Property Buying Glossary

AJD

AJD (Actos Juridicos Documentados) is a Spanish stamp duty that applies to transactions documented in a public deed before a notary, including new build property purchases. In Andalusia (which covers the Costa del Sol) the AJD rate is currently 1.5% of the purchase price. It is paid on completion day alongside VAT. AJD applies to new build purchases; resale properties pay Transfer Tax (ITP) instead.

AJD Tax (Actos Juridicos Documentados)

AJD stands for Actos Juridicos Documentados, which translates as Documented Legal Acts. It is a form of stamp duty charged on the notarisation of official documents in Spain, including mortgage deeds and, in some regions, new-build purchase deeds. The rate varies by autonomous community. In Andalusia, which covers the Costa del Sol, the AJD rate on new-build properties is 1.2 per cent of the purchase price, applied on top of the 10 per cent VAT (IVA) already charged on new homes.

Bank Guarantee

A bank guarantee (aval bancario) is a legal commitment from a Spanish bank to refund a buyer's stage payments if the developer fails to complete the property within the agreed timeframe or becomes insolvent. It is a mandatory legal requirement for all off-plan property purchases in Spain under Ley 57/1968 (updated 2015). Bank guarantees should be obtained for each stage payment individually.

Community Fees

Community fees (cuota de comunidad) are regular charges paid by all property owners within a residential development or building to cover the maintenance and operation of shared facilities and common areas. These include the maintenance of gardens, pools, lifts, security, cleaning of common areas, building insurance, and the management company fees. Community fees in Costa del Sol typically range from 100 to 500 euros per month depending on the level of facilities.

Completion

Completion in Spanish property buying refers to the final stage of the purchase process when the title deed (escritura publica) is signed at the Spanish notary. On completion day the buyer pays the outstanding balance of the purchase price, pays applicable taxes (VAT on new builds), signs the title deed in the presence of the notary, and receives the keys to the property. The title deed is then registered at the Land Registry.

New Build Property

A new build property is a residential property that has been recently constructed and has not been previously owned or occupied. In Spain new builds are typically sold with a 10-year structural guarantee (garantia decenal), full energy certification, and all modern building standard compliance. New build purchases are subject to VAT (10%) rather than Transfer Tax (ITP) which applies to resale properties.

Nota Simple

A nota simple is an official summary document from the Spanish Land Registry (Registro de la Propiedad) that shows the current ownership details of a property, any mortgages or charges secured against it, any restrictions on the title, and the cadastral reference. It is the most important due diligence document for any property purchase in Spain.

Off-Plan Property

Off-plan property refers to a residential or commercial property that is purchased before construction is complete. The buyer agrees to purchase based on architectural plans, CGIs, show apartments and a specification document rather than a completed building. Payment is typically made in stages tied to construction milestones.

Private Purchase Contract

The Private Purchase Contract (Contrato Privado de Compraventa or PPC) is the main legal agreement between a buyer and developer in an off-plan property transaction. It sets out all the terms of the sale including the purchase price, full payment schedule, completion date, property specification, bank guarantee obligations, penalties for delay, and dispute resolution. It is signed after the reservation stage and typically involves payment of 10% to 30% of the purchase price.

Property Valuation (Tasacion)

A property valuation, known in Spanish as a tasacion, is an independent assessment of a property's market value carried out by a certified appraiser (tasador) who is recognised by the Bank of Spain. The valuation is based on comparable sales in the area, the physical condition of the property, and its location. In Spain, lenders use this figure rather than the agreed purchase price to determine how much they will lend.

Reservation Agreement

A reservation agreement is a contract signed when a buyer pays an initial holding deposit to secure an off-plan or new build property. It removes the property from sale for a defined period, typically 14 to 30 days, while due diligence is conducted and the main Private Purchase Contract is prepared. The reservation fee is typically 1% to 3% of the purchase price or a fixed amount such as 5,000 to 15,000 euros.

Title Deed

The title deed (escritura publica de compraventa) is the notarised legal document that transfers ownership of a Spanish property from the seller (or developer) to the buyer. It is signed in the presence of a Spanish notary on completion day, records the purchase price and all relevant details, and is then registered at the Land Registry to formally establish the buyer as the legal owner.