What do the main Spanish property terms mean?
Arras is the binding 10% deposit contract, escritura pública is the notarised title deed signed at the notary, tasación is the regulated mortgage valuation, FEIN is the binding mortgage offer, and ITP is the transfer tax paid on resale property.
- NIE is the tax identity number every foreign buyer needs before completing.
- Nota simple is the Land Registry extract showing owner, debts and charges.
- Euríbor plus a diferencial sets the rate on a Spanish variable mortgage.
- Plusvalía municipal is the seller's land value tax on a sale.
Key takeaways
- Arras is the binding stage: withdraw after signing and you forfeit the 10% deposit; the seller who withdraws repays double.
- The escritura pública is the notarised deed of sale — ownership transfers on signature, and the Land Registry entry follows within weeks.
- Tasación is the regulated mortgage valuation; lenders lend against the lower of tasación value and price.
- The FEIN is the binding mortgage offer and starts a statutory ten-day reflection period before you can sign.
- Resale purchases pay ITP transfer tax; new builds pay 10% IVA plus AJD stamp duty instead.
How to use this glossary
Terms are grouped by where they appear: the buying process, mortgage and lending vocabulary, bridging and development finance, tax and cost items, and the people and paperwork around a transaction. Each entry gives the Spanish term as it appears in contracts, the plain-English equivalent, and a definition written to stand alone.
Every definition has its own anchor link, so you can send a colleague, lawyer or lender straight to a single term rather than the whole page.
A–Z of Spanish property and mortgage terms
Buying process
- Contrato de reservaReservation contract
- The first written agreement in a Spanish purchase. The buyer pays a reservation fee of roughly €3,000–€10,000 to take the property off the market for a fixed period, usually 14–30 days, while lawyers run due diligence. Buying process step by step.
- Contrato de arrasDeposit contract
- The private purchase contract, normally signed with a 10% deposit. Under arras penitenciales a buyer who withdraws forfeits the deposit and a seller who withdraws repays double, so it is the point at which the deal becomes financially binding. Buying process step by step.
- Escritura públicaPublic title deed
- The notarised deed of sale that transfers ownership of a Spanish property. It is signed in front of a notary by buyer, seller and, where a mortgage is involved, the lender, and is the document later registered at the Land Registry. Notary and escritura day walkthrough.
- NotarioNotary
- A public official who verifies identity and capacity, reads the deed, confirms the payments made and formalises the transfer. The notary is impartial — they act for neither party and do not replace your own lawyer. Notary and escritura day walkthrough.
- Registro de la PropiedadLand Registry
- The public register of Spanish property ownership and charges. Registration of the escritura, usually completed within four to eight weeks of signing, is what makes your ownership enforceable against third parties.
- Nota simpleLand Registry extract
- A short official extract showing the registered owner, the property description, and any mortgages, embargoes or easements attached to it. Lawyers obtain a fresh nota simple before arras and again immediately before completion.
- Cédula de habitabilidadHabitation certificate
- A regional certificate confirming a dwelling meets minimum habitability standards. It is required in several regions to complete a sale and to connect or transfer utility supplies.
- Licencia de primera ocupaciónFirst occupation licence
- The town hall licence confirming a newly built property was completed in line with its building permit. Lenders will not release funds on a new-build without it.
- Comunidad de propietariosOwners' association
- The legal body of owners in a building or urbanisation that manages shared areas and sets quarterly community fees. Unpaid community charges attach to the property, so a certificate of no debt is requested before completion.
- VPO (vivienda de protección oficial)Subsidised housing
- Housing built under a public protection scheme with price caps and resale restrictions for a set number of years. Non-resident buyers are generally excluded and most lenders will not finance VPO stock.
Mortgages & lending
- HipotecaMortgage
- A loan secured by a registered charge over a Spanish property. Spanish mortgages are granted in euros, signed at the notary alongside the escritura, and registered at the Land Registry as a first-ranking charge. Spanish property mortgages.
- TasaciónMortgage valuation
- The formal valuation of a property carried out by a Bank of Spain regulated valuation company under ECO/805/2003. The lender lends a percentage of the lower of the tasación value and the purchase price, so a low tasación directly reduces the loan. Tasación (valuation) explained.
- FEINBinding mortgage offer
- The Ficha Europea de Información Normalizada is the binding European standardised mortgage offer. Its issue starts a statutory ten-day reflection period, during which the borrower must visit the notary for a free pre-signing briefing.
- FiAEStandardised warning sheet
- The Ficha de Advertencias Estandarizadas accompanies the FEIN and sets out the specific risks of the loan — index used, rate reviews, early repayment charges and the consequences of default.
- EuríborEuro interbank reference rate
- The interbank rate most Spanish variable mortgages track, usually the 12-month fixing plus a lender margin. Variable loans reprice annually or half-yearly against the published Euríbor on the review date. Current Spanish mortgage rates.
