Buying Resale Property in Spain: Steps, Taxes and Risks

Transaction stages, property checks, taxes and key risks

Buying resale property in Spain allows purchasers to choose an apartment, house or villa in an established area, assess the actual condition of the property and complete the transaction more quickly than when buying a property under construction.

The age of the building is not necessarily the main risk. The most significant issues are usually connected with the property’s legal status, existing mortgages and debts, unauthorised alterations, technical defects and the conditions of the preliminary purchase agreement.

Before signing an arras agreement and transferring a substantial amount, the buyer should verify the owner, Land Registry information, cadastral records, debts owed to the owners’ association, municipal taxes and whether the actual layout corresponds to the documentation.

What is considered resale property?

Resale property generally means a property that has previously been transferred to an owner and is now being sold by its current owner rather than directly by a developer as a first transfer.

It may include:

an apartment in a residential building;
a detached house or villa;
a townhouse;
an apartment-type property;
a renovated property;
a property occupied by a tenant;
a property owned by an individual or a company.

The main difference from a new-build property lies in the status of the seller and the applicable tax regime. Resale purchases are normally subject to Property Transfer Tax — ITP — rather than VAT.

Advantages of buying resale property

The buyer can inspect the completed property and assess its actual condition, views, noise levels, natural light, building quality and surrounding infrastructure.

Other advantages may include:

the possibility of moving in immediately after completion;
a wider selection in central and established areas;
access to actual information about utility and community costs;
an existing history of the building’s operation and maintenance;
greater room to negotiate the price;
no risk of construction delays;
the possibility of carrying out a full technical inspection.

However, the fact that the property is completed does not eliminate the need for legal and technical due diligence.

Main stages of the purchase

The acquisition of resale property normally involves:

Selecting the property and agreeing on the price.
Obtaining the seller’s documentation.
Conducting legal due diligence.
Carrying out a technical inspection.
Signing a reservation or arras agreement.
Arranging mortgage financing, where required.
Signing the public deed before a notary.
Paying the applicable taxes.
Registering ownership.
Transferring utility contracts.

The precise order may vary depending on the property, the region, the existence of a mortgage and the buyer’s personal circumstances.

Verifying the owner

The first step is to confirm that the seller has the legal right to dispose of the property.

The buyer should verify:

who is registered as the owner;
whether the property belongs to one or several people;
whether the seller acts personally or through a power of attorney;
whether a spouse’s consent is required;
whether a representative has sufficient authority;
whether a company is legally authorised to sell the property.

If several people own the property, all owners or their duly authorised representatives must participate in the transaction.

The Nota Simple

The main document used for the initial review is the Nota Simple issued by the Spanish Land Registry.

It normally contains:

identification of the property;
the registered owner;
the registered area;
mortgages;
seizures;
easements;
restrictions;
third-party rights.

The Nota Simple should be recent. An older document does not guarantee that no new mortgage, seizure or restriction has been registered since its issue.

Mortgages and other encumbrances

An existing mortgage does not necessarily prevent the sale. However, the procedure for repaying and removing it from the Land Registry must be agreed in advance.

The buyer should establish:

the outstanding loan balance;
the lending bank;
whether a bank debt certificate is available;
the amount to be paid directly to the bank on completion;
the procedure for cancelling the mortgage;
the expenses connected with repayment and registration;
whether any other seizures or restrictions exist.

If the property is subject to a seizure or prohibition on disposal, a standard purchase structure may not be safe.

Land Registry and cadastral information

The Land Registry description should be compared with the cadastral information and the actual physical condition of the property.

Particular attention should be paid to:

the property area;
the number and layout of rooms;
terraces;
parking spaces;
storage rooms;
the land plot;
swimming pools;
extensions;
additional buildings.

Differences between usable, built and cadastral areas do not always indicate an infringement, but they should be understood before the purchase.

If the actual condition differs substantially from the documentation, the buyer should determine whether the changes can be legalised and who will bear the related costs.

Unauthorised alterations and extensions

Resale properties often contain alterations completed without the necessary permits.

Examples include:

enclosing a terrace;
combining rooms;
changing the kitchen or bathroom layout;
extending a house;
constructing a swimming pool;
converting a garage;
dividing one property into several units;
changing the authorised use of the property.

The appearance of an alteration in the Cadastre or Land Registry does not always confirm full compliance with planning regulations.

Before purchasing, the buyer should check municipal permits, any open infringement proceedings and whether the property can be used legally in its present condition.

Debts owed to the owners’ association

When buying an apartment, the buyer should request a certificate confirming the seller’s payment status with the comunidad de propietarios.

The buyer should also review:

the amount of regular community fees;
approved special assessments — derramas;
planned repair works;
the condition of the façade, roof and lift;
legal disputes involving the community;
rules governing common areas;
restrictions affecting rentals.

