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Last Updated on 17/07/2023 by STEPHANE
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Spanish real estate terms explained in plain English
Buying a property in Spain is easy. But remember, your first step will be to find a reliable independent lawyer who is specialized in Spanish land and property law. Unless you speak fluent Spanish, you should find a lawyer speaking your mother tongue in Spain.
More on that here: What is the legal due diligence for your Spanish property?
Cedula de Habitabilidad
The Cedula de Habitabilidad or Licencia de ocupación is an administrative document that certifies that a dwelling complies with the minimum conditions of habitability provided for in current regulations and is suitable for use as a residence for people.
Contrato de Arras
As soon as the necessary legal checks have taken place, you will be required to sign the private purchase contract which will state the full price of the property.
Why is it important? Once you signed it, you are committed to purchasing the property or lose the full 10% if you change your mind.
Contrato Privado de Compraventa
Contrato de Reserva
The Contrato de Reserva expresses your intent to purchase a property. It removes the property from the market, it is the reservation contract.
In general, you will need to pay a holding fee of €3000 to 6000. Funds are held in escrow for 14 to 21 days and you have the time to do checks on the property during that period. At the same time, a purchase contract will be drawn up and legal checks carried out.
Why is it important? This contract is very important, don’t sign without including provisions so you can exit the contract and get your funds back
The cash ideally held by a reliable third party
Impuesto sobre Bienes Inmuebles
Who has to pay for it? Any owner of a Spanish property, local or foreigner.
How do you know? You’ll get a letter after June of any year but some local authorities don’t send it. You owe this tax
Who is the beneficiary? The tax is payable to your local Town Hall. Those are for infrastructure, waste collection,…
Where can I pay for it? Your local Town Hall, a few of them are available online.
Our tip: by working with a Spanish real estate lawyer, he will make sure that the previous owner paid for it, if it is not the case, you’ll have to pay for him!
What if your property is empty? You owe the tax!
Read more and find all our tips on Impuesto sobre Bienes Inmuebles: The cost of owning your Spanish property, What taxes do you have to pay on your Spanish property?
Licencia de obra menor
The licencia de obra menor is a license that you need from the local authorities if you are doing some small renovation works. So, you will never modify the structure of the property with your reforms.
When do you need a licencia de obra menor? Here are a few examples: changing tiles, renovating the plumbing and electrical installation or changing doors or windows are a few examples.
The licencia de obra menor could be required by the local Spanish administration or “ayuntamiento” to undertake these and other projects. Depending on the size of the intervention, we can distinguish between a minor building permit and a major building permit. It is always better to check with your entrepreneur so you won’t have any issues with our neighbours.
How much does a minor building permit cost? Each local authority will decide the value of the building permits. It may be free as some administrations have abolished it.
If you are looking for a renovation team anywhere in Spain, first, check our network of local renovation experts anywhere in Spain.
Licencia de ocupación
The Licencia de ocupación or the Cedula de Habitabilidad is an administrative document that certifies that a dwelling complies with the minimum conditions of habitability provided for in current regulations and is suitable for use as a residence for people.
The Modelo 210 is the form that you will have to fill to pay your national tax that you owe to the Spanish state as an owner of Spanish property as a non resident. In short, it is the Non-Resident Income Tax without permanent establishment or Form 210.
You are renting out your apartment => Quarterly filling, before the 20th of the month following the end of the quarter.
Our Tip: you have items that could reduce this amount, check with your Spanish real estate advisor.
Your apartment is not rented => Yearly filling, before the end of the following year.
Read more and find all our tips on modelo 210: The cost of owning your Spanish property, What taxes do you have to pay on your Spanish property?
Número de Identificación de Extranjeros
The Número de Identificación de Extranjeros or in short NIE is a unique tax identification number in Spain for anyone who isn’t a Spanish citizen. You will need your own NIE number to purchase property and pay necessary taxes! So it’s wise to apply for this as soon as you start looking for properties. You can get it in person in Spain or via a Spanish Consulate if you don’t have time to apply when you are over there. For your spouse as well if you buy together.
Registro de la Propriedad
It is the official land registry of Spain.
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Your first step will be to find a reliable independent lawyer who is specialized in Spanish land and property law. Unless you speak fluent Spanish, you should find a lawyer speaking your mother tongue in Spain. Check on HowtobuyinSpain.com. More on that here: What is the legal due diligence for your Spanish property?