Buying a home in Spain: arras, the deed, the nota simple and the mortgage

The arras contract is the agreement signed before the deed, by which the buyer hands over a sum of money to reserve the home and to fix the terms of the future sale (price, deadline for signing the deed and who pays which costs). It is not a mere receipt: what you sign determines what happens if the transaction does not go through in the end.

There are 3 types and each one has different effects. Arras confirmatorias (confirmatory deposit) serve as proof that a contract exists and as an advance on the price: they do not allow you to withdraw, so if one party fails to perform, the other can demand performance or terminate the contract with compensation for damages. Arras penales (penalty deposit) work as a penalty agreed in advance for breach. Arras penitenciales (withdrawal deposit, article 1454 of the Codigo Civil, the Spanish Civil Code) allow either party to withdraw: a buyer who pulls out loses what they paid and a seller who pulls out has to return double.

It is worth being clear that if the contract does not specify the type, the courts take the arras to be confirmatorias. For either party to be able to withdraw by losing or doubling the deposit (arras penitenciales), it has to be stated clearly and unambiguously in the contract. That is why the drafting matters: an ambiguous clause can leave you without the way out you thought you had.

Managora drafts the arras contract with the type that suits you, sets the deadlines and the penalties and protects your position. You can check the current price of the service on the page for that procedure (contrato_arras_compraventa).

The nota simple is the informative document from the Registro de la Propiedad (the Spanish Land Registry) that states who the real owner of the home is, what the property consists of and what charges are attached to it: mortgages, embargos (court-ordered seizures), easements, tax liens or restrictions. It is the legal X-ray of the property.

You should request it before you commit any money, that is, before signing the arras, and it is advisable to check it again just before the deed is signed. That way you confirm that the person selling to you is the registered owner and that there is no hidden debt or embargo that you would end up inheriting along with the home.

It is requested from the Registro de la Propiedad through the online portal of the Colegio de Registradores (the Spanish association of land registrars), identifying the property by its registry details or by its Codigo Registral Unico (CRU, the unique registry code), and you receive it by email. You can see the registry charge and the price of the service on the page for that procedure (nota_simple_rp).

Managora requests the nota simple and interprets its contents for you. If it reveals a charge, an embargo or an ownership entry that does not add up, we warn you before you put down a single euro.

The sale is formalised by converting the agreement into a public deed before a notario. Under article 1462 of the Codigo Civil, signing the public deed amounts to delivery of the home, unless the deed itself says otherwise. That is the moment the house becomes yours.

Although a private contract is valid between buyer and seller, only the public deed allows the purchase to be registered at the Registro de la Propiedad and made enforceable against third parties (for example, against a creditor of the seller). Signing before a notario is a compulsory step in the process: Managora coordinates it and goes through it with you, without you having to find or arrange anything yourself.

After signing, the taxes on the purchase have to be settled and the deed has to be filed at the Land Registry so that the new ownership is registered in your name. Managora takes care of the tax settlement and of the registration. You can see the price of the service on the page for that procedure (contrato_compraventa_inmueble).

Paying the last instalment extinguishes the debt with the bank, but it does not erase the mortgage from the Registro de la Propiedad. The mortgage remains registered as a charge until it is cancelled at the registry. While it is still there, it will show up on the nota simple and it can block a future sale or the granting of a new mortgage. The certificado de deuda cero (zero-debt certificate) on its own cancels nothing at the Land Registry.

The process has 4 steps: first, ask the bank for the certificado de deuda cero, which the bank has to provide free of charge; second, execute the deed of cancellation before a notario, which is signed by an apoderado (authorised representative) of the bank; third, file the self-assessment for Actos Juridicos Documentados (AJD, Spanish stamp duty), which is exempt in the case of a mortgage cancellation, although the form still has to be filed even if the result is zero; and fourth, register the cancellation at the Land Registry.

There is an alternative route when the mortgage is very old: cancellation by lapse of time. Article 82 of the Ley Hipotecaria (the Spanish Mortgage Act) allows it to be cancelled by means of a simple application (with no deed) once the legal time limits have passed, broadly 20 years plus 1 from the date the secured obligation fell due, or the time limits set by article 210 of the same act for other situations. It is a useful option when the bank no longer exists or the debt was paid off decades ago.

Managora handles the full cancellation: we request the certificate, coordinate the deed before the notario, file the tax and register the cancellation at the Land Registry. You can see the price of the service on the page for that procedure (cancelacion_hipoteca_rp).

Buying a home is taxed differently depending on whether it is new or second-hand. A second-hand home is taxed under the Impuesto de Transmisiones Patrimoniales (ITP, Spanish transfer tax), whose rate is set by each comunidad autonoma (regional government). A new home is taxed under IVA (Spanish VAT) plus Actos Juridicos Documentados. The exact amounts depend on the region and on the price, so please see the detail on the corresponding procedure page.

Besides the taxes, the transaction involves notary fees, Land Registry fees and processing fees. The Codigo Civil (article 1455) splits some of these costs between buyer and seller by default unless something different is agreed in the arras, which is why it is worth settling this in writing from the very beginning.

In a mortgage cancellation there are notary, Land Registry and processing costs, while Actos Juridicos Documentados is exempt. Managora tells you about all the costs in advance and handles them for you.

The logical order is this: first, the nota simple to check charges and ownership; second, the arras contract to reserve the home; third, preparing the transaction (financing and an updated nota simple); fourth, the public deed before the notario; fifth, settling the taxes and registering at the Land Registry; and sixth, if applicable, the registry cancellation of the previous mortgage on the property.

The timescales are indicative: the nota simple is usually obtained within hours or a few days; the period between the arras and the deed is agreed between the parties (often several weeks, the time needed to close the financing); registration and cancellation depend on the pace of each Land Registry office. Managora gives you a realistic forecast for your particular case.

Managora accompanies the purchase from start to finish: we draft the arras contract, request and interpret the nota simple, coordinate the deed before the notario, settle the taxes, register the home in your name and, where applicable, cancel the mortgage you have already paid off. A single point of contact for the whole process, without you having to look for professionals yourself.