Many foreigners are interested in buying property in Spain, as investing in Spanish real estate offers many opportunities. With its popularity as a holiday and retirement destination and its growing appeal to digital nomads and expats, Spain has become an attractive market for property investment. This guide will explore the possibilities for foreigners to buy property in Spain and the various avenues.
Can a foreigner buy property in Spain?
Foreigners looking to buy property in Spain will be pleased to know that it is possible to buy property in Spain. The Spanish government actively welcomes and supports foreign buyers, making the process relatively straightforward. If you plan to buy a holiday rental property, it’s advisable to seek legal assistance to navigate the bureaucratic aspects involved.
The initial step in buying property in Spain as a foreigner is obtaining an NIE (Número de Identificación de Extranjero), also known as the Foreigner’s Identification Number. This is a crucial financial identification required for fiscal activities in Spain. You can apply for the NIE personally or appoint someone with a Spanish power of attorney to handle the process on your behalf.
It’s worth noting that Spain offers one of Europe’s most successful Golden Visa Programs. This program grants residency in Spain to individuals who make a significant investment in real estate. To be eligible for the Golden Visa, you must buy a property valued at a minimum of €500.000 in Spain. Upon meeting the investment requirement, you can obtain a residency visa, which may eventually lead to citizenship if you fulfill the legal residency criteria for a minimum of ten years.
Property prices in Spain
If you’re considering buying property in Spain, it’s essential to understand the varying prices across different regions. Property prices can significantly differ depending on the location, with some areas commanding higher values than others. We’ve compiled a table below outlining the average real estate prices in various regions of Spain.
|City||Average price per m²|
|Alicante||€1.876 – €2.560|
|Bilbao||€3.028 – €4.678|
|Barcelona||€2.980 – €4.519|
|Madrid||€2.993 – €4.929|
|Malaga||€2.066 – €3.271|
|San Sebastian||€3.675 – €5.800|
|Valencia||€1.483 – €2.784|
Costs, fees, and taxes involved in buying real estate in Spain
When buying property in Spain, knowing the various costs is important. While there are no fixed fees for estate agents or lawyers, the good news is that these costs are negotiable. Additionally, specific fees can vary from region to region. As the buyer, you will be responsible for the majority of the costs, which typically include:
- Property Transfer Tax:
- The property transfer tax ranges from 6% to 10% of the purchase price for existing properties.
- The exact percentage depends on the specific region where the property is located.
- VAT or IVA:
- The Value Added Tax (VAT) or IVA is 10% of the purchase price when purchasing a new property.
- Notary costs, land registration fee, and Title Deed Tax:
- Notary costs, land registration fees, and title deed tax typically amount to 1% to 2.5% of the purchase price.
- These costs cover the services provided by the notary for overseeing the transaction and registering the property in your name.
- Legal fees:
- Legal fees, including VAT, generally range from 1% to 2% of the purchase price.
- It is advisable to engage the services of a qualified lawyer who will assist with the legal aspects of the purchase and provide guidance throughout the process.
The above percentages are provided as a general guide and may vary based on the specific circumstances and location of the property. To get a more accurate estimate of the costs involved in your property purchase, it is recommended to consult with professionals who can provide personalized advice based on your situation.
Golden Visa in Spain – What is it, and how to obtain a residency permit?
The Golden Visa program offers foreign property owners (from a non-EU country) in Portugal a residency permit. This permit allows non-EU citizens to live, work, study in Portugal, and travel freely across the Schengen area. After five years, the visa owner can apply for permanent residency or Portuguese citizenship.
Buying property in Spain in 6 easy steps
Buying property in Spain as a foreigner is a relatively straightforward process. To help you navigate the necessary steps, we’ve outlined the key considerations below:
Step 1: Obtain a Spanish Foreigner Identification Number (NIE)
Foreigners who want to buy real estate in Spain must first acquire a Foreigner’s Identification Number (NIE). You can obtain this number at any government finance office. Here you read more about getting a Número de Identificación de Extranjero.
Step 2: Finding the right property and making an offer
Begin your property search and engage with a real estate agent to find suitable options. Once you’ve identified a property of interest, submit your request through the seller’s agent. Prices are often negotiable, so aim for a fair deal that aligns with your budget.
Step 3: Negotiating and formalizing the agreement
Engage in negotiations with the seller to reach a mutually acceptable price. It’s advisable to have the agreed terms documented in writing by hiring a notary. This ensures clarity and legal protection for both parties involved.
Step 4: Paying the deposit and signing the preliminary contracts
Once an agreement is reached, the next step in buying property in Spain is paying a deposit, usually around 10% of the property’s value. Simultaneously, you will sign a preliminary contract (contrato privado de compraventa), solidifying the commitment between buyer and seller.
Step 5: Finalizing the purchase with a notary
To complete the property transaction, you will sign the final contract of sale (escritura de compraventa) in the presence of a notary. The notary ensures the legality and validity of the transaction, providing additional protection for both parties.
Step 6: Apply for Golden Visa (non-EU residents)
After buying property in Spain, non-EU residents can apply for residency through the Golden Visa program.
Avoiding pitfalls: A checklist for foreign property buyers in Spain
Foreign buyers must be cautious and take necessary precautions to ensure a smooth and secure property purchase in Spain. We’ve prepared a handy checklist to help you navigate the process and avoid potential scams or pitfalls:
- Verify the land registry (Registro de la Propriedad):
- Obtain information from the land registry office regarding the property you intend to purchase.
- Submit a request via email, phone, fax, or in-person to access the land registry information.
- Alternatively, seek assistance from a trusted attorney to obtain and review your registry details.
- Confirm planning permissions:
- Ensure that the property has obtained the necessary planning permissions and building permits.
- Request documentation or evidence that proves the property has been built in compliance with the applicable regulations and permissions.
- Check property debts:
- Verify if there are any outstanding debts associated with the property, such as unpaid taxes or community fees.
- Request documentation or statements from relevant authorities or property management to confirm the property’s financial status.
- Research and verify professionals:
- Thoroughly investigate the credentials and reputation of any lawyer or real estate agent you plan to work with.
- Seek recommendations, check online reviews, and verify their professional licenses and memberships in relevant associations.
- Engage a surveyor or architect:
- Hire a qualified surveyor or architect to inspect the property, assess its condition, and comply with building codes.
- They can identify any potential issues or indications of substandard construction.
Following this checklist can minimize the risks and ensure a secure property purchase in Spain. Remember, it is advisable to seek guidance from trusted professionals, such as attorneys and surveyors, who can provide expert advice and assistance throughout buying property in Spain.
Frequently Asked Questions (FAQs)
What is the property tax in Spain?
The property transfer tax in Spain is 6-10%.
Is it worth buying property in Spain?
Spain has become a highly appealing destination for foreign home buyers, offering many benefits and investment opportunities. Whether you intend to generate rental income or establish a personal residence, buying a property in Spain can be a wise and rewarding investment.
Can I get a visa for Spain if I own property?
Buying a property in Spain that meets the investment criteria of €500.000 or more on the deeds opens up exciting possibilities for foreign buyers. One such opportunity is applying for a 1-year investor visa, which grants you various advantages, including flexible residency and unrestricted travel within the Schengen area.