DON’T BUY PROPERTY In Spain Until You Watch This Video! Expert Lawyer Talks about buying property in Spain

Buying a property in Spain can be an exciting investment or life-changing relocation, but without the right legal guidance, it can also lead to unexpected costs and challenges. In this expert interview, Miguel Manzanares, founder of Manzanares Abogados, shares crucial legal insights for anyone considering purchasing real estate in Spain.

With nearly 30 years of experience in property and tax law, Miguel reveals the key legal checks, hidden costs, and essential paperwork needed to ensure a smooth and secure property purchase. Whether you’re buying in Málaga, Barcelona, Marbella, or anywhere in Spain, this guide will help you avoid costly mistakes.

🔎 The Due Diligence Process: What to Check Before Buying

The first step in purchasing a property in Spain is conducting thorough due diligence. Before committing to a purchase, a lawyer should investigate multiple aspects of the property to ensure there are no legal complications.

The key areas of due diligence include:

1. Land Registry Check (Registro de la Propiedad) – Confirms ownership, any outstanding debts, and if the property is registered correctly.
2. Zoning & Planning Regulations – Ensures the property was legally built and complies with local regulations.
3. Community of Owners (Comunidad de Propietarios) – Reviews community rules, fees, and restrictions (e.g., short-term rental allowances).
4. Utility Bills & Debts – Verifies that electricity, water, and property taxes are up to date.
5. Minutes of Community Meetings – Reveals any pending legal disputes, upcoming costs, or major renovations planned by the community.

A lawyer will provide a due diligence report, summarizing all findings before proceeding with the purchase. This ensures there are no hidden legal risks before signing any contracts.

📜 Legal Requirements & Essential Paperwork

Before you can buy property in Spain, you’ll need to complete a few legal and financial formalities:

• NIE Number (Número de Identificación de Extranjero) – A tax identification number required for all property purchases in Spain.
• Power of Attorney (Poder Notarial) – Allows your lawyer to sign contracts and complete paperwork on your behalf if you’re not in Spain.
• Spanish Bank Account – Required to pay property-related expenses, including taxes and utilities.

Your lawyer can handle most of these processes, ensuring everything is completed legally and efficiently before finalizing the purchase.

💰 Taxes & Hidden Costs of Buying Property in Spain

One of the most common mistakes buyers make is underestimating the real costs of purchasing a property in Spain. In addition to the sale price, you’ll need to budget for several additional expenses:

• Resale Property (Second-Hand Homes) Taxes:

  • Transfer Tax (ITP): Varies by region, but in Andalucía, it’s 7% of the purchase price.
  • Legal Fees, Notary, & Land Registry: Approx. 2% of the property value.
  • Total Additional Costs: Around 9% of the purchase price.

• New Build Property Taxes:

  • VAT (IVA): 10% on the property price.
  • Stamp Duty (AJD): 1.2% in Andalucía.
  • Legal Fees, Notary, & Land Registry: Around 2%.
  • Total Additional Costs: Around 13% of the purchase price.

These costs should always be factored into your budget when buying in Spain to avoid surprises.

🚗 Freehold vs. Leasehold: What Do You Actually Own?

A common question from international buyers, especially those from the UK, is whether Spanish property is freehold or leasehold.

The good news? 99% of properties in Spain are freehold, meaning you fully own the property and the land it sits on. Leasehold properties do exist but are extremely rare and usually tied to specific historical or government-owned land.

Always verify ownership with your lawyer before purchasing to avoid misunderstandings.

🏡 Exit Costs: What Happens When You Sell?

While most buyers focus on the purchase costs, few consider the exit costs when selling their property in Spain.

• Capital Gains Tax (Impuesto sobre la Renta de No Residentes – IRNR):
  
  • 19% for EU/EEA residents.
  • 24% for non-EU residents.
• Plusvalía Tax: A municipal tax based on the increase in land value since the last purchase.
• Agent Fees: Typically 5% of the sale price if you use a real estate agency.

Understanding these exit costs can help you plan your investment long-term and avoid financial losses.

📑 Should You Consult a Lawyer Before Finding a Property?

Many buyers believe they should find a property first and then hire a lawyer, but experts recommend the opposite approach.

Consulting a lawyer before searching for a property helps you:
✅ Understand your tax obligations and structure your purchase correctly.
✅ Choose the best way to own the property (e.g., personal, joint, company).
✅ Ensure you are financially and legally prepared before making an offer.

A lawyer can also advise on rental income taxes, inheritance laws, and wealth tax, depending on your situation.

🏦 Power of Attorney, NIE & Bank Accounts – What You Need to Know

If you are not living in Spain, having a power of attorney can make the buying process much easier. This legal document allows your lawyer to:

✔ Sign contracts on your behalf.
✔ Obtain your NIE number (required for property purchases).
✔ Open a Spanish bank account for property-related expenses.
✔ Complete the property transaction without you needing to be in Spain.

Setting up a power of attorney in Spanien is cheaper and faster than doing it abroad, costing around €75 – €80 at a Spanish notary.

🚨 Final Tips Before Buying Property in Spain

✔ Consult a Lawyer First – Avoid costly mistakes by getting legal advice before committing to a purchase.
✔ Budget for Additional Costs – Factor in taxes, fees, and legal expenses beyond the purchase price.
✔ Check Resale Costs – Understand capital gains tax and exit costs before investing.
✔ Know Your Legal Rights – Ensure the property is freehold, legally registered, and debt-free.
✔ Use Power of Attorney – Simplify the buying process if you’re not in Spain full-time.

Thinking about buying property in Spain? Hallo Heime can help! Contact us to find the perfect property on the Costa del Sol.

📞 Call/WhatsApp: +34 645 58 60 63
🌍 Visit our website: Hi Homes Marbella
📧 Email: info@hihomes.es

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