Buying Property In Spain
Buying property in Spain is relatively straightforward. Before buying a property, the foreign buyer requires an NIE (fiscal number), to be applied for and obtained by a police station. Normally the NIE is processed on the same day for Spanish or EU citizens and may take a few weeks for others.
For Buyers / Investors from outside the European Union it is good to know that when investing at least €500,000 in Spanish property, you can apply for the Golden Visa program to get a Residency Visa in Spain. The Golden Visa includes also your family members (spouse, children, and dependent parents) and the Golden Visa applies also to unmarried couples. All family members will have access to public services such as state health care and schooling. If you like to travel within the EU, the Golden Visa allows you unlimited travel within the EU.
The Golden Visa is also available when investing in a Spanish company. If you are an investor and you are looking to purchase a Real Estate business, please contact us while we may have the right Real Estate business for you.
What to consider when buying a property in Spain:
APPOINT A LOCAL LAWYER
The lawyer, who should be local and speaks your language will carry out the necessary checks on the property documentation and complete the legal requirements of the sale. The first check is to obtain from the property registry a “Nota Simple” which will identify the registered owner and provide details of mortgages or embargos on the property. You should obtain from the seller receipts for payment of IBI (Impuestos sobre bienes Inmuebles), the annual real estate tax.
THE HOLDING DEPOSIT
After the price is agreed and the “Nota Simple” has been checked, you will have to pay a holding deposit to take the property off the market and reserve it until you can reach completion. Your lawyer will prepare a formal offer and agreement contract for this purpose.
EXCHANGE OF PRIVATE CONTRACT
The exchange of private contracts or the signing of an option to buy would normally take place about two weeks after the formal acceptance of an offer when the lawyer would have completed his searches. The contract would set out all the agreed terms and set a date for completion. It is usual for the buyer to pay a 10% deposit at this stage.
COMPLETION AT THE NOTARY
On the assigned day, the buyer and seller (or their authorized representatives) will attend the office of the notary to sign the “Escritura de Compraventa” (the Title Deeds), which should state that the property is sold free of debt, mortgages, and tenants. The Notary does not check the terms but solely certifies that the parties have agreed to them. At this point, the balance of the payment is made and property possession passes to the buyer. Your lawyer will arrange payment of taxes and fees, and register your title deed at the property registry.
PROPERTY PURCHASE TAXES & FEES
There are three fees to be paid: Lawyers fee, Notary fees, and Property Registry fees. Also, there are two taxes, transfer tax (ITP) and Plus Valia.
The property transfer tax for resale properties is 8% to 11,5% or IVA tax at 10% for new properties. The Notary and Land Registration fees are 0.5% to 1%
WHO PAYS WHAT?
It is normal practice for the buyer to pay the above fees and taxes with the exception of the “Plus Valia”, which has to be paid by the seller. The vendor will pay his own capital gains tax and also the estate agents fee.
Please note that the information provided is of general interest and to be considered as a guide only. Laws and tax rates are changing over time. There are no guarantees that this information is up-to-date. Please consult a tax specialist for the latest information.