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Buying a House in Spain: Mortgage Contingency Clauses and Legal Checks
26.02.2026
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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Real Estate Investment In Spain – Financial and Tax Information
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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This is the fourth article of a series decidated to purchasing real estate property in Spain: previously, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), the financial and tax information as well as practical tips related to the purchase process (here) and how to handle international inheritance tax implications (here).
How to obtain a mortgage loan when Purchasing Property in Spain
When a buyer in Spain wishes to purchase property using a mortgage loan, the financing process typically begins after selecting a specific property and signing a private purchase agreement, which is usually accompanied by a deposit payment. The entire financing process is strictly regulated under Spanish civil and banking law, offering a high degree of legal security, including foreign and non-resident buyers.
Once the private purchase contract is signed, the bank initiates an official property valuation. This is a mandatory step for determining the maximum loan amount, the financing conditions and for loan approval.
Only after the valuation is completed will the bank issue a formal mortgage offer. The entire process, from the initial application to the final offer, can take several weeks, depending on the complexity of the buyer’s financial profile and the documentation required. The final step occurs before a Spanish notary, where two deeds are signed simultaneously:
- The public deed of sale, and
- The mortgage deed.
At this stage, the bank transfers the loan amount directly to the seller, ensuring legal and financial certainty for all parties involved.
While this structure guarantees legal clarity, it also means that mortgage financing is not secured at the time the private agreement is signed. Therefore, it is strongly recommended to include a mortgage contingency clause in the private purchase contract. This clause makes the completion of the sale conditional upon obtaining financing, thereby protecting the buyer’s deposit in the event of a mortgage denial.
Key Differences for Foreign Buyers
Spanish banks do not generally issue binding pre-approvals before a specific property has been chosen. Foreign buyers, particularly non-residents, should also be aware of additional requirements, including:
- Submission of translated or apostilled foreign documents,
- More extensive due diligence and KYC (Know Your Customer) procedures, and
- Generally longer processing times.
These factors may extend the mortgage timeline and should be accounted for in the overall transaction planning.
Differences between buying a second-hand apartment/house and buying a new apartment/house directly from the developer
The main difference is that, in the case of a new home, VAT and AJD (stamp duty) are paid, and in the case of a second-hand home, only ITP (property transfer tax) is paid, as already explained in section III, paragraph 3.
In addition, in the case of new homes, a series of legal guarantees are established—for 1, 3, and 10 years—for possible construction defects that may arise in the home, for which the developer is liable. On the other hand, in the case of second-hand homes, the seller is liable for hidden defects only for a period of 6 months from delivery.
If the property is purchased from a natural person, it will generally be a second-hand home, whereas if it is purchased from a legal entity, it will normally be a new build and will be purchased from a developer.
Therefore, the fundamental differences will be those already mentioned above: different taxation and greater legal guarantees in the case of purchase from legal entities. Additionally, in the case of purchasing the property from a legal entity developer, there are enhanced documentation and reporting obligations, which do not apply in the case of sale by individuals.
Are there debts associated with the property that the buyer will be liable for?
The buyer is liable for any debts owed to the Homeowners’ Association for the three years prior to the purchase and for the outstanding portion of the current year’s dues. The buyer is also vicariously liable for any outstanding property tax (IBI) or other local taxes owed by the previous owner.
To adequately protect their interests, the buyer should, on the one hand, request a certificate of debts from the Homeowners’ Association and, on the other hand, check the status of payments of property tax and other municipal taxes.
What are the specific provions of Spanish Coastal Law (Ley De Costas)?
Properties located near the sea may fall under the Spanish Coastal Law (Ley de Costas), which regulates land use in the public maritime-terrestrial zone and its surrounding protected areas. These coastal strips are public domain, and strict limitations apply to ownership, construction, and renovation.
Even for older, long-standing buildings, it is vital to verify whether the property lies within a protection zone. Depending on the classification of the area, consequences can range from restricted use or denial of renovation permits to expiration of rights of use or, in extreme cases, administrative demolition orders.
Legal due diligence is essential to determine the status of the plot and identify any concessions or time-limited occupancy rights granted by the authorities.
What rules apply to Country Houses (Fincas Rústicas)?
Country houses (fincas rústicas) deserve special attention due to their location in rural and often protected areas, which are subject to strict urban planning and environmental regulations.
