Property purchases in Spain: a practical guide for law firms

From the outside, a property purchase in Spain looks like a single event: you sign before a notary and collect the keys. From inside a law firm it is something else entirely — a two- or three-month project with chained stages, half a dozen parties involved (seller, buyer, bank, notary, gestoría, the building’s community of owners) and a list of deadlines where missing one costs real money. And when the buyer is foreign — which along much of the coast is the normal case, not the exception — every stage picks up an extra requirement and an extra language.

This guide walks through the process the way a firm actually runs it, flagging where the professional risk sits and the exact places where the workflow tends to break.

The engagement and the pre-contract checks

Everything starts with due diligence on the property, which is where the lawyer adds the most value and carries the most risk. The minimum:

• A nota simple from the Land Registry (Registro de la Propiedad), to verify ownership, the property’s registered description and any charges: mortgages, attachments, easements, resolutory conditions.
• The cadastral position — and above all whether the Registry description, the Catastro record and the physical reality actually match. Discrepancies in floor area or boundaries won’t kill a deal by themselves, but they need to surface before the deposit contract, not after.
• Planning status and the building’s legal condition: licences, any open enforcement files, and for older buildings the technical inspection (ITE or its regional equivalent) and what it found.
• The community of owners: a certificate that fees are up to date and — the point that gets missed most often — any special levies (derramas) already approved but not yet billed. A levy voted before the sale can be an expensive surprise for the buyer.
• IBI paid up, bearing in mind that the property itself secures the last few years of unpaid bills.

Every check produces documents — registry notes, certificates, licences, community minutes — that must be findable, and in their final version, on signing day. It pays to decide on day one where each of them lives.

The deposit contract (arras)

With clean due diligence, the parties sign the contrato de arras. Drafting technique matters more here than it looks. Article 1454 of the Civil Code governs arras penitenciales — the buyer may walk away forfeiting the deposit; the seller, by returning it doubled — but the case law demands that this withdrawal right be stipulated clearly. If the contract merely mentions “arras” or a “deposit”, a court may read it as arras confirmatorias: a simple advance on the price, with no right to walk away and the door open to a claim for specific performance or ordinary damages.

For the firm, the deposit contract is also the document that sets the calendar: the deadline for the deed, the allocation of costs, how any charges found in due diligence will be handled, and any conditions precedent. That agreed deadline becomes the date everything else revolves around.

If there’s a mortgage, the bank sets the pace

When the buyer needs financing, the timeline stops being something the parties control. Law 5/2019 on real-estate credit agreements requires the borrower to receive the FEIN and the rest of the pre-contractual documentation at least ten days before signing, and within that window the borrower must appear before the notary for the prior advisory deed (acta previa). No acta, no mortgage deed.

In practice this means the completion date isn’t set by your firm: it’s set by the chain of bank–valuation–FEIN–acta. A deposit contract with an optimistic deadline plus a slow bank is the classic recipe for negotiating extensions with the deposit at stake. Build slack into the agreed dates, and watch the FEIN date the way you’d watch a procedural deadline.

The public deed before the notary

Completion at the notary is the culmination, but for the firm it is mostly a test of preparation: an updated charges check, the funds and provisions reconciled, the cancellation of the seller’s mortgage coordinated if there is one, and confirmation that everyone who must appear will appear — with sufficient powers of attorney where anyone signs through a representative. If the buyer doesn’t speak Spanish, they will need an interpreter or a bilingual power of attorney granted in advance; improvising that the day before rarely ends well.

Taxes: it depends what you buy, and where

The tax side of a purchase has a clear structure and numbers that move:

• Resale property: the buyer pays transfer tax (ITP), at a rate set by each autonomous community. There is no single national rate, and several regions apply reduced rates by age, family size or primary residence — you have to check the regional rules for the specific property.
• New build: the sale carries VAT, plus stamp duty (AJD), whose rate is also regional.
• Municipal capital gains tax (plusvalía, IIVTNU): in principle the seller’s bill — but when the seller is not resident in Spain, the buyer becomes the substitute taxpayer and effectively pays, which is worth settling explicitly in the deed.

The firm doesn’t choose the rates, but it does answer for the client knowing what the tax will cost and for it being filed on time.

After completion: the part nobody sees

A signed deed doesn’t close the file. There is still the tax filing on modelo 600 (or the VAT and AJD equivalents), lodging the authorised copy at the Land Registry to record the new ownership, the change of holder at the Catastro, and switching the utilities, the IBI direct debit and the community fees into the buyer’s name. It is unglamorous work with concrete administrative deadlines — and it is exactly the kind of task that slips once the file is “already signed” and the team’s attention has moved to the next matter.

When the client is foreign

With a foreign buyer or seller, the process is the same but with extra layers:

• NIE: without a foreigner identification number there is no deed and no tax filing. It’s the first procedure to launch, because its timeline is not under the firm’s control.
• The 3% withholding: if the seller is non-resident, the buyer is legally obliged to withhold 3% of the price and pay it in via modelo 211, under article 25.2 of the Non-Residents Income Tax Law (TRLIRNR), on account of the seller’s tax on the gain. Miss it and the buyer — your client — becomes liable, with the property itself securing the debt.
• Bank account, powers of attorney and apostilles: opening a Spanish account, powers granted abroad with their apostille and translation, and coordinating remote signings all add weeks to the calendar if they’re not started early.
• The bilingual communication load: every milestone gets explained twice — to the other side, and to the client in their own language — and a client buying from two thousand kilometres away asks “any news on my purchase?” with an entirely understandable frequency.

Where it actually goes wrong

Almost no conveyancing file fails for lack of legal knowledge. The real failures are operational: the nota simple from six weeks ago that nobody refreshed before completion; three versions of the deposit contract in three inboxes and no one certain which is current; the arras deadline that lived in the head of a lawyer who went on holiday; the modelo 211 paid late because “the bank was handling it”. And in the background, a foreign client writing every week because nobody tells them what stage their purchase is at.

How Mandato helps

Mandato doesn’t lodge deeds or pull registry notes: that remains the firm’s work with the Registry and the Catastro. What it does is hold the workflow together. Real-estate matters are organised by file and by stage, with deadlines visible to the whole team, so the arras deadline or the 3% withholding date never depends on anyone’s memory. All the documents of the transaction — notes, certificates, drafts, the deed — live in one place, with the current version clearly identified. And the international buyer follows their purchase in their own language through the client portal, which turns the weekly “any news?” into a question clients answer for themselves.

A well-run purchase is invisible: the dates hold, the documents appear, and the client signs calmly. That outcome, which looks like luck, is almost always structure. The lawyer supplies the law; the workflow has to be built.