What do I need to buy a property in Spain as a Foreigner?
When we talk about buying a house in Spain, whether buying a house in Madrid or buying a house in Barcelona or anywhere else, the English are the largest buyers of homes on Spanish soil, followed by the French, Germans, Russians and Italians, without forget about the increase in Chinese citizens arriving in our country. Whether you are looking for a property in the coastal areas or if you want to enjoy the diversity of the big cities (Barcelona, Madrid, Valencia, Galicia, etc.), the steps to follow are not always intuitive. In addition, it is necessary to be clear about what taxes and expenses will be involved in acquiring the home. All this and much more we explain below.
How to buy a house in Spain as a foreigner
The only essential requirement to buy a home in Spain is to obtain the NIE (Foreigner Identification Number). It is a personal and unique number, essential to carry out any transaction in the country, from opening a business to buying a property.
In the next article we will explain how and where to apply for the NIE, whether you are in Spain or in a foreign country. When the non-resident has the NIE, he will be able to start the procedures for the purchase of the house.
It is not compulsory to open a bank account in Spain but it will facilitate the payment of taxes and expenses.
The purchase of the home is made before a Notary and is registered in a public registry that is the Property Registry.
It must be borne in mind that before making the purchase before a Notary, it is very common to make a private sales commitment contract called "earnest money contract", where a part of the price is already paid, which is on account of the final price that is pays when the transmission of the property is carried out before a notary.
What taxes and expenses must be paid when purchasing a home in Spain?
The purchase of a home is subject to several taxes, which on average increase the price of the house substantially. Among them are:
The Value Added Tax (VAT), in the case of new homes or first transmission. Tax rate of 10%.
The Property Transfer Tax (ITP), in the case of second-hand residences or second transmission. The tax rate is between 6 and 10% depending on the Autonomous Community where the property is located. It must be paid if VAT is not applied in the transmission.
Tax on Documented Legal Acts (AJD). It must be paid if the house is purchased and VAT is applied and if it is purchased through a mortgage. (Let's go it's NEW WORK)
In addition, there are other expenses that must be taken into account:
Public deed in the notary. (€650 more or less)
Registration of the deed in the Land Registry. (350 - 300 € more or less)
If it is necessary to request a mortgage, the appraisal and the notary, the mortgage taxes and the registration of the deed at the Land Registry must be included.
During the year you will also have to pay other taxes, such as the Real Estate Tax (IBI), the Wealth Tax -if applicable-, the Personal Income Tax (IRPF) or, if you do not live in Spanish territory permanently, the Non-Resident Income Tax will have to be paid.
Tips for buying a home in Spain
To the extent possible, we recommend that you:
Visit the house personally before paying, that is, check first-hand the condition of the house, the surroundings, the transport routes that connect with the area, etc.
Find out who owns the house. You have to go to the Property Registry and check your legal and urban situation. Or better ask the agency you are going to work with, they know the owners of the houses.
Once purchased, register the home in the Property Registry to prove that you have absolute rights to the house that has been purchased in Spain.
If a deposit contract is made prior to the Notary, go to an expert to verify the content of the contract and its effects. The real estate agent who plows the Arras knows the laws and the points that are necessary.
Modified by: Oleh Haramita agent of Pastor Viviendas