Depending on local and regional classifications, the land may be designated exclusively for agriculture, forestry, or conservation, limiting the potential for construction, expansion, or change of use.
Additionally, many rural properties have existing buildings that may never have been fully or properly legalised. As with coastal properties, buyers should review all applicable planning and environmental restrictions carefully before purchasing.
How are squatting cases (Okupas) regulated under Spanish law?
In recent years, Spain has experienced a rise in squatting cases, influenced by housing shortages, unaffordable rents, and high costs in urban or tourist areas. While the issue is complex and socio-politically sensitive, this section focuses on practical implications for property owners.
Importantly, unlawful occupation (okupación) is relatively uncommon in most parts of Spain. The majority of property owners, especially those who secure and monitor their homes properly, are unlikely to be affected.
Effective deterrents include:
- Alarm systems and surveillance cameras,
- Remote monitoring,
- Local property management services (especially for second homes).
Spanish law differentiates between:
- Intrusion into a primary residence (treated as unlawful entry),
- Occupation of vacant or second homes (classified as usurpation, requiring court action).
Recent Legal Reforms – “Anti-Squatting Law” (Ley Orgánica 1/2025): To address lengthy eviction timelines, Spain introduced reforms, which include:
- Within the first 48 hours of occupation:
Police may evict squatters without a court order if no legal proof of residence is presented. Owners must provide immediate proof of ownership. - After 48 hours: Eviction must follow a formal judicial process.
- Fast-track legal procedures: Eviction claims may now be processed in about 15 working days under accelerated procedures—though real-world implementation may vary by jurisdiction.
While these special topics may not apply to every transaction, they highlight the importance of thorough due diligence and professional legal advice when buying property in Spain. Understanding the implications of coastal laws, rural zoning, inheritance regulations, and property security helps international buyers make informed, secure, and future-proof investments.
Relocating to Spain for professional reasons is often an exciting step: a new career opportunity, a different lifestyle, and, in many cases, an improved quality of life. However, in practice, the most complex issues rarely arise from employment itself, but from the legal and tax implications surrounding housing.
Before signing a lease or purchasing a property, it is essential to understand your administrative and tax position in Spain. A proper legal assessment at the outset can prevent costly complications later.
Immigration Status: The Essential Starting Point
Not all foreign nationals are in the same legal position.
Citizens of the European Union may reside and work in Spain, but they must obtain a Foreigner Identification Number (NIE), register with the Central Register of Foreign Nationals, and register their address (empadronamiento) in the municipality where they reside.
Non-EU nationals, on the other hand, must first secure the appropriate visa or residence and work authorization, and subsequently obtain a Foreigner Identity Card (TIE).
This is not a mere administrative formality. Without a regularized status, practical issues may arise, including difficulties opening a bank account, setting up utilities, demonstrating financial solvency to landlords, or formalizing deeds before a notary.
Renting in Spain: What to Review Before Signing
Residential leases in Spain are governed by the Urban Leases Act (Ley de Arrendamientos Urbanos). Although legal residence is not technically required to sign a lease agreement, landlords often ask for additional guarantees if the tenant has recently arrived in the country.
It is important to review carefully:
- The agreed duration of the lease
- Rent update mechanisms
- Security deposit and additional guarantees
- Early termination clauses
Entering into a lease under time pressure, without fully understanding these terms, can result in financial obligations that may not align with the realities of an international relocation.
Purchasing Property: Legal Access and Tax Implications
Foreign nationals may freely acquire real estate in Spain, regardless of residency status. There are no nationality-based restrictions on ownership.
However, property acquisition has significant tax consequences that should be assessed in advance.
For resale properties, the Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) applies, with rates varying depending on the Autonomous Community. For newly built properties, VAT (IVA) and Stamp Duty (Actos Jurídicos Documentados) are payable. Notarial and Land Registry fees must also be considered.
The transaction must be executed through a public deed before a Spanish notary and subsequently registered at the Land Registry to ensure full legal protection against third parties.
Tax Residency: A Determining Factor
One of the most critical issues is whether the relocating professional becomes a tax resident in Spain.
As a general rule, tax residence is acquired by spending more than 183 days in Spain during a calendar year or by having the primary center of economic interests located in Spain. This determination is based on objective criteria and is not dependent solely on municipal registration.
