co-ownership, inheritances, and easements
It is not unusual for a property to have several owners following an inheritance divided among siblings, or to carry a right of way in favour of an adjoining plot. Neither circumstance is invariably apparent, and both may substantially restrict your free use of the property if not identified prior to the deposit being paid.
THE NOTARY IS NOT YOUR LAWYER
This is a common source of confusion, particularly among those coming from jurisdictions where the notarial system operates differently: the notary certifies the act, verifies the parties’ identity and legal capacity, and confirms that what is signed corresponds to what has been agreed between them. It is not, however, the notary’s role to negotiate on your behalf, to opine on whether the price is fair, to investigate charges not reflected in the Registry, or to explain each clause to you calmly in your own language prior to signing. That function belongs to your lawyer, who acts on your behalf from before the signing and remains available thereafter.
YOUR LAWYER IS NOT THE SAME AS THE ESTATE AGENT
The estate agent holds a recognised qualification and possesses knowledge of the market, taxation, and valuation, and their involvement is essential to locating the property and managing the commercial aspects of the transaction. Their role, however, differs from that of a lawyer: they are typically remunerated by the seller, or by both parties, and their objective is for the transaction to be completed. A lawyer, by contrast, represents solely your interests as the buyer, with fees that do not depend on the sale closing swiftly or at a particular price.
IF YOU ARE BUYING
A lawyer assumes responsibility for every legal matter that may arise from the purchase and reviews the transaction as a whole in order to ensure full legal compliance. In particular, they:
- Assess the genuine risks of the transaction: registered charges, community debts, planning status.
- Negotiate the deposit contract and its terms, rather than allowing a generic template to be signed with no scope for negotiation.
- Resolve any doubt that may arise during the process, from the initial viewing through to the signing.
VAT or transfer tax, according to the nature of the property. The acquisition of a new-build property entails payment of VAT at the rate of 10%, together with Stamp Duty, ranging between 0.5% and 2% depending on the region. The acquisition of a resale property, by contrast, entails Transfer Tax, ranging between 6% and 13% depending on the region, together with such reductions as may be applicable.
The 3% withholding where the seller is not a Spanish tax resident. In such circumstances, the law obliges the buyer to withhold 3% of the price, remit it to the tax authorities by way of form 211 within one month of the deed being executed, and provide the corresponding receipt to the seller. This is an obligation resting upon the buyer, not the seller: failure to comply may result in the debt ultimately encumbering the property itself.
IF YOU ARE SELLING
Selling likewise entails its own tax implications, and it is precisely in this regard that advice obtained prior to signing proves most valuable, rather than advice sought only after a tax assessment has been received.
Personal income tax on the capital gain. The difference between the acquisition and transfer value is taxed under personal income tax as a capital gain, included within the savings tax base, at rates ranging from 19% to 30% depending on the amount. Exemptions of particular relevance exist: where you have reached the age of 65 and transfer your main residence, understood as your effective home for at least the preceding three years, the gain is fully exempt. There is likewise an exemption for reinvestment in another main residence, available to other taxpayers, provided the statutory deadlines and requirements are met.
Municipal capital gains tax (plusvalía municipal). This local tax is levied on the increase in value of urban land and, as a general rule, is payable by the seller. Since the 2021 reform, it is possible to elect between the objective method and the real method, applying whichever proves more favourable. Where the transfer results in an actual loss, this tax ought not to be charged.
Property tax (IBI) and other costs. The annual property tax and other costs associated with the transfer likewise merit review prior to signing, in order to establish precisely the net amount that will ultimately be received.
A lawyer explains in advance precisely what will be paid in connection with the sale and which exemptions may lawfully be applied, rather than leaving this information to be discovered only upon filing the following year’s tax return.
IF YOU ARE RENTING OUT A PROPERTY
Where you intend to rent out your property, every landlord’s principal concern lies in a tenant who fails to fulfil their obligation to pay rent. A lawyer drafts a tenancy agreement suited to your particular circumstances, verifies compliance with the legal requirements necessary for its full enforceability, and incorporates the guarantees and clauses that genuinely protect you should any difficulty arise. They likewise intervene where disputes arise with the homeowners’ association in connection with the tenancy: the use of common areas, renovation works, the keeping of pets, or matters of general coexistence.
IF YOU REQUIRE A MORTGAGE AS A NON-RESIDENT
Financing available to non-residents tends to be more limited: banks typically lend between 60% and 70% of the lower of the valuation or the purchase price, as against the 80% customarily available to residents, which requires own funds of between 30% and 40%, in addition to the valuation fee and, where applicable, an arrangement fee. Processing times may be extended where sworn translations or apostilles of foreign documentation are not available. A lawyer coordinates such documentation sufficiently in advance so as not to breach the deadlines established in the deposit contract.
THE SPECIFIC MOMENTS WHERE THEY STEP IN
Before signing anything
This is the stage at which charges on the property and the position as to ownership are verified. Where the property is of a certain age, it is likewise advisable to consider a technical inspection confirming its planning and structural condition.
When applying for a mortgage
Where financing is required, a lawyer advises on which bank terms may reasonably be considered acceptable and confirms that what is signed in the mortgage deed corresponds precisely to what has been offered by the bank.
At the signing of the deed
This constitutes the most delicate stage of the process: booking the notary appointment, reviewing the draft deed, and being present on the day of signing. Where the seller held a mortgage over the property, an important nuance ought to be noted: the fact that such mortgage has been paid does not mean it has been cancelled at the Land Registry. There exist two distinct cancellations, the financial and the registry cancellation, and until the latter is processed, the mortgage remains registered. At the notarial act itself, part of the price is applied to settling that mortgage, and your lawyer ensures that, thereafter, the registry cancellation is also processed, not merely the payment. Your lawyer further explains each step of the process, from signing through to the handover of keys, and resolves any last-minute matter that may arise.
THE MOST FREQUENT ERRORS WE OBSERVE IN PRACTICE
Following years of experience handling property transactions, certain patterns emerge with a frequency greater than might be expected. We share these not with a view to causing alarm, but because prior awareness constitutes the most effective means of avoiding them:
- Signing the deposit contract drafted by the agency itself, without any prior review of the property’s charges or negotiation of its terms.
- Assuming a mortgage has been cancelled merely because the seller states it has been settled, without verifying the actual registry position.
- Discovering, once the keys have already been received, the existence of a community debt that becomes the responsibility of the new owner.
- Failing to plan the tax implications of the sale in advance, and facing a larger-than-anticipated tax assessment the following year.
- Placing complete trust in the notary, on the mistaken assumption that their role includes defending the interests of one party against the other.
HOW CAN CPG ABOGADOS HELP?
At CPG Abogados, we support our clients throughout the entire process of buying, selling, or renting out a property in Spain: comprehensive due diligence, reviewing and negotiating contracts, calculating and managing the tax implications of the transaction, providing support at the notary signing, and resolving any dispute that may subsequently arise.
