A practical guide to the earnest-money deposit agreement used when buying an existing (second-hand) home in Spain, and the clauses that protect international buyers.

Scope note: this article covers the arras contract as used in the purchase of resale (second-hand) residential property. Buying a new-build or off-plan (sobre plano) home involves a different legal framework — including the staged-payment guarantees required by law — which we address in a separate article.

What Is a Contrato de Arras?

If you are buying an existing, previously-owned home in Spain, you will almost certainly be asked to sign a contrato de arras before you get anywhere near the notary. The arras contract is a private, preliminary agreement between buyer and seller that reserves the property, fixes the price, and sets out the conditions under which the sale will be completed in a public deed (escritura pública) in front of a notary. It is accompanied by a deposit — typically 5% to 10% of the agreed purchase price — paid by the buyer at signing.

For foreign buyers in particular, the arras contract is the single most important document in the whole transaction. It is signed early, often under time pressure, and it is the point at which most of the buyer's legal and financial protection is either secured or lost. Spanish real estate practice gives significant legal weight to what this short document says — and does not say.

The Legal Basis: Article 1454 of the Spanish Civil Code

Spanish law recognises three types of arras, and the difference between them changes what happens if either party backs out. Getting the wording right is not a formality — it determines the buyer's real financial exposure.

• Arras penitenciales (withdrawal deposit) — the default form under Article 1454 of the Civil Code. Either party can walk away: the buyer forfeits the deposit, or the seller must return double the amount received. This is the most common structure and the one that gives a buyer the cleanest, most predictable exit if their circumstances change.

• Arras confirmatorias (confirmatory deposit) — treated as a simple advance payment. Neither party has an automatic right to walk away; if one side fails to complete, the other can sue for full performance of the sale or for damages, not just retain or double the deposit.

• Arras penales (penal deposit) — combines a penalty clause with the right to demand performance, and is used less frequently in residential transactions.

Because the consequences differ so significantly, the contract must state expressly which type of arras is being agreed. If the document is silent, Spanish courts generally presume arras penitenciales apply — but relying on a legal presumption instead of clear drafting is exactly the kind of risk a foreign buyer, unfamiliar with local practice, should avoid.

Why This Matters More for Foreign Buyers

Buyers purchasing from abroad face risks that Spanish resident buyers typically do not: unfamiliarity with the property registry system, currency and cross-border payment logistics, language barriers in a legally binding document, remote due diligence, and — increasingly — a shifting regulatory environment aimed specifically at non-resident and non-EU purchasers. A well-drafted arras contract is the tool that manages all of these risks before real money and legal commitments are on the line.

The Clauses Foreign Buyers Should Insist On

At a minimum, an arras contract for an international buyer should include the following protections:

1. Full identification and registry verification

• Complete identification of both parties (passport/NIE number) and the property, matched exactly against the Nota Simple issued by the Land Registry (Registro de la Propiedad).

• A representation from the seller that the property is free of charges, mortgages, liens, or unpaid community fees — or full disclosure of any that exist, with an agreed mechanism for their cancellation before completion.

2. Clear designation of the type of arras

• Express statement that the deposit is arras penitenciales (or whichever type is intended), with the exact forfeiture/double-refund consequence spelled out in plain language.

3. Suspensive (conditional) clauses

• Subject to satisfactory mortgage financing, where the purchase depends on a loan — with a defined deadline and the buyer's right to a full deposit refund if financing is genuinely refused.

• Subject to the buyer obtaining a NIE (foreigner identification number) and, where relevant, opening a Spanish bank account in time for completion.

• Subject to a satisfactory building survey, outstanding-debt (IBI, community fees) certificate, energy performance certificate, and, for older or rural properties, confirmation that the construction is legally registered and licensed.

4. A firm completion date and place

• A specific deadline for signing the escritura pública before a named or to-be-agreed notary, with the consequences of delay attributable to either party clearly stated.

5. Allocation of taxes and costs

• Clear allocation of notary fees, registry fees, Transfer Tax (ITP) or VAT/AJD as applicable, and the municipal capital gains tax (plusvalía municipal), which by law falls on the seller but is frequently negotiated.

• If the seller is a non-resident, confirmation that the buyer will withhold and pay to the Spanish Tax Agency the 3% non-resident retention on the purchase price (Article 25.2 of the Non-Resident Income Tax Law) — a legal obligation that falls on the buyer, and a common trap for those unfamiliar with the system.

6. Payment, currency, and anti-money-laundering documentation

• Specification of currency, payment method, and bank details, with a clear channel for international wire transfers and the source-of-funds documentation Spanish notaries and banks require under anti-money-laundering rules.

7. Power of attorney and representation

• If the buyer will not be physically present in Spain for the signing, a clause anticipating representation via a notarised and, where needed, apostilled power of attorney.

8. Language and governing law

• A bilingual version of the contract (Spanish and the buyer's language), with a clause specifying which language version prevails in case of discrepancy, and confirmation that Spanish law and the courts of the property's location govern the agreement.

9. Independent legal representation

• A clause — or simply the practice — confirming the buyer has been advised by an independent Spanish lawyer, not solely the estate agent handling the sale, who commonly acts for the seller's side of the transaction.

The Regulatory Backdrop in 2026

Foreign buyers should also be aware of a significant recent development in Spanish property policy: the real-estate investment route of the Golden Visa — residency in exchange for property investment — was formally abolished with effect from April 2025 under Organic Law 1/2025, so property purchase alone no longer confers Spanish residency rights.

The Bottom Line

The contrato de arras is a short document, but in Spanish practice it carries the full weight of the transaction: it fixes the price, defines the exit rights of both parties, and sets the conditions under which the sale can proceed to completion. For a foreign buyer, having this contract drafted or reviewed by a lawyer who understands both Spanish property law and the practical risks of a cross-border purchase is not an added cost — it is the protection that makes the rest of the purchase safe.

This article is for general informational purposes only and does not constitute legal advice. Every property transaction is different, and the specific clauses appropriate for your purchase should be reviewed by a qualified Spanish lawyer before you sign. If you are considering buying property in Spain, our team would be glad to review your arras contract and guide you through the purchase process.