The distinction is substantial:
- Spanish tax residents are taxed on their worldwide income.
- Non-residents are taxed only on income obtained in Spain, under the Non-Resident Income Tax regime.
Even if a property is not rented, owners may be required to declare imputed income if it does not qualify as their primary residence.
Coordination with the Country of Origin
Relocating to Spain does not automatically eliminate tax obligations in the country of origin. Spain has signed numerous double taxation treaties, but their application requires case-by-case analysis.
Inadequate planning may lead to dual taxation, residency conflicts, or subsequent inquiries from tax authorities in either jurisdiction.
Plan Before You Commit
The correct sequence does not begin with signing a lease or reserving a property. It begins with
- clarifying immigration status
- defining tax residence, and
- assessing the legal and financial implications of each decision.
Housing is not merely a real estate matter. It is a legal and economic commitment with medium- and long-term consequences.
When a professional move involves crossing borders, careful planning is not optional. It is a fundamental step in protecting both personal stability and the success of the new professional chapter.
In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider one of the most important concerns when acquiring property abroad: inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.
Applicable Law
The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.
This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.
Inheritance Tax
Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.
Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.
Sales of Inherited Property
In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).
A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.
While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:
- Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
- Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.
Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.
In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:
- Complete the inheritance process first,
- Pay applicable inheritance taxes, and
- Register ownership in the Land Registry before offering the property for sale.
Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.
Documentation and Procedure
To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).
Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.
Typical required documents include:
- International death certificate or national certificate with Hague Apostille;
- European Certificate of Succession or national inheritance certificate with Hague Apostille;
- Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
- Property title and Land Registry data;
- Bank balance certificates (certificado de saldo);
- Last property tax (IBI) or a bank statement confirming the property’s cadastral data.
In a previous article, we outlined how to structure the purchase of a real estate property in Spain and the steps buyers should take to ensure the purchase is efficient and safe. If you missed it, you can find it here.
In this second part, we will cover financial and tax information along with practical tips related to the buying process. You will also learn about the rules that apply to owning and maintaining the property.
Taxation of individuals and legal entities
Both individuals and legal entities must bear the acquisition costs; the main difference in taxation is that legal entities can deduct VAT and other transaction-related expenses, while individuals generally have fewer tax advantages and a more limited deduction capacity. In any case, there is no clearly more advantageous regime for one type of taxpayer or the other, and the most favorable option will depend on the specific circumstances of each case.
Acquisition costs
Buying a home in Spain involves paying various additional costs on top of the purchase price, which vary depending on the autonomous community, the property’s value, and the buyer’s personal circumstances. These costs can amount to between 8% and 14% of the property’s purchase price and are discussed in sections 3 and 4 below.
Property Tax/VAT/ITPJAD
If it is a new home, Value Added Tax (VAT) must be paid, which is generally 10%, and Stamp Duty (AJD- Actos juridicos documentados) which is between 0.50% and 1.5% of the value of the home, depending on the Autonomous Community and the circumstances of the buyer.
If it is a second-hand home, you will have to pay Property Transfer Tax (ITP — Impuesto transmisiones patrimoniales), which will be 5%-10% of the value of the home, depending on the Autonomous Community and the buyer’s circumstances.
As for the IBI, it is mentioned in section IV, as it is not an acquisition cost as such.
Other expenses
Basically, they will be as follows:
- Notary fees for the execution of the public deed of sale, which legally correspond to the seller, although it is not uncommon for them to be transferred to the buyer by agreement. For a property worth €300.000,00, they would typically amount to around €2,000; however, they are negotiable.
- Registration fees for registering the sale in the Property Registry, which are payable by the buyer. For a property worth €300,000, these would amount to around €500.
- Administrative fees, if the services of an agency are hired to process the payment of taxes and the registration of the buyer’s title in the property registry (which is essential).
Property In Progress And Tax Obligations
Once you own the property, you will need to take care of the following expenses and obligations:
- If the property is part of a building or development with common areas, the owner must pay the homeowners’ association fees, which vary depending on the services and size of the association.
- Property tax (IBI — Impuesto sobre Bienes Inmuebles), which is levied on the ownership of real estate and whose amount depends on the cadastral value of the property and the tax rate set by each local council.
