Real Estate Glossary
+57 real estate terms explained clearly and simply. Your essential guide to buying property in Spain and on the Costa del Sol.
AJD (Actos Jurídicos Documentados)
Stamp Duty on documented legal acts. A tax levied on the formalisation of notarial, commercial and administrative documents. When buying a new-build home it is charged on the price stated in the deed. In Andalusia the rate is 1.2%.
Arras
A deposit the buyer pays the seller as an earnest payment to reserve the property. The most common type is the "arras penitenciales" (art. 1454 of the Civil Code): if the buyer pulls out they lose the deposit; if the seller does, they must return double. It usually amounts to between 5% and 10% of the price.
Calificación energética
Energy performance certificate. A mandatory certificate that rates a property’s energy efficiency on a scale from A (most efficient) to G (least efficient). It is required to sell or rent any property in Spain and must be issued by a certified technician.
Cargas
Encumbrances. Debts, mortgages, seizures or other obligations attached to a property and recorded at the Land Registry. Before buying, it is essential to confirm the property is free of encumbrances or to know exactly which ones exist.
Catastro
The Cadastre. An administrative register under the Ministry of Finance that holds the physical, legal and economic description of every property. The cadastral reference is the unique identifier of each property and is required for any real estate transaction.
Cédula de habitabilidad
Certificate of occupancy. An administrative document confirming that a home meets the minimum habitability requirements (floor area, ventilation, installations). In Andalusia it is called the "Licencia de Ocupación" and is needed to set up utility connections.
Certificado de deuda pendiente
Certificate of outstanding community debt. A document issued by the owners’ association certifying whether the seller is up to date with community fee payments. The buyer should request this certificate before signing the deed.
Comunidad de propietarios
Owners’ association. A legal entity made up of all the owners in a building or residential development. It is governed by the Horizontal Property Law and is responsible for managing and maintaining the common areas (pool, gardens, lifts, façade, etc.).
Contrato de compraventa
Private purchase contract. A private document between buyer and seller setting out the terms of the transaction: price, deadlines, payment method and penalties. It precedes the signing of the public deed before a notary.
Cuota de participación
Participation quota. The percentage assigned to each home within an owners’ association. It determines voting weight at meetings and the proportion of common expenses each owner must bear. It is set in the building’s deed of horizontal division.
Derecho de tanteo y retracto
Pre-emption and redemption rights. A preferential right that allows certain parties (tenant, co-owner, public administration) to acquire a property on the same terms as a third party. "Tanteo" is exercised before the sale and "retracto" afterwards.
Derrama
Special assessment. An extraordinary payment agreed by the owners’ association to fund works or repairs not covered by the ordinary fee. It may be for façade refurbishment, lift installation, pool repair, etc.
Embargo
Seizure / lien. A judicial or administrative measure by which a property is retained as security for the payment of a debt. A seized property can be sold, but the charge passes to the new owner unless it is cancelled beforehand.
Escritura pública
Public title deed. The notarial document that legally formalises the purchase of a property. The notary attests to the transaction and verifies the identity of the parties, the title and any encumbrances. It is essential in order to register the property at the Land Registry.
Euribor
The European reference index used to calculate the interest rate on most variable-rate mortgages in Spain. It is published daily and the mortgage is usually reviewed annually or every six months.
Fianza
Rental deposit. A mandatory deposit the tenant gives the owner when signing a rental contract. By law it equals one month’s rent for a primary residence and two months for other uses. The owner must lodge it with the relevant regional body.
Finca
Registered property unit. A unit of real estate registered at the Land Registry with a unique property (finca) number. It may refer to a plot of land, a home, a commercial premises or any other registered property.
Gastos de comunidad
Community fees. The monthly or quarterly fee each owner pays to maintain the common areas of the building or development: cleaning, gardening, pool, building insurance, concierge, etc.
Golden Visa
Golden Visa (residence-by-investment permit): a residence permit Spain granted to non-EU foreign investors, typically for buying property worth €500,000 or more (Law 14/2013). 2025 UPDATE: Spain ended the Golden Visa; the real estate investment route stopped being available as of 3 April 2025 (Organic Law 1/2025). It is no longer possible to obtain Spanish residency by purchasing a property.
