Purchasing Property

Lexidy Law Boutique SLP

Purchasing Property

P R O C E S S E X P L A I N E D

Prepatory Steps

• Grant Power of Attorney
• PoA is used to obtain and submit necessary documentation as well as purchase the property on your behalf
• Obtain Spanish Foreign Identification Number (NIE)
• Open a Spanish Bank Account

PURCHASING PROCESS

• Reserve Contract
• Usually 1000 EUR to 5000 EUR
• Due diligence is performed to obtain necessary documentation, to ensure the quality of the property, and to apply possible tax relief.
• Arras Agreement (Terms and Conditions of Sale)
• Down payment paid (usually 10% of price)

• Purchase Deed
• Signed at Public Notary Office
• 30 to 60 days after signing of Arras Agreement
• Register Property
• Submitted immediatley upon signing deed of purchase, normally takes 30 to 60 days to process

TAXATION

• TAXES ON PURCHASE
• ITP Tax
• Varies by the autonomous community in which the property resides.
• IAJD
• Tax on Documented Legal Acts. Applied at Registry.
• TAXES ON SALE OF PROPERTY
• Capital Gains
• Determined by difference in transfer and acqusition values
• TAXATION OF PROPERTIES OWNED BY NON-RESIDENTS
• Obtain Personal Tax ID Number
• Income Tax for Non-Residents
• Non-residents are subject to income and gains tax for Spanish sourced income
• Property Tax (IBI)
• Local tax assigned by Municipal Councils
• EXEMPTION FOR REINVESTMENT FOR TAXPAYERS IN EU, ICELAND, AND. NORWAY
• Sale of habitual residence in Spain is exempt from tax if reinvested into new habitual residence.
• Gains tax is applied to price difference if new residence is less valuable than sold residence

General Timeline

Normally

Purchase Deed and Register Property

Arras Agreement

Due Diligence

Reserve Contract

Prepatory Steps

30 to 60

Days