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Buying a property in Spain - Glossary

During the process of buying a property in Spain you will come across a number of Spanish legal terms and phrases, as well as non-legal terms and phrases.  We have provided below simple explanations of some of the most common terms and where you might come across them in your journey towards buying a property in Spain.

Basura

This is a local charge for refuse collection.  In some areas this charge is included with the IBI and in some areas it is separate.  Depending upon the area you may be charged monthly, quarterly, six-monthly or annually.  

Catastro

This is an administrative register of land and buildings.  It lists the details of all properties, rural and urban, and a value is assigned to each property.  This value is known as the “valor catastral” or the minimum tax value or rateable value of the property and it is this value upon which taxes such as IBI are based.  This registry differs from the property registry as it is more topographical.  
 

Certificate of habitation/Licence of first or second occupation

This is a document confirming that the property has been registered to be used as a dwelling.  Occasionally it is referred to as the “cedula”.  In areas where this document is issued as standard it is required for the completion meeting.  

Community of Property Owners 

In Spain where a building or development has communal areas a community of property owners is formed to ensure that the maintenance costs are covered and any necessary work carried out.  Each property within a development is responsible for a certain percentage of the fees.  

Completion

The completion of your purchase.  In Spain the meeting to complete your purchase takes place in the presence of a Notary.  

Contrato de arras

Sometimes abbreviated to “arras” or translated as “reserve contract” this document is the private agreement signed by the buyer and the seller in which both commit to the purchase and the latest possible date for completion is fixed.  Once this contract is signed, and the deposit paid, there are penalties for either party withdrawing from the purchase.  
 

Energy Performance Certificate

By law this certificate must be in place in order to sell a property in Spain.  It is a certificate confirming the energy efficiency of a property.  It is a document that the seller must obtain.  

Escritura

This is the Spanish word for a document signed in the presence of a Notary in Spain.  When your property purchase in Spain is completed an escritura de compraventa will be signed.  Many estate agents imply that the escritura has an inherent value but in fact it does not.  If the escritura for your purchase is lost this will have no bearing upon your status as a property owner in Spain.  You will receive electronic and physical copies of this document after your purchase is completed.  
 

IBI 

This is a local tax payable by all property owners in Spain that is similar to Council Tax.  It is usually payable annually and usually payment can only be accepted by the Town Hall during a certain period within the year.  Payment by Direct Debit from a Spanish bank account can usually be arranged.

IVA

This is the Spanish equivalent to VAT.  At present it is charged at 21% upon fees charged for the provision of goods or services.  If you purchase a property off-plan then you will be required to pay IVA upon the purchase.  For more information please read our page on the costs of buying a property in Spain here.
 

NIE

The Número de Identidad de Extranjero or NIE is a Spanish tax number for non-residents of Spain.  You need to have this number in place in order to be involved in any official process in Spain, such as buying a property, buying a car, getting your property connected to utilities and for paying taxes.  

Non-resident’s income tax

This is an annual tax payable by property owners in Spain who are not resident in Spain.  It becomes payable at the end of your first full year as the owner of your property in Spain.  If you rent out your property then you must pay tax upon the income, but even if you do not rent out your property then non-resident's income tax is payable upon your property in Spain. 
 

Nota Simple

This is an extract from the property registry relating to a specific property.  It is similar to an Office Copy as extracted from the Land Registry in England & Wales.  It states the names of the owners, the registered surface area of the property as well as listing any charges secured against the property.  When enquiries are made in respect of a property that you wish to purchase in Spain this is one of the documents that will be considered. 

Notary 

The Notary in Spain is a professional witness to agreements and transactions.  The function of the Notary in the context of a property purchase is to confirm that all of the points of the purchase have been agreed between the buyer and the seller.  The Notary will issue a stamped Escritura shortly after the completion meeting.  

Power of Attorney

This is a document that you sign in which you authorise someone else to carry out tasks on your behalf.  There are many types of power of attorney.  In relation to your purchase of a property in Spain we will ask you to sign a power of attorney in which you authorise us to apply for your NIE, open a bank account and complete the purchase on your behalf.  
 

Spanish Property Registry

Each major town in Spain has a property registry.  The role of the property registry is to maintain the records of ownership of land and buildings.  When you purchase a property this purchase will be registered at the property registry.  This is the final step in the process of buying a property in Spain.
 

Purchase Tax/ ITP/ Transfer Tax 

This is the tax paid by the buyer upon the purchase of a property in Spain.  For more information about purchase tax when buying a property in Spain, please read our page on the costs of buying property in Spain here.

 

Testimonials

E&G Solicitors in Spain are professional, competent and trustworthy - we felt confident that everything would be done correctly and we were kept informed all the way through the process of buying our property in Spain.

Tim and Lorna, Chesterfield