- Depending on the municipality, there may be an annual garbage collection fee for urban waste collection.
- Private utilities, such as water, electricity, gas, or internet.
- Where applicable, home insurance (mandatory when taking out a mortgage), private maintenance and repairs, or extraordinary works agreed upon by the homeowners’ association.
Joint Ownership Communities, Maintenance, Technical Building Inspection (Inspección Técnica De Edificios)
Joint Ownership Communities
When purchasing property in Spain, you are not only investing in the private space you occupy, you are often also becoming part of a legally regulated community of owners (comunidad de propietarios), which comes with specific financial, administrative, and legal responsibilities. In Spain, most buildings and many houses within residential developments (urbanizaciones) are subject to a legal structure known as a joint ownership community.
Within this framework, all property owners collectively assume responsibility for the maintenance, conservation, and proper use of common elements. The governance of the community is defined by its statutes and internal rules, which are adopted and amended by the owners’ association through resolutions passed at general meetings of co-owners. These rules establish key obligations, such as:
- Contributions to shared expenses, which are generally allocated based on each unit’s surface ownership share (coeficiente de participación), although the internal regulations may establish a different method (e.g. equal shares)
- Permitted uses of communal areas,
- Maintenance responsibilities,
- Approval of extraordinary levies (derramas).
Prospective buyers should carefully review all community documentation before completing a purchase. These internal rules and decisions may significantly affect the intended use of the property, for example, by restricting short-term rentals, limiting certain renovations, or setting usage rules for terraces or shared facilities. Additionally, documentation may reveal unpaid levies, planned renovations, or other financial obligations that could affect the property’s long-term affordability. To avoid unexpected liabilities, it is essential to request a debt certificate from the community, confirming that the current owner is up to date with all community payments.
Maintenance Responsibilities
All owners are obliged to contribute to the shared maintenance costs of the building or development. These include regular expenses such as:
- Cleaning of common areas,
- Minor repairs,
- Utility bills for communal services.
Larger or unplanned expenses may require extraordinary assessments, which are apportioned among the owners based on their respective share (often called a cuota de participación).
In addition to shared obligations, each owner is responsible for the maintenance of their private property. In the case of detached or semi-detached homes, this responsibility is exclusive. Owners can be held liable for any damage caused to third parties due to poor maintenance or structural issues.
It is therefore strongly recommended to obtain comprehensive home insurance. Not only does it offer financial protection, but it is often a mandatory requirement for obtaining a mortgage from Spanish financial institutions. Policies should ideally include coverage for major risks such as fire, flooding, and structural damage.
Technical Building Inspection (Inspección Técnica de Edificios, ITE)
Spanish regulations require buildings over a certain age — typically 45 years, though this varies by region — to undergo a Technical Building Inspection (Inspección Técnica de Edificios, or ITE).
This inspection must be carried out by an independent qualified technician and assesses the overall condition of the building. It identifies any deficiencies and proposes necessary improvements. If serious issues are found, the community of owners is required to carry out repairs within a designated timeframe.
Conclusion
A full understanding of both collective and individual responsibilities is essential for safeguarding the interests of foreign buyers in the Spanish property market. Awareness of the implications of joint ownership, maintenance costs, and regulatory obligations such as the ITE can help ensure a secure and financially sound investment.
Summary: How can foreigners purchase a real estate property in Spain? In this article, we aim to provide an overview of the key legal and practical aspects foreign clients should consider before investing in the Spanish housing market.
This is the first of a series of three articles: in the second part we present the financial and tax information as well as practical tips related to the purchase process (here) and in the third wwìe deal with international inheritance implications (here).
How does a property purchase in Spain work?
Spain offers a transparent and legally secure process for real estate investment. However, it is not without risks, particularly concerning private purchase contracts, which are not subject to a mandatory format and rely heavily on the contractual freedom of the parties involved.
Although ownership is typically transferred during the notary appointment, prior private purchase contracts, often accompanied by a 10% deposit, are very common in Spain and are fully effective under formal law aspects. In practice, this means that the decision to purchase and the review of all legal aspects and risks must occur before signing the private purchase contract as this document sets out all the binding conditions between the parties. The subsequent notarial deed merely formalizes or executes the terms previously agreed upon. Moreover, it is important to understand that the notary serves solely as a certifying official in Spain. They do not act to protect the buyer or offer legal advice and must remain neutral.
