Real Estate Law
OUR SERVICES
SELLING A PROPERTY IN SPAIN
When selling a property in Spain, the seller or owner should keep in mind that:
- A real estate purchase contract can be made verbally, privately, or in writing. Spontaneous “promises” can therefore be legally binding and enforceable.
- The private (not notarized) purchase contract (contrato de arras) is common. It usually requires a down payment of 10% of the purchase price. If the buyer withdraws, he usually loses the down payment made (forfeiture agreement). If the seller withdraws, it may be obliged to pay the down payment to the buyer in double the amount.
- Registration in the Land Registry is not necessary for acquiring the property. The transfer of ownership already takes place with the notarial certification of the purchase contract. The buyer should pay the price during the notarial certification, and the seller loses ownership through that certification.
- The sale of a property usually involves a tax liability in Spain. The profit from the sale of inherited properties is also taxable. In addition, the municipalities also tax the increase in the value of the land (plusvalía).
If you want to sell a property in Costa Brava, we will support you to make the process run smoothly and stay legally compliant.
If you need advice on inheritance law and tax liability, we are also your reliable contact in inheritance and tax law.
In real estate law, we can help you:
- Verify the brokerage contract
- Review the status of the property under Spanish inheritance law
- Advice on all tax matters (e.g.,the tax liability on sales)
- Prepare, review, negotiate, and process property purchase and sale contracts, arras contracts (earnest money agreements), option contracts, and notarial certification of the purchase contract
- Supervise real estate sales (accompaniment to the notary appointment)
- Registration of purchase contract and change of ownership in the Land Registry
- Execution of purchase price claims, reversal of the purchase contract, and compensation claims
REAL ESTATE IN SPAIN
During the buying and selling process, our real estate lawyers in Costa Brava take care of the following:
- Declaration of new construction
- Land registry and cadastre entries
- Correction of the land area in the cadastre
- Disputes with neighbors (e.g., about property boundaries)
- Prepare, draft, and review contracts with architects or construction companies
- Disputes with architects or construction companies in case of construction defects
Real estate owners in Spain
Owners of real estate in Spain inevitably have tax obligations in Spain. Property transfer tax, sales tax, or stamp duty are the most common when acquiring a property in Spain.
Foreign owners with limited tax liability also have tax obligations, for example, owners who stay in Spain less than 183 days per calendar year.
Property tax (Impuesto de Bienes Inmuebles, ‘IBI’) is always payable in Spain and is calculated based on the cadastral value of the property. If the owner rents the property, the rental income is subject to Spanish income tax. If a holiday property is only used by the owner, the so-called non-resident income tax (Impuesto sobre la Renta de no Residentes) is due.
Non-resident property owners in Spain are required to prepare an income tax return and pay the corresponding balance to the local tax authorities.
The rental of real estate in Spain may also be subject to sales tax if commercial premises are involved or services similar to those of a hotel are provided in the case of private tourist rental of real estate (e.g., bed & breakfast).
Selling a property in Spain is also subject to tax for the seller. The sales profit (capital gain) is subject to income tax.
Whether you want to buy, rent or sell a property in Spain, we support you as a real estate owner in all tax matters. At Dr. Hohne, we make it easy for you to comply with your tax obligations in Spain.
Our real estate lawyers can also help you with a real estate purchase or rental, obtaining official permits for the property rental, or applying for a foreigner identification number (NIE).
RENTAL IN SPAIN
In determining the applicable rules to rental agreements, the duration of a rental agreement, or the taxation of rental income, the decisive factors are:
- whether it’s about renting residential or business premises
- what is the property rented for
- whether the owner is a natural or legal person
If a tenant rents a property and uses it as his main residence in Spain, he is entitled to extend the term of the rental contract for up to five years (seven years if the property is owned by a legal entity).
From a tax point of view, such tenancies in Spain are attractive for the landlord, as only 60% of the rental income minus business expenses is subject to income tax.
Rental contracts may be short term if the property is not used as a primary residence. For example, during a temporary stay in a city (freelance), a semester abroad, or for the duration of a fixed-term employment relationship. This would be a seasonal rental contract (arrendamiento de temporada).
Holiday property owners often rent out their properties in Spain to tourists. In many regions and cities of Spain, an official permit is now required, which is difficult or impossible to obtain, especially in larger cities such as Barcelona. In addition, in many regions (e.g., Catalonia), there is a risk of severe fines if renting to holiday guests without authorization.
For the taxation of rental income, it’s relevant whether the owner is subject to unlimited or limited tax liability in Spain. If the owner is a resident abroad, the rental income often has to be considered for tax purposes, both in Spain and in the country of residence, depending on the double taxation agreement.
As your real estate lawyers in Costa Brava, we’ll be happy to answer your questions about renting properties in Barcelona and in Costa Brava and support you with the necessary tax declarations.
Our professional services include:
- Application for short-term rental permits to tourists.
- Drafting and revision of rental contracts (short-term rental, long-term rental).
- Disputes in case of damage to the property and return of the deposit
- Tax regulation of rental income
- Tax returns to be filed
REAL ESTATE LAW IN SPAIN FOR COMPANIES
In addition to private individuals, we are also the point of contact for investors and companies in Spanish and Catalan real estate law matters.
We support companies that want to acquire property in Spain and rent office space, production facilities, or storage areas.