IBI (Impuesto sobre Bienes Inmuebles)
Annual property tax. A municipal tax levied annually on the ownership of any property. It is calculated by applying a coefficient to the property’s cadastral value. It varies by municipality; on the Costa del Sol it ranges between 0.4% and 1.1% of the cadastral value.
Impuesto de Patrimonio
Wealth tax. A tax on the net wealth of individuals. In Andalusia there has been a 100% rebate since 2022, so it is effectively not paid. It applies to assets located in Spanish territory, including those of non-residents.
ITP (Impuesto de Transmisiones Patrimoniales)
Transfer tax. A tax paid when buying a resale (second-hand) home. In Andalusia the general rate is 7%. It must be settled within 30 working days of signing the deed.
IRNR (Impuesto sobre la Renta de No Residentes)
Non-Resident Income Tax. A tax that non-resident property owners in Spain must pay. It applies both when the property is rented out (on the income obtained) and when it is not (an imputed income based on the cadastral value). EU residents are taxed at 19% and non-EU residents at 24%.
IVA (Impuesto sobre el Valor Añadido)
VAT. An indirect tax applied to the purchase of a new-build (off-plan or newly built) home. The general rate for housing is 10% and 4% for officially protected housing. It is paid to the developer together with the price of the home.
Ley de Propiedad Horizontal
Horizontal Property Law. The legal statute (Law 49/1960) that governs owners’ associations in Spain. It sets out the rights and obligations of owners, the rules for meetings, the majorities required for each type of resolution and the management of common elements.
Licencia de primera ocupación (LPO)
First occupancy licence. A municipal licence certifying that a new-build home complies with planning and building regulations. It is required to set up utility connections (water, electricity, gas) for the first time.
NIE (Número de Identificación de Extranjero)
Foreigner Identification Number. A tax identification number that is mandatory for any foreigner carrying out economic transactions in Spain, including buying a property. It is applied for at the Immigration Office or at the Spanish consulate in the applicant’s home country.
Nota simple
Land Registry extract. A document issued by the Land Registry summarising the essential information about a property: who the owner is, the description of the property, the floor area and any encumbrances (mortgages, seizures). It is the first document to request before buying.
Notario
Notary. A public official who attests to legal acts such as the purchase of a property. The notary drafts the public deed, verifies the identity of the parties, checks for encumbrances and handles the settlement of taxes and the registration of the property. The buyer has the right to choose the notary.
Nuda propiedad
Bare ownership. Ownership of a property without the right to use or enjoy it, those rights belonging instead to the usufructuary. The bare owner owns the asset but cannot occupy it or collect its income until the usufruct ends (usually on the death of the usufructuary). It is common in inheritances and in arrangements where elderly people sell the bare ownership while retaining the right to live there.
Obra nueva
New-build property. A newly constructed home being sold for the first time. It can be bought off-plan (before construction) or completed. The applicable taxes are VAT (10%) + AJD (1.2% in Andalusia), as opposed to a resale home (ITP 7%).
Plusvalía municipal
Municipal capital gains tax. A municipal tax (IIVTNU) levied on the increase in the value of the land since the last transfer. It is paid by the seller in a sale and by the heir in an inheritance. Following the Constitutional Court ruling of 2021, it is only payable when there is an actual gain.
Poder notarial
Power of attorney. A document by which one person (the grantor) authorises another (the attorney) to act on their behalf in certain legal acts, such as signing a purchase deed. It is common when the buyer cannot travel to Spain for the signing.
Proindiviso
Undivided co-ownership. A legal situation in which several people co-own the same property without it being physically divided. Each co-owner holds an ideal (notional) percentage of the asset. Selling the whole property requires the agreement of all of them.
Registro de la Propiedad
Land Registry. A public institution where acts and contracts relating to real estate are recorded. Registration is not compulsory but is strongly advisable, as it provides legal certainty and protection against third parties. Without registration, a mortgage cannot be obtained.
Renta
Rent. In the rental context, the recurring (usually monthly) amount the tenant pays the owner for the use of the home. The annual updating of the rent is regulated by law.
