How to buy property in Spain as a foreigner in 2024?
What’s on this page?
- Research and planning
- How to buy property in Spain – step-by-step instructions
- Financing the purchase
- An important step is choosing a property
- From negotiations to signing a contract
- After the purchase home
Modern people are quite mobile, and if there is an opportunity to improve the quality of their life and the life of their family, then why not do it. Having visited Spain and fallen in love with this beautiful country, residents from different parts of the world wish to move here for permanent residence. Some people may be satisfied with living in a rented apartment, and there is nothing wrong with that. However, for many people, feeling confident means purchasing their own home. Let us find out how to buy property in Spain in the shortest possible time and without any problems.
The Spanish real estate market has been developing quite steadily in recent years, although it has undergone certain difficulties due to the pandemic and the rapidly changing political and economic situation in Europe and the world. Today it is a platform with an ever-growing demand for different types of real estate, not only among Spanish citizens, but also among many foreigners - mostly residents of the European and American continents.
According to statistics, more than 90,000 houses were purchased in Spain in 2022, representing about 14% of all annual sales and exceeding the number of sales in the pre-pandemic year. If in previous years buyers gave preference to secondary market properties due to their low prices, then, starting in 2019, the trend of purchasing housing in new buildings has strengthened. This is due to the high quality of construction and a large number of modern amenities. Thus, the number of sales of new homes in 2022 increased by 2.6% compared to 2021.
In 2022, foreigners purchased 20% more properties in different regions of Spain compared to 2021, and today this represents about 9% of all Spanish real estate transactions. Properties located on the coasts were of greatest interest to foreign citizens: in Alicante, Malaga, and the Balearic Islands while of less interest were apartments and houses in Madrid and Barcelona: their sales accounted for only 2% of all real estate sales to foreigners.
The most active buyers were citizens of Germany, France and Great Britain. The most frequent queries on the Internet in the 4th quarter of 2022 were: How to buy a house in Spain fromф UK.
The main reasons for foreigners to move to Spain are the following:
- favorable climate;
- proximity to sea coasts;
- relatively low cost of living compared to other European countries;
- the opportunity to invest capital with guaranteed income;
- rich historical and cultural heritage.
A good incentive for foreigners to purchase expensive real estate is the possibility of obtaining a Golden Visa, which gives the right to a residence permit with the subsequent right to obtain citizenship after 10 years of residence in Spain. The Golden Visa also provides many other benefits, such as:
- residence permit and the ability to leave and enter the country at any convenient time;
- employment opportunity;
- access to European healthcare and education;
- obtaining a residence permit by members of the investor's family.
When answering the question of how to buy property in Spain as a foreigner, special attention should be paid to researching the real estate market and planning the stages of the purchase. An important circumstance is the choice of a source of information about the sale of real estate, since there are a great many such sources and not all can be fully trusted. First of all, you need to decide on the location of your future home, because Spain is a large country, and life in a large city is extremely different from life on the sea coast or in a village.
The type of housing chosen, area, and time of construction are also of great importance. Much depends on the budget you have. Real estate prices in regions with high demand for housing can be several times higher than prices for apartments and houses in the outback. Obtaining a mortgage loan can be a serious help in financial matters. It should also be taken into account that when purchasing Spanish real estate, you will need to pay a number of taxes and fees, as well as allocate funds for the subsequent maintenance of housing in accordance with the law.
Having selected a suitable property, you need to do the following:
1. The first mandatory step is to obtain a foreigner identification number NIE (Número de Identificación de Extranjero). This number allows a non-resident to carry out any transactions in Spain, including the purchase of real estate.
2. Opening an account in a Spanish bank is not mandatory, but it will significantly simplify all financial transactions related to the purchase and maintenance of real estate, including subsequent payment of utility bills.
3. Reserving of the selected property for a certain period. To do this, you need to conclude a reservation agreement with the seller, who is obligated not to sell the property to a third party during this period. The contract must indicate the condition of the property, its cost, terms of payment, and the amount of the deposit, which is usually 10% of the price. In the future, the deposit will be taken into account when paying the cost of the property. You also need to indicate the conditions for terminating the transaction. If the transaction is terminated due to the fault of the buyer, the deposit is not returned.
4. An important step when purchasing real estate is to thoroughly check the selected property to prevent various types of fraud. To do this, it is advisable to seek the services of a reputable lawyer with good knowledge of your language. A lawyer will help you confirm who the owner of the selected property is and whether there are any outstanding debts. You also need to clearly understand what additional costs you will incur in connection with the purchase. Sometimes this figure can reach up to 20% of the property price.
If necessary, a lawyer will also help you understand the intricacies of mortgage loan and draw up a legally correct purchase and sale agreement.
5. Final payment for the purchased property.
6. Signing the purchase and sale agreement.
7. Obtaining ownership of a newly acquired property.
The best option for purchasing real estate is to have a sufficient amount of your own funds. But often, out of ignorance or due to extra caution, buyers do not choose the property they like due to lack of sufficient funds, not trusting the mortgage. A Spanish mortgage loan today is a great opportunity to buy the desired property, paying 30-45% of its cost. The rest of the amount will be provided to you as a loan:
|For what percentage of the property's value is a mortgage loan issued?
|up to 70%
|For how long is a mortgage loan issued?
|up to 40 years
As you can see, mortgage lending conditions differ for residents and non-residents of Spain.
