1) Initial steps: tax identification and NIE
Before you start, confirm the tax identification of all parties.
- Spanish nationals: a DNI or CIF already provides tax identification.
- Non-residents: they need an NIE/NIF and to register with the tax authorities (Form 030) in order to pay tax (the seller on the capital gain; the buyer on VAT or Transfer Tax, as applicable).
Useful references: Tax registration at the Tax Agency (AEAT) – Form 030; NIE appointment in Spain with the National Police (prior appointment); and, from abroad, the Spanish Consulate for your district (MAEC).
If the NIE does not arrive in time, you can apply for a provisional “M” NIF before the AEAT to file within the month following completion. With the NIE/NIF you can open a bank account and, where applicable, arrange a mortgage.
Would you like us to handle it for you? Bufete Frau – Real Estate.
2) Due diligence: checking the property and its legal status
Make sure that what is being sold matches what is registered and the physical reality.
- Land Registry extract (Nota Simple): description, ownership, charges and pending entries. Online request via Registradores de España.
- Cadastral certificate: surface area, boundaries, use and reference value (the minimum tax base). Consult the Cadastre Portal.
Check for charges (mortgages, easements, seizures). If any exist, decide whether to:
- Cancel them before signing (evidence of cancellation and a new, charge-free Nota Simple); or
- Subrogate or withhold amounts from the price, with the creditor’s authorisation.
Assess any special applicable rules: rural or urban land, licences, activity, protected heritage, coastal law, and so on.
3) Preliminary contracts: option, promise, earnest money and pre-agreement
When the due diligence is favourable, it is time to agree the preliminary instrument:
- Option to purchase: a preferential right for the buyer for an agreed term and price. It is advisable to register it if it encumbers the property.
- Promise of sale: the seller undertakes to sell within a set period; provide for a penalty on breach.
- Earnest money contract (arras), commonly penitential earnest money: the buyer pays a deposit (usually around 10%). If the buyer breaches, they lose the deposit; if the seller breaches, they return double.
- Pre-agreement: sets out the steps and reimbursable costs before the sale (useful where significant prior work is involved).
Useful legal framework: the Civil Code (earnest money and obligations) and the LAU 29/1994 for pre-emption and withdrawal rights in leases.
4) Closing due diligence: report and risks
Set out the analysis in a Due Diligence Report:
- Documents reviewed and conclusions by heading.
- Risks identified (planning, registry, tax, occupancy) and proposed mitigation.
- Recommendation: proceed, renegotiate or do not buy.
Where future litigation is possible, detail the strategy, costs, timescales and probabilities.
5) Public deed before a notary: documentation and costs
Why before a notary? The public deed grants public faith, allows registration at the Land Registry and makes you the owner against third parties. It can be signed at any notary in Spain, even with the parties in different cities through powers of attorney.
Usual documentation: Nota Simple, cadastral certificate, energy performance certificate, community certificate (if applicable), certificate of occupancy (depending on the region), the latest IBI receipt, powers of attorney, NIE, and so on. If there is a mortgage, the FEIN/ESIS and FIAE must be delivered in advance within the legal notice period (LCCI). Framework: Law 5/2019 on Real Estate Credit; guidance from the Bank of Spain (FEIN/FIAE).
Costs (who pays):
- Notary (state scale; approximately 0.3–0.5% depending on the amount).
- Land Registry (state scale; approximately €400–650).
- Taxes: on a new build or first transfer, VAT at 10% plus Stamp Duty (AJD) of 0.4–1.5% depending on the region; on a second transfer, Transfer Tax (ITP) at the regional rate.
- Agency (gestoría): settlement and registration.
As a general rule, unless otherwise agreed, the buyer bears most of the costs and the seller bears the first authorised copy (Civil Code).
6) After the sale: hidden defects and warranties
Normally no problems arise where there was good advice. If they do, distinguish between the situations:
- Hidden defects (not apparent at the time of purchase): the seller is liable if they prevent normal use of the property or if you would have paid less had you known.
- Time limit to claim under the warranty: six months from the purchase (art. 1484 et seq. of the Civil Code).
- Steps: expert report, notice to the seller, burofax and, failing agreement, a court claim.
- Relevant information withheld by the seller: nullity for error may be argued.
After the six-month period, another and more uncertain route remains available: an action for lack of conformity or nullity. Act quickly so as not to miss the deadlines. We help you assess, claim and, if necessary, litigate.
Legal advice with Bufete Frau
At Bufete Frau we are real estate lawyers in the Balearic Islands. We support you throughout the entire process: obtaining the NIE, due diligence, preliminary contracts, signing before the notary, taxation and after-sale matters. Legal certainty, clear timescales and no surprises.
