Spain, officially the Kingdom of Spain, is a vibrant country in southwestern Europe on the Iberian Peninsula. It borders Portugal to the west, France and the Mediterranean Sea to the south and east, and Andorra to the northeast. Madrid is its capital, a hub of Spanish culture, history, and political life.
Spanish culture is renowned worldwide, especially its contributions to art, music, and dance, like flamenco, as well as its culinary delights, such as tapas, paella, and wines from La Rioja. Spain is also passionate about sports, especially soccer, with clubs like Real Madrid and FC Barcelona achieving international acclaim.
Can a foreigner buy property in Spain?
Yes, foreigners can buy property in Spain, which is straightforward. Spain has no restrictions on foreign real estate ownership, whether for residential, commercial, or investment purposes. Here’s a tailored overview of the process and considerations for foreign purchasers:
Legal Process and Documentation
- NIE (Número de Identidad de Extranjero): All foreign buyers need an NIE, an identification number for foreigners. It’s mandatory for all legal and financial transactions, including property purchases. You can apply for an NIE at a Spanish consulate in your home country or Spain.
- Choose a Notary: Notaries play an essential role in property transactions in Spain. They draft and validate the deeds, ensure legality, and register the sale with the local land registry.
- Hire a Lawyer: Although it’s not mandatory, hiring a lawyer (preferably one who specializes in real estate law and is fluent in your language) is highly recommended. They can act due diligence on the property, check for debts, and ensure the legality of the transaction.
Financing Options
- Cash Payment or Mortgage: Foreign buyers can purchase property in cash or by obtaining a mortgage. Spanish banks generally offer mortgages to non-residents, but they often require a larger down payment (usually around 30–40% of the property price) than they would for residents.
- Proof of Financial Solvency: Spanish banks basically require proof of income, employment details, tax returns, and a credit report from your home country if you’re applying for a mortgage.
Taxes and Fees
- Property Transfer Tax (ITP): For resale properties, buyers pay a transfer tax, which varies by region but generally ranges between 6-10% of the purchase price.
- VAT (IVA) and Stamp Duty (AJD): Buyers pay VAT (usually 10%) and stamp duty (around 1.5%) on new properties.
- Notary and Land Registry Fees: These can range from 1–2% of the purchase price.
- Legal Fees: Legal fees usually range from 1-2% of the purchase price if you hire a lawyer.
- Ongoing Property Taxes: Annual property taxes include the Impuesto sobre Bienes Inmuebles (IBI), which varies by municipality and is typically 0.4-1.1% of the property’s cadastral value.
Due Diligence and Property Check
- Land Registry Check: The lawyer should verify that the seller is the legal owner, check for any outstanding debts, and confirm that the property meets all local regulations.
- Community Costs: For properties in shared buildings or communities, you must confirm the monthly or annual community fees covering shared maintenance expenses.
The Purchase Process
- Reservation Agreement: The buyer often signs a reservation agreement and pays a tiny deposit to reserve the property and remove it from the market.
- Private Purchase Contract: Following due diligence, a 10% deposit is typically paid and a contract is signed. Terms like the purchase price, payment schedule, and completion date are included in this contract.
- Final Deed and Payment: The buyer and seller meet at the notary’s office to sign the final deed on the prearranged day. The buyer transfers ownership of the property and makes the final payment.
Golden Visa Program
- Spain’s Golden Visa program allows non-EU citizens to get residency by investing at least EUR 500,000 in Spanish real estate. This visa grants residency and allows the buyer and their immediate family to live and work in Spain. While it doesn’t provide citizenship directly, it can lead to permanent residency and, eventually, citizenship if certain requirements are met.
Additional Considerations
- Capital Gains Tax: If you trade the property later, you may need to pay capital gains tax on the profit, which is 19% for EU residents and 24% for non-EU residents.
- Inheritance and Wealth Taxes: Spain has both an inheritance tax and a wealth tax, although these vary by region and personal circumstances. Some regions exempt foreign residents or offer reduced rates.
- Rental Income: If you plan to rent out your property, you must register as a non-resident taxpayer and pay income tax on rental income. The tax rate on rental income is 19% for EU/EEA citizens and 24% for others, though certain deductions are allowed for EU citizens.
Property Management and Maintenance
If you plan to rent or only occasionally use the property, hiring a property management company can handle tenant management, maintenance, and cleaning. These services typically cost between 5-10% of the rental income.
Buying property in Spain is a famous option due to its appeailing property laws for foreigners, vibrant lifestyle, and moderate cost of living. With a solid understanding of the process and requirements, foreign buyers can confidently purchase in Spain’s vibrant real estate market.
Frequently Asked Questions
Which language is spoken in Spain?
The main language in Spain is Spanish (Castilian). Additionally, several regional languages are co-official in their respective regions: Catalan (in Catalonia, the Balearic Islands, and Valencia, where it’s called Valencian), Galician (in Galicia), and Basque (in the Basque Country and parts of Navarre).
How is the weather in Spain?
Spain has a diverse Mediterranean climate dominating the coastal areas, featuring hot, dry summers and mild, wet winters. The interior regions experience a continental weather with cold winters and hot summers, while the northern areas have an oceanic climate with cooler temperatures and more rainfall. Southeastern parts are semi-arid, and mountainous regions like the Pyrenees have colder, snowy conditions in winter. Spain enjoys plenty of sunshine, making it a popular tourist destination year-round.
Can you get citizenship in Spain by buying a property?
You can obtain residency in Spain through property investment by participating in the Golden Visa program. This program allows non-EU citizens to acquire residency by investing at least EUR 500,000 in real estate. While this visa grants you and your immediate family the right to live and work in Spain, it does not automatically lead to citizenship.
After holding the Golden Visa for a certain period (typically 5 years), you may be eligible to apply for permanent residency, and after ten years of legal residence in Spain, you can apply for Spanish citizenship, provided you meet certain requirements, like demonstrating knowledge of the Spanish language and culture.
How long can foreigners stay in Spain if they own property?
If foreigners own property in Spain but are not residents, they can stay without a visa for up to 90 days within a 180-day period, following Schengen Area regulations.
However, if they obtain a Golden Visa by investing at least EUR 500,000 in real estate, they can live in Spain indefinitely as residents, provided they maintain the property and meet renewal requirements, which typically involve spending at least one day in Spain each year.
