Legal considerations
As the property is located in Spain, most of the legal conflicts would be dealt with according to Spanish and English Law. Most of the contracts will state that Spanish Law would govern the transaction and establish that any claim must be brought to the Spanish Court where the property is located.
In respect of legal, financial or tax implications, the UK purchaser should be familiar with the different requirements involved in the conveyance and should proceed with the same care as when purchasing property in the UK. If this is not the case, it is strongly recommended to seek professional advice in the following areas
- Financial advice regarding financing the acquisition .
- Legal advice to make sure that legal and planning enquiries are conducted and a proper private contract is negotiated.
- Tax advice to find out the most tax efficient way to acquire the property, considering the tax position in the UK and Spain for all the different taxes involved, including Capital and Inheritance tax potential liabilities.

Tax residence in Spain
Spain applies a residence-based system of income taxation. All the Worldwide income or gains are taxable in Spain for the Spanish resident, even if they have not been remitted to Spain. The Spanish income tax returns should report the income of the taxpayer, spouse and dependants, although each member or the family can file independent tax returns. The residence position should be established after discussing carefully the UK
Income and Wealth Tax. - The Spanish Parliament passed the Non-residents Income Tax Act (Ley 41/1998, Ley del Impuesto Sobre la Renta de No Residentes). According to this Act and the Self-Assessment regime, non-residents receiving any income or owning any assets in Spain must file a return every year, including all Spanish taxable income calculated according to certain rules. The value of the property is to be included in the Return and will have a small tax charge calculated according to the Cadastral Value. Wealth Tax is also applicable to non residents assets located in Spain
Capital Gains Tax.- Transferring property located in Spain by a non-resident in Spain will be subjected to Capital Gains Tax in Spain, both according to Spanish legislation and to the provisions of the Double Treaty with the UK.
Council Tax (Impuesto sobre Bienes Inmuebles -'IBI').- This is a local tax payable to the town council by all property owners, residents and non-residents alike, similar to the rates payable in the UK.
Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones-ISD).- The acquisition by inheritance or gift of a property situated in Spain carries a real obligation to IHGT payable by the inheritors or the receiver of the gift. The beneficiary position- and not the transferor's estate - should be considered for tax planning purposes.

A Spanish will is also recommended in order to avoid further delays in dealing with the estate distribution.
Social Security.- By virtue of European Law, reciprocal agreements exist within the European Community member countries. It is possible for UK residents to enjoy the Health services provided by the Spanish Social Security Administration as well as to obtain other benefits if moving to Spain as a resident.

Mortgages and Bank accounts. Spanish Banks can offer mortgages to non resident individuals, usually in Euros. Spanish mortgages are repaid using the capital and interest repayment method. Interest only, endowment and pension-linked mortgages are not commonly available in Spanish banks. Non-Spanish nationals may open a resident or non-resident bank account. When opening the bank account, you will need to show proof of identity, your residence card and may be asked for proof of income.