- DiferencialLender margin
- The fixed percentage a Spanish lender adds to Euríbor on a variable-rate mortgage. A typical non-resident diferencial sits between 1.0% and 2.0% depending on profile, LTV and product bundling.
- Hipoteca mixtaMixed-rate mortgage
- A loan fixed for an initial period — commonly five or ten years — that then reverts to Euríbor plus a margin for the remaining term. It is the most competitively priced structure offered to non-residents in most years.
- BonificacionesRate discounts for bundled products
- Reductions to the mortgage rate granted in exchange for taking the lender's products — salary or income deposit, life cover, home insurance or an alarm contract. Each product typically cuts 0.10%–0.50% from the rate.
- LTV / financiaciónLoan to value
- The loan as a percentage of the lower of the purchase price and the tasación value. Non-residents are typically offered 60%–70% LTV in Spain, with residents reaching 80%. Non-resident mortgages in Spain.
- Ratio de endeudamientoDebt-to-income ratio
- Total monthly debt payments worldwide, including the new Spanish loan, divided by verified net monthly income. Spanish lenders generally cap this at 30%–40% and stress-test variable loans at a higher rate.
- SubrogaciónMortgage transfer
- Transferring an existing mortgage to a new lender (subrogación de acreedor) or taking over the developer's mortgage on a new-build (subrogación de deudor), usually cheaper than cancelling and registering a fresh loan. Refinance a Spanish property.
- Amortización anticipadaEarly repayment
- Repaying capital ahead of schedule. Spanish law caps compensation at 0.15% in the first five years (or 0.25% in the first three) for fixed-to-variable conversions and 2% falling to 1.5% on fixed loans, with many lenders charging nothing.
Bridging & development
- Préstamo puenteBridging loan
- Short-term, asset-backed lending of typically 6–24 months used to complete quickly, buy at auction, refurbish or release equity before a sale or term mortgage repays it. Spanish bridging is priced monthly plus an arrangement fee of 2%–5% dependent on project scenario. Bridging finance in Spain.
- SalidaExit
- The repayment route for a short-term facility — sale of the asset, refinance onto a term mortgage, a corporate liquidity event or development exit finance. Lenders underwrite the exit as closely as the asset itself. Exit strategies lenders accept.
- Préstamo promotorDevelopment loan
- Construction finance drawn in stages against certified works, sized on loan to cost and loan to gross development value, and usually conditional on a level of pre-sales for residential schemes. Spanish development finance.
- Certificación de obraWorks certificate
- The architect's monthly certificate of completed construction value. Development lenders release each drawdown against the certified figure rather than against invoices or forecast spend.
- Licencia de obraBuilding licence
- The municipal permit authorising construction or major works. Development finance is conditional on a granted, unappealed licence; bridging can sometimes be arranged before grant at lower leverage.
- Declaración de obra nuevaNew build declaration
- The notarised declaration registering a completed or in-progress building at the Land Registry. Without it a newly built property cannot be sold or mortgaged.
Tax & costs
- ITPTransfer tax on resale property
- Impuesto sobre Transmisiones Patrimoniales is paid by the buyer on resale homes at a regional rate, commonly 6%–10% of the declared price. It is the single largest acquisition cost on a second-hand purchase. Cost of buying property in Spain.
- IVA + AJDVAT and stamp duty on new builds
- New-build homes carry 10% IVA plus Actos Jurídicos Documentados stamp duty of roughly 0.5%–1.5% depending on the region, paid by the buyer instead of ITP.
- Plusvalía municipalMunicipal land value tax
- A town hall tax on the increase in the cadastral land value during the seller's ownership. It is legally the seller's liability on a sale, though a non-resident seller's buyer can be held secondarily liable.
- IBIAnnual property tax
- Impuesto sobre Bienes Inmuebles is the annual council tax on Spanish property, calculated from the cadastral value and typically 0.4%–1.1% of it each year. Spanish property taxes for non-residents.
- IRNRNon-resident income tax
- The tax non-resident owners pay each year — 19% for EU/EEA residents and 24% for others — either on actual rental income or on a deemed income where the property is not let.
- Valor de referenciaCadastral reference value
- The minimum taxable value set by the Cadastre since 2022. Transfer tax is charged on the higher of the price paid and this reference value, so a below-market price does not reduce the tax bill.
- Retención del 3%3% withholding on non-resident sales
- When the seller is non-resident, the buyer must withhold 3% of the price and pay it to the tax authority against the seller's capital gains liability, reclaimable if the actual gain is lower.
People & paperwork
- NIEForeigner identification number
- The Número de Identidad de Extranjero is the Spanish tax identity number every foreign buyer needs to purchase property, open a bank account, take a mortgage or pay tax. It is obtained at a consulate, in Spain, or by power of attorney. NIE number guide.
- Poder notarialPower of attorney
- A notarised authority allowing your Spanish lawyer to sign on your behalf. It can be granted in Spain or abroad with an Apostille and sworn translation, and lets buyers complete without travelling.
