Below is an outline of what you might expect in terms of arrangements and costs – note that this is only an example and that the costs may vary as well as the required deposit, (although this is usually 10%). Also, make sure you have your passport(s) with you at all times since this is required for almost everything!
Appoint a lawyer (abogado) – this is recommended but not obligatory. Check their fees in advance which should be approximately 1,000 Euros.
A Power of Attorney is drawn up by the solicitor and made official at the Notary’s office. Make sure that the Notary speaks English or that you have someone present who can officially translate the document for you in the presence of the Notary (this could be your estate agent who would be required to bring their ID with them). The Power of Attorney is so that your lawyer can continue with the property purchase in your absence.
Go (accompanied by your lawyer or estate agent) to the Policia Nacional (National Police) to obtain your Fiscal Number (NIE) which is required to buy the property. This requirement is currently under review.
Set-up a Spanish bank account with a local bank into which you will transfer funds. Check what they charge in commission to receive monies from overseas (this is unavoidable but make sure that it’s not extortionate!). Your estate agent or lawyer should be able to recommend a bank, and will accompany you should they not speak English there. You should also arrange to obtain 1% of the purchase price in cash – this can be done using a credit card, but you will probably need to call your card-issuer to get authorisation. Any mortgage (hipoteca) required should also be discussed and the amount of financing agreed in principle.
A Private (Purchase) Contract in both English and Spanish, which states the time frame of the purchase, as drawn up by your lawyer, is reviewed and then signed by both you (the Purchaser) and the Seller(s) at a meeting where all parties are present including the estate agent. The 1% of the property value in cash is then given to the Seller.
With the above completed, you return to the UK to complete the following whilst your lawyer finalises the purchase.
You arrange for the remainder of the deposit (9%) to be transferred to your Spanish bank account. It is recommended that the transfer be in Sterling as this usually obtains a better exchange rate. Once the lawyer is satisfied that all the paperwork and debts on the property are in order (see The Legal Process), they will withdraw the money and give it to the Seller. The relevant section of the contract will then be signed on your behalf by your lawyer, and by the Seller. At this point, should you pull out of the purchase, your deposit in full (i.e. the 10%) will be forfeited. Should the Seller pull out, they will have to pay you double the deposit.
The remaining monies will then need to be transferred to your Spanish bank account in time for completion. If a mortgage is also being arranged, then this needs to have been approved and ready in time. Don’t overrun as this could mean forfeiting your deposit!
On the completion date, your lawyer, the Seller, the estate agent, and a bank representative if a mortgage? is involved, will meet in the presence of the Notary and the final documents signed, and the monies and keys exchanged. You will then be the proud owner of your Spanish property!

Summary of the costs involved in the purchase of a 150,000 Euros property

In this example, the ‘declared’ Escritura value of the property is 100,000 Euros – note that it is standard practice for the ‘declared’ value to be less than the actual value. Do not be concerned about this as it can only affect your Capital Gains Tax when you come to sell the property, but that this will most-likely also be ‘declared’ at below actual value. Your lawyer should have agreed this with you, the Seller, and the Hacienda, at the outset.

See Also

Taxes for the Buyer and Seller
Buying a New Property
An Example Purchase
General Advice
News/Features: Property/House & Garden
Property