Arras contract in Spain: the three kinds, the risks and what to check first

The arras contract is the first and riskiest document in a Spanish purchase: it fixes the price, the deadline for completion at the notary and what happens if either side walks away. There is only one statutory rule — article 1454 of the Civil Code, unchanged since 1889 — and the three kinds of arras were created by case law. The main trap: if the contract does not state the type expressly, the Supreme Court reads it as confirmatory, and walking away then costs more than the deposit, because you can be sued to complete the purchase.

Below: how the three kinds differ and what recent case law says, how much is paid and for how long, what you can demand from the seller before handing over any money, which encumbrances to check, how to draft a mortgage condition, what the purchase taxes come to and what a non-resident needs on top. The purchase itself is covered in buying a house in Spain, and the registry extract in the nota simple.

Three kinds of arras and what the courts decide

What the case law adds:

• Party autonomy is respected. In a judgment of 19 February 2025 the Supreme Court confirmed that where a contract calls the deposit penitential three times, that is how it must be read. The flip side: where the type is not stated, the presumption of confirmatory arras applies.
• A silent seller can end up paying double. In a judgment of 9 February 2026 the court treated the seller’s complete passivity as an implied withdrawal, and the buyer received double the deposit.
• A developer may withdraw. In a judgment of 9 April 2026 the court held that a developer can leave the contract without giving reasons where the clause is symmetrical for both parties: such a clause is not unfair.
• No notarial demand is required. Article 1504 of the Civil Code, on demands through a notary, does not apply to arras — you cannot count on being formally warned first.
• The case law itself is split on whether a bare reference to article 1454 is enough to make a deposit penitential: judgments from 2014 and 2018 point in opposite directions. The dominant line says it is not enough, so the wording is spelled out in full.

How much is paid and for how long

There is no rule on the amount. In practice the benchmark is around 10% of the price, and the same figure appears in the reasoning of the 2025 Supreme Court judgment. On an expensive property that is real money: 10% of €1.5 million is €150,000 at risk, and the type of arras decides whether it is lost in full.

The period to completion is usually one to three months, but with a mortgage it cannot be short: the mortgage credit act 5/2019 requires the bank to give you the document pack at least ten calendar days before signing, and within that period you must attend a free consultation with the notary in person. When agreeing the deadline in the arras, add those ten days and the time for the valuation — the loan itself is covered in mortgages in Spain.

What you can demand before handing over money

This is the most underrated rule: article 31 of the housing act 12/2023 gives the buyer the right to receive the full documentation on the property before the transaction is formalised and before any amount on account is handed over. The checklist below is therefore a right, not a wish, and a seller’s refusal to comply is itself a reason not to sign.

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The mortgage condition: how not to lose the deposit

If the purchase depends on a loan, the contract includes a suspensive condition under articles 1113–1123 of the Civil Code: if the bank says no, the contract does not take effect and the deposit is returned. The wording has to be specific:

• which bank or banks and for what amount the application is made;
• the date by which approval must be obtained, with room for the ten compulsory days before the notary;
• what counts as a refusal (a written refusal, or no answer by the date) and which document proves it;
• that the deposit is returned in full if the condition is triggered, and within what period.

Without such a clause, a refusal by the bank is your problem, not a ground for getting the money back.

Taxes: what the purchase will cost

The arras contract itself is not taxed: transfer tax arises on the day of the purchase. But it has to be calculated before the deposit, because the rate depends on the region and on price thresholds.

• The base is not only the price. The tax is charged on the higher of the transaction price and the cadastral reference value. The Constitutional Court confirmed that approach in February 2026, so understating the price in the contract no longer works.
• The Valencian threshold is worth calculating in advance: at €1,000,000 the tax is €90,000, and at €1,000,001 it is €110,000. One euro of price costs €20,000 of tax, which is a direct argument about the figure to agree in the arras.
• Buying from a non-resident obliges you to withhold 3% of the price and pay it to the tax agency on form 211 within a month; if you do not, the property answers for that debt. Sellers should know this too — see non-resident taxes.
• The owner’s other taxes and annual charges are covered in property taxes in Spain.

What a non-resident needs on top

1. An NIE — the foreigner’s number is needed for the purchase and for tax; it can be obtained before arrival through a consulate, as explained in the NIE guide.
2. A power of attorney. Both the arras and the deed can be signed through a representative under a notarised power; a document issued abroad needs an apostille and a sworn translation.
3. Foreign investment declaration. A purchase above €500,000 per property is declared on form D-2A. If the money comes from a jurisdiction that does not cooperate on tax matters, form DP-2 is filed before the transaction.
4. Source of funds. The bank and the notary check where the money came from: sale agreements, statements and tax documents are prepared in advance, or the transfer stalls in compliance.
5. Who pays what. By default the notary and the registry fall on the buyer and the land value tax on the seller; the arras says so expressly, because parties often agree otherwise.

For expensive properties it is worth adding two more clauses to the arras: the seller’s duty to clear encumbrances by the completion date, and how keys and utility meters are handed over. How that market works is covered in luxury property in Spain, and our property search service helps find the property.

Frequently asked questions

What is an arras contract in Spain?

A preliminary contract in which the parties fix the property, the price, the deadline for completion and the consequences of walking away. The buyer pays part of the price — in practice around 10%. The only statutory rule on arras is article 1454 of the Civil Code.

How much do I lose if I pull out of the purchase?

It depends on the kind of arras. With penitential arras, only the deposit. With confirmatory arras the seller may instead sue for performance or terminate and claim damages, in which case the loss is not capped at the deposit.

What if the contract does not say which kind it is?

As a rule the court treats the deposit as confirmatory, the harshest option for the buyer. That is why the penitential character is spelled out in full rather than by a bare reference to the article.

What if the seller changes their mind?

With penitential arras they repay double. With confirmatory arras the buyer may demand performance or terminate with damages. In 2026 the Supreme Court treated even a seller’s complete passivity as an implied withdrawal.

Can I get the deposit back if the bank refuses the mortgage?

Only if the contract contains a suspensive condition on loan approval, naming the bank, the amount, the deadline and the document that proves a refusal. Without it, a refusal gives no right to a refund.

Which documents can I demand before signing?

All the documentation on the property: the housing act gives the buyer that right before any amount on account is handed over. At a minimum: the registry extract, the comunidad debt certificate, IBI details, information on tenants and the energy certificate.

Is the deposit taxed?

No, transfer tax arises on the day of completion. But the rate is calculated in advance: it depends on the region, and in Valencia and Catalonia on price thresholds as well.

What does a non-resident need before the arras?

An NIE, a power of attorney for remote signing, proof of the source of funds for the bank, and for a purchase above €500,000 per property a foreign investment declaration on form D-2A.

Sources

• Civil Code: articles 1454, 1124, 1152–1155, 1113–1123, 1504
• Housing Act 12/2023, article 31: documents before any amount on account
• Mortgage Credit Act 5/2019: articles 14 and 15, the ten calendar days
• Local Finance Act: articles 63, 64, 75 and 106 — IBI and land value tax
• Transfer Tax Act; Madrid: 6%; Valencia: 9% and 11%; Catalonia: progression and 20%
• Non-Resident Income Tax Act: the 3% withholding on purchases; Royal Decree 571/2023: foreign investment declarations