A foreigner can get a mortgage loan from a bank, credit organization, or mortgage brokers. An important condition for obtaining a mortgage is having a NIE and a Spanish bank account. The following documents will also be required:
- confirmation of your financial status - employment document or other information about income;
- agreement on reservation of the property of purchase;
- if available, documents confirming that you have other debt obligations;
- confirmation of payment of property taxes and other required payments.
The costs of obtaining a mortgage loan include the following:
|mortgage processing fee
|1% of the loan amount
|1.5% of the loan amount
|according to the insurance contract
|commission in case of refinancing (repurchase of a mortgage from the seller)
|0.5% of the loan amount
There are also other costs:
- notary fee;
- property valuation;
- registration in the land cadastre.
When purchasing a home, you should be aware of currency fluctuations, which may affect prices. But at the same time, slight inflation always has a positive effect on any market, including the real estate market, since buyers’ inflationary expectations speed up their purchasing decisions.
In a certain sense, this stage is the key stage in the entire transaction, since the right choice guarantees the buyer’s entire subsequent well-being. You cannot make a mistake here and you need to choose a reliable source of information. If you trust only online resources, then you should pay attention to the reputation of real estate websites and customer reviews.
Once you have decided on a property, find an opportunity to take a closer look at it. The best thing is to go to Spain for a short time, and to carefully inspect the chosen property on the spot and with a real estate agent from the company whose website you have studied. The agent must know your native language and draw your attention to the features of the property, the quality of its construction, and the availability of additional amenities. You should also be familiarized with the legal and financial aspects of the transaction on the spot, which will eliminate the possibility of any unforeseen circumstances.
Today, the Spanish real estate market provides foreign citizens with the opportunity to purchase properties in accordance with any requirements and financial capabilities. Among the most popular are the following types of properties:
|housing located in apartment buildings with a different set of amenities and a wide range of prices
|apartments located on the upper floors of apartment buildings. They belong to the premium class. Availability of a large number of modern amenities
|combine the characteristics of apartments and independent living conditions. Located in blocks of similar buildings. Have more spacious living quarters compared to apartments, small plot of land, common spaces with neighbors
|Individual houses, smaller compared to villas, with all the characteristics of your own home
|spacious mansions with a wide range of amenities and high quality construction
If you are wondering how to buy a house in Spain, then you should know that the process of buying a house is no different from buying any other type of real estate.
When deciding on the location of a property, you should visit different regions of the country and decide what you like best: a large city with great opportunities and an active lifestyle, a resort on the coast with a healing climate and the possibility of organizing high-quality recreation, or a calm, measured life in a small town with old traditions and clean environment.
Selling Spanish property to foreigners is not something exceptional today. Relevant legislation facilitates this kind of transactions, and friendly Spaniards in no way interfere with the possibility of citizens of other countries living in neighboring apartments or houses. Therefore, as a rule, no difficulties arise when negotiating with a real estate seller about a purchase. The main thing here is that the buyer clearly understands the terms of the transaction. And for this you need sufficient knowledge of the language and Spanish legislation.
Few foreigners can boast of sufficient competence in these matters. After all, when negotiating, counter-offers from the seller are possible, and in order to achieve mutual understanding, you need to be fully informed. Therefore, once again, we strongly recommend that you immediately contact an experienced lawyer who will ensure that you go through all stages of the transaction in a qualified manner.
And finally, you have chosen your home, paid a deposit, entered into a preliminary booking agreement, and a lawyer has conducted due diligence. Now you can make full payment of the cost of the property. It should be noted here that remote purchase of real estate in Spain is not possible, and if you cannot be present at the transaction, then a trusted person can complete the transaction on your behalf. This can usually be the same lawyer with whom you worked in the first stages of the purchase.
At the final stages of the purchase, the parties discuss the final issues of payment and the terms of the purchase and sale agreement, which is signed in the presence of a notary. It is important here to indicate what taxes and fees you will have to pay when purchasing real estate. Spanish legislation stipulates the payment of taxes by all non-residents who have purchased real estate, regardless of whether the buyer himself will live in the purchased apartments or rent them out. Such taxes include:
- IRNR – income tax for non-residents;
- IBI – property tax;
- IP – wealth tax (in some cases).
In addition, you will need to make the following payments:
- obtaining a mortgage loan (if necessary);
- real estate agency fee;
- cost of legal services, etc.
The income tax for a non-resident who rents out his property is 24% of rental income, the real estate tax is 0.4-1.1% of the cadastral value and depends on the location of the property, the wealth tax is levied on owners of real estate worth more than € 700,000. The total cost, in addition to paying the price of the property, is 10-20% of its cadastral value.
To finalize the transaction, you need to formalize the transfer of ownership, while paying the appropriate tax in the amount of 6-11% of the cadastral value of the property.
After receiving ownership of your newly purchased home, you need to ensure its proper maintenance. First of all, this is payment for utilities and public services. In Spain, thanks to the warm climate, utility bills are slightly lower compared to other European countries. For example, for an apartment of 90 sq. m you will pay:
|Payment amount, €/month
|internet, television, telephone
|21 (twice a year)
If you purchased an apartment in a residential complex with a swimming pool, then cleaning the area and maintaining the pool will cost € 10-160, depending on the location, area, etc.
In conclusion, it should be said that buying real estate is always good: new conditions, new opportunities and a lot of positive emotions. In order for everything planned to come true as quickly as possible, you need to strictly follow the advice of professionals. Among the employees of the WTG Spain group of companies there is always an experienced manager who is ready to use his experience and knowledge to help you realize your cherished dream.