FAQ - Buying Property In Spain

There are very few restrictions on buying property in Spain. Any investor, overseas or resident can purchase property. If however you are a non-resident you must obtain a government registration number known as an NIE or numero de identidad de extranjero. Your solicitor can apply for this for you or you can make an application to the Spanish consulate. Once you have obtained a NIE you are free to sign any necessary financial documents.

EU Citizens can stay in Spain for up to 90 days. If however you are a non-resident, intending to stay for a period beyond 3 months you must obtain a residence visa, residence permit or 90 day extension, permanencia.

As with any investment, financing will depend on your own personal circumstances. Perhaps you will have a lump sum that you wish to invest, you may wish to re-mortgage a current property in order to raise capital or you may wish to obtain a mortgage in Spain. In general if you opt to apply for a Spanish mortgage you will be allowed to borrow 80% of the property value. This of course is dependent on age, health and financial circumstances. Due to the large number of overseas investors there is a wide range of mortgage products available on the market directly through the banks or through mortgage brokers. The offerings tend to be more competitive, offering significant savings, however it is always advisable to seek expert independent advice.

1. The Purchase Cost
2. Fee and taxes - Buyers should allow 10% of the purchase price for fees as follows: Transfer tax: 7%
   Legal fees: 1%
   Notary fees: 1%
   Property registry fees: 1%
3. VAT: On new residential buildings there is VAT - IVA - charged at 7% of the value, plus 1% stamp duty, and these are paid by the purchaser On re-sales, there is a property transfer tax set at 7%.
4. Other expenses include annual property tax, refuse collection tax and community fees.

As Property Law is specific to a country we do recommend that your purchase be managed by an independent legal firm within Spain. We are happy to recommend a reputable and established firm to you. We have already completed title checks and background checks on the developer before we represent any property for sale. It is always advisable to seek an independent qualified translator to assist you in your purchase.

Purchasing property in Spain is a very straight-forward process. As mentioned in order to purchase a property you will require a NIE, numero de identidad de extranjero.

In Spain, once your offer has been accepted by the vendor, you have entered into a legally binding agreement. Your solicitor will make a formal offer in writing at this time and run all necessary checks on the property. Once all details have been confirmed and your solicitor is satisfied with all searches, contracts will be drawn up. A deposit is payable and terms are agreed. At this stage your solicitor prepares title deeds, which are signed by both parties in the presence of the notary. On completion the notary forwards the details of the deeds to the local land registry and the Escritura or deeds will be returned to you once they have been processed.

If you are purchasing a new property there is generally a standard guideline used by many developers in Spain. This involves an initial booking deposit, followed by a payment of 25% of the purchase price. This is generally followed by a 2nd interim payment with the balance due upon completion.

On resale properties a deposit and advance of approximately 10% of purchase price is due upon agreement with the balance payable upon signing of contracts. Payment terms can vary depending on the vendor’s personal requirements.

No. For all EU citizens a valid passport is sufficient for entry into Spain for a period of up to 90 days.

The rental market in Spain remains strong with excellent tourism numbers and year round visitors. We do not offer rental guarantees as it is simply not possible and would advise that anybody that is offering them is adding to the cost of your purchase price! We would expect that with the quality of our locations we should at least recover your finance costs through rentals, however there are no guarantees!

The main reason for this investment is the growth in the value of your property and not the rental income, which is an added bonus.

Capital gains tax is applicable is your sell your property once you have owed it for longer that a 1 year period. This tax is calculated on the difference between the selling price and the purchase price with an allowance of inflationary gain taken into consideration. The current rate of Capital gains tax for non residents is 35%. If you are considering another investment property the Spanish authorities will allow you the option of investing the tax into another property so long as it is a single main residence and that it is purchased within a period of two years of selling your initial property. If you own the property for more than 10 year you are not liable for Capital Gain tax.

In addition to Capital Gains, Spain imposes a Wealth Tax which is payable by both residents and non-residents alike, although the conditions vary. Non residents are liable for all assets owned within Spain and returns must be made on an annual basis.