The property may be liable for certain unpaid community fees from the current year and previous periods within the limits established by law.

The buyer should not waive the right to receive the community debt certificate without a specific legal reason.

IBI and municipal charges

The payment status of the municipal property tax — Impuesto sobre Bienes Inmuebles, or IBI — should be checked.

The seller normally provides the latest payment receipt. The agreement should also specify how the tax for the year of completion will be divided between the parties.

The buyer should additionally check:

municipal fees;
waste collection charges;
parking-related municipal costs;
planning charges;
any special local assessments.

The cadastral reference shown on the IBI receipt should correspond to the property being purchased.

Technical inspection of the property

Legal due diligence does not reveal the physical condition of an apartment, house or villa.

A technical inspection is recommended before signing the arras agreement, particularly where the property is old, has recently been renovated or is located in a building with visible defects.

The inspection may cover:

walls and structural elements;
damp and water penetration;
cracks;
the roof and façade;
windows;
electrical installations;
water supply and drainage;
heating and air conditioning;
ventilation;
gas installations;
swimming pool condition;
the quality of renovation works.

In an apartment, the buyer should also establish whether pipes, terraces, risers and other elements are private or common property.

Building inspection

Depending on the age of the building and the applicable regional rules, a periodic technical inspection may be required.

The buyer should verify:

whether the inspection has been completed;
whether serious defects were identified;
whether mandatory repair orders have been issued;
whether works have already been approved;
who will pay the future costs.

A favourable building inspection does not replace an inspection of the individual property, but it helps assess the condition of the common structural elements.

Energy performance certificate

The seller must normally provide a valid energy performance certificate unless the property falls within a legal exemption.

The certificate indicates the property’s energy efficiency but does not guarantee the working condition of the heating, air-conditioning or insulation systems.

A poor energy rating may indicate higher future running costs, particularly in an older building.

Reservation agreement

Once the price has been agreed, the buyer may be asked to sign a reservation document and pay a small amount to remove the property temporarily from the market.

The document should state:

the exact property;
the purchase price;
the reservation amount;
the reservation period;
the refund conditions;
the deadline for signing the arras agreement;
whether the purchase depends on legal due diligence;
whether the purchase depends on mortgage financing.

Money should not be transferred without written refund conditions.

Arras agreement

Once the main documents have been reviewed, the parties normally sign an arras agreement.

It should specify:

the property price;
the amount paid;
the type of arras;
the deadline for signing before a notary;
the payment method;
the condition of the property;
the removal of existing encumbrances;
the furniture included;
the vacation of the property;
the consequences of withdrawal by either party.

Under arras penitenciales, the buyer normally loses the amount paid if withdrawing without a protected contractual reason, while the seller must return twice the amount received.

The agreement should therefore be signed only after the property has been checked or should include conditions allowing the buyer to recover the payment if serious problems are discovered.

Buying with a mortgage

Resale property can be purchased with mortgage financing.

The bank normally reviews:

the buyer’s income;
existing financial obligations;
the source of funds;
the property value;
the legal status of the property;
the bank valuation.

If the buyer depends on financing, the arras agreement should include a specific mortgage clause.

It should establish:

the required loan amount;
the minimum percentage of financing;
the deadline for obtaining the bank’s decision;
the consequences of a low valuation;
the evidence required to confirm refusal;
the procedure for refunding the deposit.

Without such a clause, a mortgage refusal may result in the loss of the amount paid.

Taxes on resale property

A buyer of resale property normally pays Property Transfer Tax — Impuesto sobre Transmisiones Patrimoniales, or ITP.

The applicable rate depends on the autonomous community, the purchase price and any available reductions or exemptions.

The buyer should also budget for:

notary fees;
Land Registry fees;
legal services;
bank valuation;
technical inspection;
powers of attorney;
official translations;
banking charges.

The complete purchase budget should be calculated before signing the arras agreement.

Completion before a notary

After the documentation has been checked and the contractual conditions have been fulfilled, the buyer and seller sign the escritura pública de compraventa before a notary.

Before signing, the following should be confirmed:

the identity and authority of the parties;
the final purchase price;
all previous payments;
the description of the property;
the status of encumbrances;
the community debt certificate;
payment of IBI;
the procedure for handing over the keys;
the existence of any tenants;
the furniture and equipment included.

The notarial deed formally records the transaction and allows the new ownership to be presented for registration.

Payment of the purchase price

The final purchase price may be paid by:

banker’s draft;
bank transfer;
direct payment of part of the price to the seller’s lender;
a combination of payment methods.

Every payment should be properly documented.

