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Every time a property in Spain is sold, a theoretical capital gain could be generated and should be taxed. Since the rate on Capital Gains Tax for Non Residents in Spain is 18%, there must be a system to secure that Non Residents do not leave the country without paying their capital gain tax.

For this purpose, every time that a property is sold in Spain, at completion time at the Notary Public, the purchaser must retain 3% of the price of sale of the property to be paid within the period of 30 days to the Spanish Tax Office (Hacienda Pública).

Is the equivalent of a UK Solicitor who acts on behalf of the purchaser or the vendor in the transfer of a property. An efficient Abogado should make the previous searches on the property to make sure that it is free or charges, unencumbered and with no liens or limitations, and registered in the name of the vendor.

In Spanish also called “impuesto sobre el incremento de patrimonio”. It is generated every time a property is transferred, and works basically the same way it does in other European countries taxing the capital gain generated when selling a property after deducting from the theoretical gain due to the difference of purchase price and sale price, the purchase and sale costs that can be documents through invoices.

On property, the rate of the Capital Gain Tax on Non Spanish Tax Residents on property transactions  is 18%, while for Residents could go down to 15%. Seeking advice from a qualified and experienced Solicitor could be ways of minimize or avoid this tax.

They are the moment and date when ownership of the property passes from the seller to the buyer, usually signing the Title Deed of the property with the Solicitors at the Notary’s Office.

The balance up to the full balance of the price is then paid, normally through banker’s drafts and deducting the 3% retention on the price if the vendor is Non Resident in Spain as well as the repayment value of any mortgages or charges that may affect the property.

Completion date is agreed between the seller’s and buyer’s Solicitors who will try to fit in with the dates suggested by their respective clients. Some times, due to unforeseen circumstances, delays may happen, for example, if the buyer does not receive a search or mortgage offer in time, or the "cash buyer" turns out to have a related sale then the completion date may have to be revised.

Private legal document that shows the agreement between the purchaser and the seller. It sets out the basic circumstances of the transaction such as description of the property sold, price, names of the parties and specification of who pays the costs.

Usually, once the purchaser finds a property that likes and wants to get committed with the purchase, a “good will” or “holding deposit” of 2000 to 4000 sterling is paid to the Estate Agent involved or directly to the vendor while the Solicitor of the purchaser makes the legal searches on the property and seeks the necessary information from the vendor’s Solicitor.

Is just a plain copy of the Title Deed of a property or the Deeds for a mortgage, Power of Attorney or Testament.

Consists on 10% of the purchase price that is paid by the purchaser to the vendor upon exchange of contracts. Generally is 10% of the price, but it might be even less. On exchange of contracts the seller can insist on receiving from the buyer a 10% deposit of the purchase price.

This deposit is non refundable if the vendor fails to complete the transaction for unjustified reason. Sometimes it is agreed between the vendor and the purchaser that if the vendor refuses to complete the sale at the agreed time, once exchanged the contract, an amount equal to double the deposit must be paid to the purchaser as compensation for the refusal of the vendor to complete.

Is the Title Deed of a property. Title Deeds in Spain are drawn up and executed before a Notary Public, since the Escritura Pública is a public document which will be kept in the Notary’s File permanently.

Once an Escritura is signed, the parties get authenticated copies of it to the sent to the various public offices for Tax payments and Registration. Only public deeds may be registered in Spain.

Normally, once signed the Escritura or Title Deed must be sent immediately to the Land Registry for Registration to prevent that unwanted charges or liens against the vendor could affect the new purchaser.

A professional Registration Agent used generally by Banks and Solicitors to register Title Deeds and Mortgage Deeds in the Land Registry. Once the Deeds of a transaction is signed before the Notary Public, they are sent for Tax Payments to the Local Tax Office and Registration at the Land Registry (Registro de la Propiedad).

Banks and many Solicitors normally use a Gestor o Gestoría to have these Tax Payments and Registration proceedings done, since it is of extreme importance to have the taxes paid in due time and the title deeds for the property registered without any legal problems.

Is the local tax payable to the Town Hall every year by each property privately owned, similar to the Council Tax.

It is paid normally once a year, although some Town Hall divided the payment in two. It is always paid on the rateable value of the property and it is normally notified at the property before is due.

Also, generally is set to be paid on direct debit through the bank. In Andalucia it is very relevant for Tax purposes since it contains the rateable value of the property and will help your Solicitor to calculate the minimum Taxable Value of the property for Transfer Tax purposes.

It is the Transfer Tax on the purchase of a second hand property, or a transfer of a property where the vendor is not professional developer.

Stands for Impuesto sobre el Valor Añadido equivalent to the UK VAT Added Value Tax. IVA (VAT) charged by Spanish Solicitors, Estate Agents, Notaries and Land Registrars is currently at 16%.

VAT on newly built property purchases in Spain is normally 7% in most of the Regions. In Andalucía is currently at 7% rate. Developers will charge IVA (VAT) at 7% rate (in most regions of Spain) on the sale of newly built residential property and 16% for commercial property as well as parking spaces transferred independently from houses or apartments.

If a property transfer is charged with IVA (VAT) there is also STAMP DUTY payable to the Regional Tax Office at generally 1% of the purchase price.

Document issued by the Land Registry Office that contains the basic information of a certain property such as name of the owner/s, location, boundaries, surface, built surface, registered mortgages or charges, rights to third persons or any relevant information that has been recorded in the Land Registry books.

Is one of the most essential legal Agents intervening in a property transaction. Under Spanish Law all property transactions must be executed in public document called escritura (TITLE DEEDS for the property) which are only drawn up by the Notary.

The Notary is a Highly Qualified Government Official with is legally authorised to make title deeds of the property and controls that all legal formalities are observed.

Transfers of properties must be completed before the Notary Public, otherwise, the transfer deeds will not be considered public documents valid against any person once registered.

Basically consists on your Tax and Identification number in Spain. Every Foreigner in Spain must have a Number of Identification of Foreigner (N.I.E.) which is assigned once applied for it by the nearest National Police Station.

All tax payments in Spain must be made using a N.I.E number for Non Spanish nationals. Therefore, any non Spanish person wishing to buy a property in Spain must FIRST apply for this number.

The word “patrimonio” is commonly used to express the taxes on non residents owning properties in Spain. Really means Wealth and Income Tax for Non Residents in Spain - (Impuesto sobre la Renta y Patrimonio de no residentes). All Non-resident in Spain owning a property are liable to Spanish Wealth and Income Tax based on the rateable value of the property without any deductions given.

Is a tax payable to the Town Hall every time that at property is sold. If a property is again sold within the first year of being purchased, it does not generate the Plusvalía Tax. It is only generated after the first year of ownership of the property.

It is always based in the rateable value of the property (value of the property to pay rates) and it is proportionally increased to the numbers of years between the previous purchase and the sale. It is rather difficult to work out since it is necessary to know the rateable value of the land on which the property stands, and normally is provided by the Town Hall upon request with sufficient time.

Power of Attorney or General Power of Attorney. It is advisable to be granted only on behalf of a qualified and reliable Solicitor.

Land Registry Office. Usually there is one or several in every mayor town.

All properties are normally registered in the Land Registry Office and any person could access (applying for it in the proper way) the contents of its files to know the basic details of precise property, such as ownership, surface, charges, encumbrances, rights of third parties over the property, boundaries and other circumstances.

Any person that submits the Residents Income Tax Form in Spain because spends more than 183 days in Spain in a calendar year or permanently lives in Spain or if your close family lives permanently in Spain (espouse and children).