The following property rights are recognized under Spanish law:
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No.
The General Office for Trade and Investments (Dirección General de Comercio e Inversiones) must be notified of foreign investments in real estate if they are valued at more than €3,005,060.52 or originate from a tax haven.
Official forms DP2, D2A or D2B must be completed by the foreign investor where investing in real estate assets, further to legal resolution issued by the Dirección General de Comercio Internacional e Inversiones on 27 July 2016.
Military authorization will be required, by virtue of the Decree 689/1978 of 10 February, for foreign investment by directly purchasing a commercial real estate asset in the following territories:
For these territories, certain quotas for total foreign investment have been established.
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Public authorities have a right of pre-emption in relation to properties of historical, architectural or environmental significance.
Pre-emption rights are regulated by the Spanish Civil Code. Neighbouring landowners have a pre-emption right over rural land of less than one hectare and the co-owners of jointly owned land have a pre-emption right over the other owners' shares. Under the Urban Leases Act, tenants have a mandatory first refusal and pre-emption rights in respect of the property they lease; however, these rights can be waived contractually.
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The main legislation for the transfer of real estate comprises:
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No. In accordance with article 1255 of the Spanish Civil Code, the parties are free to agree the conditions of sale as long as they do not contravene any law or moral code, or pose a threat to public order.
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The transfer of the title of ownership to property usually takes place once the relevant public deed of sale and purchase has been entered into by the parties. According to Spanish Law for acquiring a title of ownership to a property, it is necessary not only that the parties sign a sale and purchase agreement but also that the property is delivered to the purchaser, which usually occurs by granting the corresponding sale and purchase public deed. The execution of the sale and purchase public deed represents the delivery of the property to the buyer.
In contrast to other EU countries, registration of the transfer of the title to real estate at the Land Registry in Spain has only a declarative character. Registration takes around three weeks.
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Yes, in Spain there is a land registry and a cadastral registry. The information recorded in both of these is accessible to the public, except for certain personal information recorded at the cadastral registry.
The land registry provides a high level of legal security in relation to property rights and real estate transactions. It records transactions and contracts relating to property, as well as rights 'in rem'. Registration at the land registry is voluntary.
The cadastral registry is an administrative registry where rural and urban property is recorded. This holds information on the physical, legal and economic characteristics of the property, including:
It also contains a plan of the property. The value assigned to the real estate at the cadastral registry serves as a basis for determining the level of property tax (impuesto de bienes inmuebles).
The registries are independent of each other, although both use the cadastral reference as a form of identification for properties.
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Deals are structured either as a direct acquisition of the real estate (asset deal) or an acquisition of the company holding title to the property (share deal). The choice between these is mostly tax-driven. The parties normally agree to enter into a preliminary sale and purchase agreement specifying certain conditions which must be fulfilled prior to completion.
The buyer also usually pays a deposit of between 5 percent and 20 percent of the purchase price.
Once the conditions specified in the sale agreement are met, the parties execute the notarial deed and the buyer pays the remaining part of the purchase price.
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Investors normally carry out technical and legal due diligence on title, building permits and the leases and contracts relating to the property. Due diligence is carried out before purchase, typically after the signing of an agreement (letter of intent or heads of terms) providing the potential buyer with an exclusivity period.
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Under Spanish law, a contract is not valid unless all parties have consented. In some cases special consents are needed, for example, when one party is a minor or does not have legal capacity the consent of the parent or guardian is required.
In the case of a married couple, even if the property is the family home and belongs to one spouse privately, the consent of both is required.
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In Spain there is a principle of freedom of agreement between parties, providing they do not contravene any law or moral code, or pose a threat to public order. It is not mandatory for a real estate purchase and sale agreement to be made in writing, although a written contract is highly recommended and should be signed in front of a public notary and registered with the property registry. A preliminary sale agreement (contrato privado) should include the main clauses, even if not the full content, of the final deed.
The content of the contract is negotiable. However, essential elements include:
Certain formal requirements must be met when the contract is signed in front of a notary.
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The seller is liable, for up to six months following the handover of the property, for ensuring that the buyer receives legal and peaceful possession of the property and that there are no hidden defects. The parties can exclude these obligations by mutual agreement, unless the seller is acting in a dishonest manner.
Since May 2000, buyers of newly built property have benefited from a 10-year warranty provided by statute, under which developers are liable in the case of collapse or serious structural defects. The statute of limitation runs from the date the building is completed.
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If warranties are breached, buyers are entitled to request the cancellation of the sale and purchase agreement (following a refund of the purchase price and the payment of damages), or for a reduction in the purchase price.
