As a foreigner, you can buy a property in Spain as a private entity, with partners, within a company in Spain or even from within a foreign country. The fact that several Spain-based companies work abroad has made the latter option very easy, allowing foreigners to buy properties from their own countries without having to travel to Spain for contract negotiations and other related activities.
If you are purchasing from abroad, in principle, it’s not a must for you to visit the property you want to buy before making a purchase, but it is highly recommended that you do so. Not only will it give you the opportunity to assess whether the property matches your needs, but it will also help you to avoid scams and pitfalls that are common in the real estate industry.
In this article, we will be taking a look at some of the most important steps and considerations for foreigners seeking to buy properties in Spain.
The NIE Number
All foreigners that want to buy a property in Spain must obtain an NIE (Número de Identificación de Extranjero). This fiscal identification number will be required to commence the buying process. You can get an NIE number in Spain at designated government offices or from a consulate in your home country. You can also consult property agents in Spain and/or real estate lawyers in case you need assistance in getting an NIE.
Other Legal Obligations
Besides the NIE number, there are other legal obligations that vary from one foreigner to another, depending on factors such as your marital status, country of origin, and how long you plan to live (stay) in Spain. For non-EU residents, you may need to prove that you have the financial means to live in Spain along with a good health insurance plan. In addition, you need to have a valid Visa for the duration of your stay in Spain.
As is often the case in most countries, your matrimonial regime, also known as wedding contracts or marriage status, plays an important role when buying property in Spain. Traditionally, there are two main categories of wedding contracts, namely: A Community of Assets and Separation of Assets. It is very crucial that you confirm your marriage status correctly in order to avoid any complications during asset valuation.
Pricing of the Property
Among other usual factors such as build size, plot size and quality of construction, the price of the property you want to buy in Spain will be greatly influenced by the property’s proximity to the coast or major cities. According to several surveys from various real estate experts and agencies in Spain, Valencia real estate, and more precisely, properties for sale in Benidorm and the Northern Costa Blanca, leads the country as the favorite region to buy properties, followed by Andalusia, Catalonia, and Madrid.
Investors are fortunate that the flexible Spanish real estate market and the wide variety of reasonably-priced housing offers in the coastal region means that foreign housing investors can find something to cater for pretty much any budget.
Funding your Purchase
If you have sufficient funds for making the desired purchase, then the property buying process should be straightforward once your source(s) of funding has been confirmed. On the flip side, the purchase process will most likely take more time if you need financial help, like a loan or a mortgage. Fortunately, laws in Spain allow foreigners to apply for real estate loans and mortgages. Several banks in Spain, including almost all major and popular banks such as Bankia, BBVA, Banco Sabadell, Banco Santander, Banco Popular, and CaixaBank, allow foreigners to access housing loans and mortgage services, provided they can submit the relevant paperwork.
Taxes and Fees
Unless stated otherwise in the contract, all expenses and taxes associated with buying property must be paid in Spain. The fees and taxes include:
Appraisal costs
Notary fees
Registration Fees
Real estate agent or agencies fees
Income Tax Non-Resident (IRNR)
How to Buy the Property
Assuming you have gone through the relevant procedures and have all the necessary documentation, the process of buying a property in Spain should be simple, thanks to the thousands of qualified real estate agents and agencies in the country.
Why Buy a Property in Spain as a Foreigner?
According to the latest statistics, the Brits (UK) have the largest number of expats investing in the Spanish real estate industry. This is followed by the Germans, French, Belgians, Dutch, Swiss and many other nationalities, including Danish, Russians, Moroccans, Swedes, and the Chinese. The reason for this diverse group of investors is that the Spanish real estate market has been very profitable over the recent years, hence attracting more and more foreign investors. To prove this, a 2018 report by El País reported that, in the first six months of 2018, there were 53,359 property purchases by foreigners in Spain, which marked the highest figure in the country since the first half of 2007, when about 33,000 properties were sold.
The Golden Visa
Furthermore, as a way of encouraging a homely and favorable environment for non-resident property investors, the Spanish government recently approved a law stating that any investor who buys a property in Spain exceeding 500,000 euros will have the opportunity to get a work permit along with a residence permit. The residence permit includes your spouse and children under 18 years, making the prospect of buying property in Spain as a foreigner even more worthwhile.