Therefore, engaging qualified legal support is essential to ensure a safe investment and to fully protect your rights. International buyers should be aware that certain procedural steps are highly recommended to ensure full protection of their ownership rights.
Spain has two complementary real estate registration systems which are characterized below.
If you would like to get to know more about how you can find information about real estate and get the certificate from the Land Registry we encourage you to look at another guide prepared by Legalmodo which you can find here.
- The Land Registry (Registro de la Propiedad) is the official legal registry that confirms ownership from a civil law perspective and lists encumbrances (e.g., mortgages). Registration here is highly recommended as it offers protection against third parties acting in good faith.
The Land Registry is a specialised body under the Ministry of Justice. Each Land Registry office is run by a Registrador de la Propiedad- a legally qualified public official.
Legal information about registered property may be obtained by applying for:
- a “nota simple”- an unofficial extract containing basic property data, useful for informational or preliminary purposes or;
- a “Certificacion registral”- an official and legally binding certificate confirming ownership and registered rights.
These documents may be obtained from the relevant Land Registry office or via the electronic portal of the Colegio de Registradores de España.
- The Cadastre (Catastro) is an administrative and fiscal registry that describes the property’s physical characteristics, such as location, surface area, layout, and cadastral value, for taxation and urban planning purposes, but does not certify ownership.
The Cadastre is managed by the General Directorate for the Cadastre (Dirección General del Catastro), which forms part of the Ministry of Finance (Ministerio de Hacienda).
Cadastral data is publicly accessible and may be obtained either online or in person. The main channels are:
- The official Cadastre portal: https://www.sedecatastro.gob.es/
- Local Cadastral Information Points (Puntos de Información Catastral- PICs) and municipal offices
The following official documents are available:
- Certificación catastral: a legally binding certificate that confirms the cadastral details of a property.
- Consulta Descriptiva y Gráfica: a non- certified extract providing a descriptive and graphical overview of the property’s characteristics.
Real Estate Property purchase process
The typical purchase process in Spain provides legal certainty and transparency. The main steps are as follows:
Real Estate Agency contract
The process often starts with the seller signing a contract with a real estate agency, outlining the agent’s services and commission. While not mandatory, a written contract ensures transparency. Although the seller typically pays the commission, the agency may also enter into a separate or additional agreement with the buyer, particularly in transactions involving property search. It is common for agents to have agreements with both the seller and buyer; however, agents primarily represent the seller and must disclose any dual representation to avoid conflicts of interest. Buyers are advised to seek independent legal advice, as agents do not act as legal representatives.
Reservation Agreement
Once a property is identified, the buyer and seller may sign a reservation agreement, usually with a deposit of 1–2% of the purchase price. This agreement temporarily removes the property from the market, allowing time for document review and due diligence.
The reservation deposit is typically paid to the real estate agency. To ensure legal certainty, the reservation agreement should clearly set out the conditions under which the deposit is refundable. If the transaction is not finalised and the seller or the agency refuses to return the deposit, the buyer may seek legal enforcement through civil proceedings.
Private Purchase Agreement
As indicated below, this stage of the purchasing process is very important. This contract will usually have a decisive impact on the final transaction. Therefore it should be drafted with utmost care and with the assistance of an experienced real estate lawyer.
This contract defines and confirms all agreed terms. It usually involves a 10% deposit. A thorough due diligence is essential at this stage, as the buyer assumes full responsibility for the property. It is often agreed that the deposit is forfeited if the buyer withdraws from the contract and, if the seller withdraws from the contract, they must repay double the deposit.
As with the reservation agreement, the second deposit is generally paid either directly to the seller or to the real estate agency, depending on the arrangement. In Spain, there is no public escrow system or neutral body responsible for managing such funds. Accordingly, if the transaction does not proceed and the seller or the agency refuses to return the deposit, the buyer may pursue legal remedies through civil proceedings.
While it is not standard practice, sometimes it is possible to arrange for the deposit to be transferred to a notary or lawyer who may act as an escrow agent under a private agreement between the parties. As it is not common it may be difficult to arrange in practice.
