Requirements for buying a house in Spain as a foreigner
In Spain, the price of housing in the capitals is much lower than in the rest of Europe, it can even be up to three times lower. That is why many foreign buyers decide to invest in housing in Spain. The economic effort for them is much less than for Spanish buyers.
In addition, the profitability of housing in Spain is currently around 6.5% according to data from the Bank of Spain, making it a very attractive investment. Needless to say, the location, the climate of the peninsula, its wide area of beaches and impressive nature and its excellent quality of life make Spain one of the favorite destinations to establish residence, acquire a vacation home or for real estate investment.
However, for foreigners who are not familiar with the process of buying a home in Spain, it may seem like a slow and tedious process. Taxes, expenses, paperwork… There are many aspects that you must take into account in a home buying process. That is why today we bring you all the steps and requirements that you should know if you are thinking of investing in housing in Spain.
Can a foreign buy a house in Spain?
The data says it: Spain is the most chosen European destination to invest in housing, not only for Spaniards, but especially for international buyers. So, although at first it seems like a complex procedure, yes, a foreigner can buy a house in Spain without any impediment. Now, it is necessary to know step by step and study the Spanish real estate market in depth before launching into the investment.
The first thing you should know is that it is not necessary to have a bank account in Spain to be able to invest in a house, although it will greatly simplify the process of paying taxes and other extra costs. The purchase must be made before a notary public and registered in the Land Registry. The price of this registration will depend on the value of the home and its location, although it usually ranges between 600 and 1,000 euros.
In which register should I register my property? Spain is divided into districts, or what is the same, mortgage districts. There is a Property Registry for each district. On the Registrars of Spain page you can consult more information about this procedure and find out which mortgage district corresponds to you.
One of the heaviest but most important parts when buying a home in Spain as a foreigner is paying taxes. Real estate investment in Spain is subject to the following taxes:
- VAT (Value Added Tax): for new or first transmission homes, 10% is paid throughout the Spanish territory, except in the Canary Islands, where 6.5% of the Canary Indirect General Tax is paid.
- The ITP (Patrimonial Transmission Tax): is the tax paid for second-hand or second-transmission homes. It is taxed between 6 and 10% depending on the Autonomous Community where the residence is located.
- Throughout the year you also have to pay other taxes such as the IBI (Real Estate Tax), the Wealth Tax (in some cases), and if you do not reside in Spain on a regular basis, you have to pay the Property Tax. Non-Resident Income.
Apart from taxes, there are other expenses that must be taken into account when buying a home:
- Public deed and other notary expenses.
- Registration of the property in the Land Registry.
- In case of requesting a mortgage, you must take into account the associated expenses, such as the appraisal before a notary or the interest on the loan.
Requirements to buy a house as a foreign
We already know the steps we must follow to acquire a home in Spain, but what requirements must be met? We explain it to you below.
Whether you are a buyer from a country of the European Union or from outside, in Spain you will not find restrictions for real estate investment. Of course, the essential requirement to be able, as a foreigner, to buy a house in Spain, is to have a Foreigner Identity Number (NIE), which will be the way to identify yourself as a buyer in the home purchase contract and to pay appropriate taxes and expenses. To apply for the NIE, you just have to go to a police station in Spain or the Spanish embassy in your country and present the EX-15 form duly completed and signed.
A bonus: opening a bank account in Spain, as we have already seen, is not an essential requirement, but we anticipate that it can make things much easier when it comes to paying taxes and other expenses associated with buying a home.
Tips to buy a new home
Finally, we bring you a few tips to buy a new home if you are a foreigner that we recommend you follow in this situation:
- See (either in person or by videoconference) the home before making any payment. It is important to check that everything corresponds to what we are buying.
- Go in person or through a proxy (a lawyer) to the Property Registry to check all the documents and the legal status of the home to avoid scams.
- Use the services of a real estate agency. Especially if you buy from outside Spain, having an agent who knows the market perfectly, all the paperwork and requirements necessary to buy a house will give you peace of mind and security.
We are knowledgeable experts in all aspects of the real estate sector with 30 years of sales experience