If the seller is not tax-resident in Spain, the applicable tax withholding and payment procedure should be checked in advance.

The parties should also determine who pays the expenses connected with cancelling the seller’s mortgage and preparing the seller’s documents.

Registration of ownership

After signing the deed, paying the taxes and presenting the required documents, ownership is registered in the buyer’s name.

Registration protects the buyer against claims by third parties and against later encumbrances affecting the seller.

Once the process is completed, the buyer receives confirmation that the ownership has been entered in the Spanish Land Registry.

Handover of keys and transfer of utilities

The buyer normally receives the keys on completion unless the agreement establishes another date.

The buyer should then:

transfer the electricity contract;
transfer water and gas contracts;
notify the owners’ association;
update the IBI payer information;
arrange property insurance;
record meter readings;
collect remote controls, access cards and keys;
keep all technical documents relating to the property.

It is advisable to record the meter readings and the condition of the property at the time of handover.

Buying a property with a tenant

If the property is rented, the buyer should review:

the duration of the tenancy agreement;
the rent;
the security deposit;
any unpaid amounts;
the tenant’s rights;
whether the property can be vacated;
any pre-emption rights;
the continuation of the tenancy after the sale.

A verbal promise that the tenant will leave is not sufficient.

If the property must be delivered vacant, this condition should be clearly included in both the arras agreement and the public deed.

Main risks of resale property

The most common risks include:

an undisclosed mortgage or seizure;
a seller without sufficient authority;
debts owed to the owners’ association;
substantial approved derramas;
unauthorised alterations;
discrepancies in the recorded area;
technical defects;
an existing tenant;
the absence of a mortgage clause;
an unrealistically short completion period;
payment to an unauthorised person;
verbal promises omitted from the contract.

Legal and technical checks should be completed before a substantial amount is transferred.

Common buyer mistakes

The most frequent mistakes include:

choosing a property based only on appearance;
signing a reservation without refund conditions;
relying on an outdated Nota Simple;
waiving the community debt certificate;
failing to check alterations;
underestimating renovation costs;
relying on a mortgage without a protective clause;
failing to prepare a furniture inventory;
signing the arras agreement before due diligence;
transferring funds to an unauthorised intermediary;
proceeding without independent representation.

The seller’s agent represents the seller’s interests. The buyer should have independent legal advice.

How to buy resale property safely

A safe purchase normally requires the following steps:

Obtain the seller’s documentation.
Request an up-to-date Nota Simple.
Verify the owner and all encumbrances.
Compare the Land Registry, Cadastre and actual property.
Check community and municipal debts.
Review the owners’ association documents.
Carry out a technical inspection.
Verify the legality of alterations.
Assess the available mortgage financing.
Prepare an individual arras agreement.
Verify the recipient’s bank details.
Complete the purchase before a notary.
Pay the taxes and register ownership.

Conclusion

Buying resale property in Spain involves more than selecting a property and negotiating the price. The buyer must verify the owner, encumbrances, debts, physical condition and legality of any alterations.

The main rule for a safe purchase is not to sign an arras agreement or transfer a substantial amount until legal due diligence has been completed or appropriate protective conditions have been included.

Particular attention should be paid to the Nota Simple, mortgages, community debts, municipal records, technical condition and mortgage financing terms.

GG Real Estate Barcelona represents buyers and provides comprehensive support for resale property purchases in Barcelona, Catalonia, the Costa Brava, the Costa Blanca, the Costa del Sol, Madrid, the Balearic Islands and other regions of Spain.

We help select the property, verify the seller and the documentation, arrange a technical review, prepare the arras agreement, coordinate mortgage financing, organise completion before a notary and register ownership.

Frequently asked questions

What tax is paid when buying resale property in Spain?

The buyer normally pays ITP. The rate depends on the autonomous community, the purchase price and any applicable reductions.

What should be checked in the Nota Simple?

The owner, property description, mortgages, seizures, easements, restrictions and other registered rights.

Can a property be purchased if the seller still has a mortgage?

Yes, provided that the procedure for repaying and cancelling the mortgage is agreed in advance.

Is a technical inspection necessary?

It is particularly recommended for older or renovated properties, houses and villas, and where visible defects exist.

What is a derrama?

It is a special contribution approved by the owners’ association for repairs or other common building expenses.

Is the deposit refunded if the bank refuses the mortgage?

Only if the agreement contains a properly drafted financing clause or the parties have agreed on another refund procedure.

Who is responsible for debts owed to the owners’ association?

The seller should confirm the payment status, although the property may remain liable for certain earlier debts within the limits established by law.

Is registration in the Land Registry mandatory?

Registration strongly protects the buyer’s ownership and is highly recommended after completion and payment of taxes.

Buying Resale Property in Spain