Public Deed Before a Spanish Notary
As explained before, together the Título and Modo ensure that ownership is validly and securely transferred. In practice, this usually takes place with the signing of the notarial public deed before the Spanish notary, which formally represents the transfer of possession (Modo). In most cases, the remaining purchase price is also paid at the same time because the seller transfers the ownership upon signing the public deed.
Land Registry and Cadastre Updates
After notarisation, the buyer must register the property in the Land Registry to secure legal title against third parties. While this step is not constitutive of ownership, it offers critical protection and is standard practice. Simultaneously, the Cadastral Office updates the property’s ownership details for tax and administrative purposes.
Conclusion
Spain offers a transparent and legally secure process for real estate investment. However, the process is not without risks, particularly regarding private purchase agreements, which are not governed by a mandatory format and rely heavily on the parties’ contractual freedom. Therefore, engaging qualified legal support is essential for a safe investment and to ensure full protection of your rights.
Verification Of Legal Status
The buyer of a property must have access to the following documentation in order to be fully confident about the sale:
- Property deed. This document must be provided by the seller, who must present the original at the notary’s office on the day the deed is signed.
- Updated simple note issued by the Land Registry. This document summarizes the legal status of the property, indicating its ownership, description, and any encumbrances or liens that may exist on it. The law firm advising the buyer can easily obtain this online. It is an essential document for understanding the legal status of the property.
- Updated cadastral certificate, which describes the physical characteristics of the property, including its size, built-up areas, and indicating measurements and boundaries. It can be consulted via the following link: https://www.sedecatastro.gob.es/ or requested through the law firm; it is very necessary if you are buying land on which to build a house, but not essential if you are buying an existing property.
- Energy efficiency certificate, which provides information on the property’s energy consumption and CO2 emissions. To obtain it, you must hire an authorized technician, who will inspect the home and issue the certificate.
- Certificate of occupancy or first occupancy license. This is only necessary in certain cases, including when the property is newly built.
- If applicable, certificate of debts with the Homeowners’ Association. This must be requested from the president or administrator of the Association and certifies whether or not the seller has any outstanding debts with the Association.
- Latest property tax (IBI) receipt certifying payment of this tax.
- Technical Building Inspection Certificate (ITE), certifying compliance with the minimum structural requirements of the property (structure, installations, etc.). This is issued by an approved technician and is only necessary in the case of old buildings, those over 50 years old.
- If the property is mortgaged, you will need to request the corresponding certificate from the bank certifying full payment or, failing that, the outstanding debt.
How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?
Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.
What is real estate tokenisation and how does it work?
In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.
The role of smart contracts
Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.
The legal reality: what is actually tokenised in Spain
It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.
What rights does a real estate token investor actually acquire?
An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.
Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.
Regulatory framework for real estate tokenisation in Spain
CNMV authorisation and the 2023 Securities Market Law
The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.
The role of the Land Registry in the blockchain era
In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.
European regulation: ECSPR, MiCA and the DLT Pilot Regime
Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called «European passport». The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.
The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.
Legal challenges and risks of real estate tokenisation
The risks of the SPV structure
The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.
The disconnect between the on-chain and off-chain worlds
It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.
Practical implications for investors and legal practitioners
For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.
The future of real estate tokenisation in Spain
This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.
Third country citizens seeking to buy real estate in Greece or holding all shares of a Greek legal entity, may apply for a residence permit in Greece under the conditions described below.
If the property is situated in the Municipalities of Attica, in Vari — Voula — Vouliagmeni, in Thessaloniki, in Mykonos or in Santorini, the value of the purchase contract shall amount minimum to five hundred thousand euros (€ 500.000). If the property is situated in different — from the abovementioned — areas of Greece, the minimum value of the purchase contract amounts to two hundred fifty thousand euros (€ 250.000).
Third country citizens seeking to build on a plot, may also apply for a residence permit, if the combined value of the construction contract and that of the purchase contract, amounts to minimum € 500.000 or € 250.000.
Co-owners of a purchased property may apply for a residence permit if they are spouses. If not, permit can be granted to a co-owner, only if the amount invested by her, amounts at least to € 500.000 or € 250.000.
All abovementioned thresholds can be met via the purchase of more than one property.
Residence permits may be also granted to family members of the investor (spouse, children, parents).