- GestoríaAdministrative agency
- The firm that pays the purchase taxes, submits the deed for registration and handles the post-completion paperwork. Lenders normally appoint their own gestoría and pass the fee to the borrower.
- Apostilla de La HayaApostille
- The international certification that authenticates a foreign public document for use in Spain. Powers of attorney, company documents and some certificates need an Apostille plus a sworn Spanish translation.
- Traducción juradaSworn translation
- A translation certified by a translator officially appointed by the Spanish Ministry of Foreign Affairs. Lenders and notaries require sworn translations of foreign documents such as tax returns and marriage certificates.
- Certificado de no residenteNon-residency certificate
- A police-issued certificate confirming you are not resident in Spain. Banks require it to operate a non-resident account and renew it every two years.
The five terms that most often cost buyers money
- Arras penitenciales — signing before your mortgage is agreed in principle puts a 10% deposit at risk if finance is not in place by the completion date.
- Tasación — a valuation below the agreed price reduces the loan, because lenders apply the LTV to the lower of value and price, and the shortfall is cash.
- Valor de referencia — transfer tax is charged on the higher of price paid and the cadastral reference value, so a keen price does not cut the tax bill.
- Bonificaciones — a headline rate often assumes you take life cover, home insurance and an income deposit; the unbundled rate can be 0.5%–1.0% higher.
- Retención del 3% — buying from a non-resident seller obliges you to withhold and remit 3% of the price, a duty that falls on the buyer, not the seller.
Frequently asked
Questions from readers
What is the difference between arras and escritura?
The contrato de arras is the private deposit contract signed early in the process, normally with 10% of the price, and it binds both parties financially. The escritura pública is the notarised deed of sale signed later at the notary, which actually transfers ownership and is then registered at the Land Registry.
What does tasación mean in a Spanish mortgage?
Tasación is the formal mortgage valuation carried out by a Bank of Spain regulated valuation company under order ECO/805/2003. The lender applies its loan-to-value percentage to the lower of the tasación figure and the purchase price, so the valuation directly determines how much you can borrow.
Is the FEIN the same as a mortgage offer?
Yes. The FEIN (Ficha Europea de Información Normalizada) is the binding European standardised mortgage offer. Once issued, a statutory ten-day reflection period runs, during which you must attend a free pre-signing briefing with the notary before the deed can be signed.
Do I pay ITP or IVA on a Spanish property?
Resale homes attract ITP transfer tax at a regional rate, commonly 6%–10% of the taxable value. New-build homes bought from a developer attract 10% IVA plus AJD stamp duty of roughly 0.5%–1.5% instead. You never pay both on the same purchase.
Who pays the plusvalía municipal?
By law the seller pays the plusvalía municipal, the town hall tax on the increase in cadastral land value. Where the seller is non-resident, the buyer can be held secondarily liable, which is why lawyers typically retain funds at completion until the tax is settled.
Do I need to speak Spanish to sign at the notary?
No, but the notary must be satisfied you understand the deed. If you are not fluent, either an official interpreter attends, the deed is prepared bilingually, or your lawyer signs under a notarised power of attorney on your behalf.
What is a nota simple and how do I get one?
A nota simple is the Land Registry extract showing the registered owner, the legal description of the property, the registered surface area and any mortgages, embargoes or charges against it. Any person can request one from the Registro de la Propiedad for a few euros, and your lawyer will obtain a fresh copy shortly before signing to confirm nothing has changed.
What does diferencial mean on a Spanish mortgage?
The diferencial is the fixed margin a Spanish lender adds to 12-month Euríbor on a variable-rate mortgage. A quote of Euríbor plus 1.2% means the pay rate is the current Euríbor index plus a 1.2% diferencial, reviewed annually or every six months depending on the contract.
What are bonificaciones and should I take them?
Bonificaciones are rate discounts granted in exchange for taking additional products — life cover, home insurance, a salary or income deposit, a card or a pension contribution. They can cut the headline rate by 0.5%–1.0%, but the premiums often exceed the interest saved, so compare the unbundled rate against the total annual cost of the bundled products.
What is the valor de referencia and how does it affect my tax?
The valor de referencia is the cadastral reference value set by the Catastro for each property. Since 2022 transfer tax on resale purchases is charged on the higher of the price paid and the valor de referencia, so buying below the reference value does not reduce the ITP bill.
What is the retención del 3% when buying from a non-resident?
When the seller is not tax resident in Spain, the buyer must withhold 3% of the purchase price and pay it to the Spanish tax authority using form 211 within one month of completion. The duty falls on the buyer, so failing to withhold leaves you liable for the amount.
What is the difference between arras penitenciales and a reservation contract?
A reservation contract takes the property off the market for a small sum, commonly €3,000–€6,000, while your lawyer runs due diligence. Arras penitenciales come later, normally at 10% of the price, and are legally binding: withdraw and you lose the deposit, while a withdrawing seller repays double.