Segunda mano
Resale property. A home that has already had at least one previous owner and is being transferred in a second or subsequent sale. The applicable tax is ITP (7% in Andalusia), instead of the VAT + AJD of a new-build.
Servidumbre
Easement. A right in rem that limits the use of one property for the benefit of another. The most common are the right of way (the right to cross a neighbouring property) and easements of light and views. They must be recorded at the Land Registry.
Subrogación hipotecaria
Mortgage subrogation. A transaction by which the buyer takes over the seller’s existing mortgage instead of applying for a new one. It can save on set-up costs but requires the bank’s approval. The term also refers to switching the lending bank.
Superficie construida
Built area. The total area of the home measured from the outer face of the walls, including internal partitions, enclosures and, where applicable, the proportional share of common elements. It is larger than the usable area.
Superficie útil
Usable (net internal) area. The genuinely habitable area of the home, measured from the inner face of the walls. It excludes partitions, pillars and ducts. It is usually between 15% and 25% smaller than the built area.
Tasación
Appraisal / valuation. An official valuation of a property carried out by a valuation company approved by the Bank of Spain. It is mandatory in order to grant a mortgage and determines the maximum value on which the bank will base the loan. It typically costs between €250 and €500.
Título constitutivo
Deed of horizontal division. The public deed that creates an owners’ association by dividing a building into independent units. It describes each home, premises or garage, their annexes (storage room, parking space) and sets the participation quotas.
Usufructo
Usufruct. A right in rem that allows a person (the usufructuary) to use and enjoy a property belonging to someone else, including the right to rent it out and collect the rent. The owner retains the bare ownership. It is very common in inheritances.
Valor de mercado
Market value. The estimated price at which a property could be sold under normal market conditions, taking into account location, condition, size and comparable properties. It differs from the cadastral value and the appraisal value.
Vivienda de protección oficial (VPO)
Officially protected (social) housing. Housing built with public assistance and subject to price limits and access conditions (maximum income thresholds). It carries selling restrictions for a set period and the applicable VAT is 4% instead of 10%.
Vivienda de uso turístico (VUT)
Tourist accommodation property. A home used for the temporary lodging of tourists in exchange for payment. In Andalusia it requires registration with the Tourism Registry and compliance with specific requirements. It is a popular investment option on the Costa del Sol.
Zona común
Common area. Spaces and facilities shared by all the owners in a community: pool, gardens, lifts, stairs, hallways, communal parking. Their maintenance is funded through the community fees.
Frequently asked questions about buying property in Spain
We answer the most common questions from Spanish and foreign buyers alike.
What documents do I need to buy a home in Spain as a foreigner?
You need an NIE (Foreigner Identification Number), a Spanish bank account, a valid passport and, if you apply for a mortgage, proof of income and employment. It is also advisable to engage a lawyer specialising in real estate law.
What taxes do I pay when buying a home in Andalusia?
For a resale home: ITP of 7%. For a new-build: VAT of 10% + AJD of 1.2%. On top of that there are notary fees (0.1-0.5%), Land Registry fees (0.1-0.3%) and the gestoría (paperwork agency). In total, budget for an extra 8% to 12% on top of the purchase price.
What is the nota simple and why is it important?
The nota simple is an extract from the Land Registry showing the owner of the property, its description and any charges it may have (mortgages, seizures). It is the first document to request before any purchase, to verify that everything is in order.
What is the difference between arras and señal?
Arras penitenciales carry a penalty: if the buyer withdraws they lose the amount paid, and if the seller withdraws they must return double. The señal, by contrast, is simply an advance on the price with no specific legal consequences, unless otherwise agreed.
What taxes do I pay as a non-resident property owner in Spain?
The IBI (annual, municipal), the IRNR (quarterly if rented out, annual if not), and the plusvalía municipal when you sell. In Andalusia there is no Wealth Tax to pay thanks to the 100% rebate. It is also advisable to appoint a tax representative if you live outside the EU.
What percentage of a mortgage can I get as a non-resident?
Spanish banks typically grant between 60% and 70% of the appraised value to non-residents, compared with the usual 80% for residents. The maximum term is usually 20-25 years for non-residents. It is essential to provide translated and apostilled financial documentation.
Got a question about any of these terms?
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