In some areas of Greece, the Greek State has imposed restrictions on purchase contracts. In these areas, restrictions may be lifted only by a decision of the Greek Ministry of Defense.
As per the administrative process, each applicant shall lawfully entry Greece at least twice. Applicants shall collect and submit, usually with the help of a lawyer holding a PoA, all necessary documentation at the Immigration Department of the competent Decentralized Greek Authority. Applicants are subject to an administrative fee of two thousand euros (€2.000).
Shortly after filing documents and giving biometric data, applicants receive a temporary residence permit for a year. The duration of a residence permit, if issued, is five (5) years. It may be renewed for another five (5) years if its holder remains owner of the purchased property. The residence permit is revoked if its holder sells her property in Greece.
After seven (7) years since the issuance of a residence permit, its holder can apply for the Greek citizenship if she meets all other criteria for the Greek citizenship (e.g. sufficient knowledge of the Greek language, history, culture and political system, clear criminal record, economic activity in Greece).
This is a summary of the approved measures, which unfortunately for both tenants and landlords do not include any public aid or tax relief and just refer to a postponement in the payment of the rent.
Premises to which they are applied
Leased premises dedicated to activities different than residential: commercial, professional, industrial, cultural, teaching, amusement, healthcare, etc. They also apply to the lease of a whole industry (i.e. hotels, restaurants, bars, etc., which are the most usual type of businesses object of this deal).
Types of tenants
- Individual entrepreneurs or self-employed persons who were registered before Social Security before the declaration of the state of alarm on March 14th, 2020
- Small and medium companies, as defined by article 257.1 of the Capital Companies Act: those who fulfil during two consecutive fiscal years these figures: assets under € 4 million, turnover under € 8 million and average staff under 50 people
Types of landlords
In order to benefit from these measures, the landlord should be a housing public entity or company or a big owner, considering as such the individuals or companies who own more than 10 urban properties (excluding parking places and storage rooms) or a built surface over 1.500 sqm.
Measures approved
The payment of the rent is postponed without interest meanwhile the state of alarm is in force, but in any case, for a maximum period of four months. Once the state of alarm is overcome, and in any case in a maximum term of four months, the postponed rents should be paid along a maximum period of two years, or the duration of the lease agreement, should it be less than two years.
For landlords different to those mentioned above
The tenant could apply before the landlord for the postponement in the payment of the rent (but the landlord is not obliged to accept it), and the parties can use the guarantee that the tenant should mandatorily have provided at the beginning of any lease agreement (usually equal to two month’s rent, but could be more if agreed by the parties), in full or in part, in order to use it to pay the rent. The tenant will have to provide again the guarantee within one year’s term, or less should the lease agreement have a shorter duration.
Activities to which it is applied
Activities which have been suspended according to the Royal Decree that declared the state of alarm, dated march, 14ht, 2020, or according to the orders issued by the authorities delegated by such Royal Decree. This should be proved through a certificated issued by the tax authorities.
If the activity has not been directly suspended by the Royal Decree, the turnover during the month prior to the postponement should be less than 75% of the average monthly turnover during the same quarter last year. This should be proved through a responsible declaration by the tenant, and the landlord is authorised check the bookkeeping records.
Term to apply and procedure
The tenant should apply for these measures before the landlord within one month’s term from the publication of the Royal Decree-law, that is, from April 22nd, 2020, and the landlord (in case belongs to the groups mentioned in point c) is obliged to accept the tenant’s request, except if both parties have already agreed something different. The postponement would be applied to the following month.
As the state of alarm was declared more than one month ago (March 14th), landlords and tenants have already been reaching some agreements, for example 50% rent reduction during the state of alarm, and 50% rent postponement during the following 6 months. Tenants who do not reach an agreement with the landlord could face an eviction procedure, however court procedures are suspended during the state of alarm. We have also seen some abusive non-payment of rent by tenants.
When is becomes impossible to reach an agreement with the landlord, tenants have the legal remedy of claiming in Court for the application of the “rebus sic stantibus” principle, which was highly demanded during the 2008 financial crisis but very seldom applied by the Courts. This principle is aimed to re-balance the parties’ obligations when their situation had deeply changed because of unforeseen circumstances beyond their control. This principle is not included in the Spanish Civil Code, but the Supreme Court has accepted its application, in a very restricted way, in some occasions.
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