Many foreigners come to Spain attracted by the good weather, the gastronomy or the lifestyle and end up buying a property. In 2024, according to data from Registradores, almost 93,000 transactions were carried out by foreigners. This represents 14.6% of all property transactions. The most popular places to buy are:
– Andalusia, with 18.8% of all purchases by foreigners in Spain
– Catalonia, with 17.3%
– Balearic Islands, with 32.6%
– Canary Islands, with 27.2%
This data shows that there is strong interest from people in other countries in investing in property in Spain, and therefore, we must highlight the importance of knowing the requirements for buying a house in Spain as a foreigner.
These are the requirements for buying a house in Spain as a foreigner
There are several steps and conditions to follow, which we will break down below. The most important thing is that you do not need to live in Spain to buy property here.
The steps to follow and the requirements to meet are as follows:
Seek help from a professional real estate advisor
The assistance of real estate professionals will help you avoid unnecessary travel and speed up the process. You can look for an advisor in the area where you wish to buy, who knows the market and can help you choose the best property.
Check the financing requirements
If you need financing, you should know that there are banks in Spain that cater to clients from other countries to apply for a mortgage loan. In some cases, the application can be made online and you will receive a response in a short period of time.
Apply for a Foreigner Identification Number (NIE)
As a foreigner who purchases property in Spain, you must have a document that identifies you, which is the NIE. To obtain it, you will have to carry out the following procedures:
– Fill in the application form at a Spanish police station or at the Spanish embassy in your country. It is important to book your appointment in advance to be attended when needed.
– In the application, you must state the reason for requesting it, indicating that it is for the purchase of property in Spain.
– The NIE for non-residents does not entitle you to reside or work in Spain.
Your advisor can also carry out these procedures on your behalf.
Open a bank account in Spain
This is a requirement you must meet to buy property in Spain. This is because the taxes and costs related to the purchase must be paid through an account opened in Spain. You can open the account in different ways depending on your situation:
– Online if you reside in certain Western European countries.
– In person at a branch of a Spanish bank or via another person with power of attorney. In this case, an official translation and a certified colour copy of your ID or passport with the Hague Apostille are required.
– To open the account, you will need the following documents:
º Your passport or national identity document
º Your Tax Identification Number (TIN)
º Proof of your economic activity and income level
º Other documents depending on your country of origin
Check the condition of the property
In this regard, it is important to carry out two types of checks:
– A physical visit to the property to check its condition. It is advisable that this visit is carried out with a technician or architect who can check for structural problems or other defects that could affect the property.
– A legal check. In this regard, it is important that you gather information about the property and request:
º A simple note from the Property Registry. The simple note will help you know the ownership of the property, its characteristics, surface area, and whether there are any charges or not.
º Information from the homeowners’ association. In the case of a flat in a building or a house with shared elements with other owners and subject to the Horizontal Property Regime, it is important to request several documents:
-> The community statutes. These are the rules that govern this type of horizontal property.
-> The minutes of the community to find out if there are any approved special assessments.
-> A certificate from the community stating that the property you wish to buy is up to date with the payment of community fees and any approved special assessments.
º Tax information. You can request proof of payment for the last property tax (IBI) receipts to verify that they have been paid.
º Information about the owner if it is a commercial company. If the owner is a commercial company, you can request a simple note from the commercial registry to verify the company details and the authority of the person who will sign the sale agreement.
Sign the reservation contract
Before carrying out the sale before the Notary, it is quite common to sign a reservation contract. The reservation fee is an amount of money given to the seller as proof of the commitment to buy the house.
There are several types of reservation fees according to Spanish regulations, and the most common are penitential reservation fees regulated in the Spanish Civil Code. This type of reservation means that you pay a specified amount (for example, 5% of the purchase price), and if the sale is not signed due to a cause attributable to you, you lose the amount, and if the sale is not signed due to a cause attributable to the seller, they return the amount doubled.
Sign the sale agreement before the Notary
Within the period set in the reservation contract, the sale agreement will be signed before the Notary, where you will be handed the keys to the property.
On the other hand, you should remember that the sale generates a series of costs such as the following:
– Notary fees.
– Property Registrar fees.
– Fees for the administration handling tax payments and property registration procedures.
– If you apply for a mortgage, other costs may arise, such as the property valuation, for example.
Registration of the sale at the Property Registry and tax payment
The sale generates the need to pay a series of taxes that will depend on the circumstances.
If it is a first transmission of the property (i.e., purchased from the developer), you will have to pay Value Added Tax (VAT). If it is a second or subsequent transmission, you will have to pay the Property Transfer Tax (ITP).
On the other hand, it is important to consider other taxes such as the municipal capital gains tax, which is paid by the seller, or the Property Tax (IBI), which, although not related to the sale, must be paid by the owner as of January 1st each year.
In conclusion, this is a process that requires taking several precautions, and the help of an expert real estate advisor will help you carry out the procedures securely and quickly.