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Buyers should check the following:
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Yes. The buyer should identify any potential or actual contamination of the soil resulting from the previous use of the land. The law requires that remedial action is taken in the case of soil pollution. The party responsible for the contamination is normally responsible for carrying this out but the owner or occupier of the property is also liable unless they can prove that the contamination was caused before their acquisition of the property and can ensure that the person responsible carries out the clean-up operation.
Additionally, following the recent entry into force of Law 7/2022 on waste and contaminated land for a circular economy, natural or legal persons owning property are obliged, on the occasion of the transfer of any real right over the same, to declare in the title deed formalising the transfer whether or not any potentially soil-polluting activity has been carried out on the transferred property. Said declaration shall be the subject of a marginal note (nota marginal) in the property registry.
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The uses allowed in different areas of a city are set out in a municipal zoning ordinance (plan general de ordenación urbana) and/or in a specific area zoning ordinance (plan parcial de ordenación).
The town hall of the municipality where the property is located can supply a 'use designation certificate' (cédula urbanística) showing the permitted uses of a property. These can be changed by revisions to planning policy.
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Yes. Under a development agreement, developers will normally undertake certain public works such as providing roads, public parking spaces, green areas, etc. Public authorities normally negotiate associated charges with the developer.
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Compulsory purchase is possible in Spain and it is regulated by the Spanish Civil Code, the Compulsory Purchase Law (Ley de Expropiación Forzosa) and the Land Act (Ley del Suelo). Property can only be subject to expropriation if justified grounds of public interest apply and owners affected by the compulsory purchase receive compensation.
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The relevant taxes are:
The transfer of land, both land for development and developed land, is subject to VAT at a rate of 21%.
A transfer of rural land or land which cannot be used for development is exempt from VAT but is subject to transfer tax at a rate between 6% and 11% (depending on the location of the property), unless the seller is VAT registered and the buyer is a VAT taxpayer entitled to deduct input VAT in full, in which case the option to make the transaction subject to VAT is available.
The first transfer of a new building, and the second and subsequent transfers of buildings which have been or are transferred with a view to them being substantially refurbished, as well as transfers resulting from the exercise of a call option by a lessee in a financial lease contract, are all subject to VAT.
The second and any subsequent transfer of a building, and the first transfer of a building that has been in continuous use for a period of over two years (under a lease agreement), are VAT exempt but are subject to transfer tax of between 6% and 11%, unless the seller is VAT registered and the buyer is a VAT taxpayer fully or partially entitled to deduct input VAT in full, in which case the option to make the transaction subject to VAT is available. Land and building transactions which are VAT exempt are subject to transfer tax at a standard rate ranging between 6% and 11%. The taxable base is the reference value (valor de referencia) of the real estate property established by the General Directorate of Cadastre (Dirección General del Catastro). However, if the value declared by the parties, the price agreed or both are higher than the reference value, Transfer Tax will be calculated on the higher of these values. If there is no reference value or the reference value cannot be certified by the General Directorate of Cadastre, the taxable base, shall be the highest of: (i) the value declared by the parties, (ii) the price agreed or (iii) the market value.
A transfer of property, other than rural land, is subject to a tax on the increase in the value of urban land as calculated by the town council at the time of sale.
Where the transfer is subject to VAT, the notarial deed is also subject to stamp duty (actos jurídicos documentados) at a rate ranging between 0.5% and 3% depending on the location of the property and the type of transaction.
Under the Spanish Civil Code, the seller pays the notarial fees relating to the transfer deed and the buyer is responsible for those relating to subsequent copies (this means that, in practice, the seller pays around 90% of the notarial fee and the buyer pays the remaining 10%). However, despite this, it is common instead for the buyer to pay all notarial fees.
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The transfer of shares is exempt from VAT and transfer tax. Nevertheless, transfer tax/VAT can be incurred on the transfer of shares in companies, when the transfer of the shares is made with the purpose of avoiding the payment of the tax that would have been paid in case of transfer of the real estate. The law considers there are tax avoidance reasons where 50% or more of the assets consist, directly or indirectly, of real estate located in Spain and are not used for business activities, and, as a result of the transfer, the buyer acquires control over the company (ie more than a 50% stake in its share capital) or increases its stake once it has obtained control.
Transfer tax is payable at a rate ranging between 6% and 11% of the value of the underlying real estate assets at the time of the transfer.
Transaction costs include notarial fees, requisition fees, legal and other fees relating to due diligence, and agency fees.
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What are the categories of property right that can be acquired? Are there any interests in real estate other than exclusive ownership?
The following property rights are recognized under Spanish law:
Last modified 13 Mar 2025