If you’re considering buying a house in Spain, you’re making a smart decision.
Spain is quite a guarantor, making it an attractive destination for real estate investment.
The best part is that it does not impose significant restrictions on foreigners who wish to acquire property or land, whether they come from Eurozone countries or other parts of the world.
Buying a house in Spain as a foreigner
The first step to buying a house in Spain as a foreigner is to obtain a NIE (foreigners’ identity number). This number will identify you in all transactions related to the purchase of your property, including the corresponding tax procedures.
To obtain the NIE, you can go to a police station in Spain or apply for it at the Consular Office of your place of residence using the EX-15 form.
Process of buying a house in Spain
The process of buying a home in Spain can be summed up in these key steps:
1. Local Currency Bank Account
You must have a bank account in local Spanish currency to facilitate financial transactions related to the purchase of the property.
2. Deposit and Funds Required
Pay the amount required for the purchase into the account, allowing for a possible additional 12% to cover extra costs such as taxes and possible renovations.
If you are in Spain, visit the property in person. If you’re on the go, consider giving a purchase mandate to a trusted person with real estate experience.
3. Negotiate the price
It is crucial. Make sure you get the best deal possible.
You can negotiate more than a 5% discount on assets in Idealista, more than 20% if they are bank debt assets in the final phase, and up to 50% if they are assets with legal problems or in the early stages of bank debt processes.
4. Verification of ownership
Perform a thorough check to ensure that the property belongs to the seller and meets the legal requirements, including the certificate of occupancy.
Make sure that the actual meters of it do not have legal charges, outstanding mortgages or pending administrative burdens, court litigation, or other issues that may increase the total cost of the purchase, such as the state of the downspouts, wells, and roofs and the state of the technical inspection (ITE) of the building.
5. Earnest Money Contract
Sign an earnest money contract, usually paying 10% of the final price as a deposit to reserve the property.
This contract is usually considered a penal deposit, which means that if one of the parties does not comply with the contract, they will lose the deposit.
6. Formalization of the purchase
The purchase is formalized before a notary, where the rest of the amount is paid.
7. Post-purchase procedures
After the purchase, several formalities must be completed, including registering the property in your name and paying administrative fees.
8. Taxes and Expenses
When buying a house in Spain, you should take into account taxes and expenses such as transfer tax (ITP), notary fees, value-added tax (VAT), registration fees, and stamp duty (IAJD).
The exact amount will vary depending on the location and type of property. The fees are usually paid by the buyer.
- Property Transfer Tax (ITP): from 6 to 10%, depends on each Autonomous Community (it is only paid when purchasing a second-hand home)
- Notary fees: 0.03 to 0.45%
- Value Added Tax (VAT): 10% of the value of the property that only applies if you buy a new house
- Registration fees: 0.02 to 0.18%
- Tax on Documented Legal Acts (IAJD): between 0.5 and 1.5%
Advantage of the residence visa or Golden Visa
Golden Visa is a facility introduced by the Spanish government to attract qualified people with high incomes interested in real estate investment.
The required investment starts at €500,000.
It is important to consider the legal part, for this Marcos, partner of the international law firm ECIJA, can help you with the entire legal process, incorporation of companies, etc. It has a presence throughout Latin America.
Visit our page for investors interested in Golden Visa and interested in investing in Madrid.
Buy a house in Spain with professional help
We always recommend people we trust, people with whom we have bought and sold homes or carried out a small promotion and people who have helped us.
In this sense we recommend:
Leon Taurel (Alimbles, SL) engineer, personal shopper, reformer and decorator. An all-in-one.
He works for families, mainly from Miami and Latin America. Has specialized in carrying out the entire cycle, delivering the turnkey asset, all finished and ready to be put into operation. He goes and reviews all the documentation for the notarial signature, preparing the act.
DFLAT is one of the partners and directors of a real estate agency located near the Plaza del Marques de Salamanca, dedicated to serving investors with high-end assets, small buildings, and premises.
It is organized by managers by area of interest. It has a team of architects for the transformation or reform of assets and focuses on Spanish investors.
Alimbles (Leon Taurel) is hired by companies and families from Latin America and has an engineering background, and has architects on his team. He makes purchases on behalf of third parties because of the trust he gives.
Normally we recommend buying houses to renovate as the best way to increase revaluation and profitability while obtaining a finish without problems in the long term.
More information for investors in Madrid in Real Estate
If you are interested in buying a house in Madrid, we will be able to help you, more easily.
Before buying a house in Madrid, it is essential to know real estate investment in Madrid.
On the other hand, if you are looking for a property management company in Madrid, do not hesitate to contact us.
DFLAT Madrid is an option to manage your rental property in Madrid. With 20 years of experience and the management of 400 investor homes.
