The procedure for purchasing real estate in Spain in 2021

The procedure for purchasing real estate in Spain in 2021

When buying real estate in Spain, you need to know information about the procedure and conditions for purchasing a house. We will tell you how to buy real estate in Spain in this article. Many foreigners want to buy property in Spain in order to live in a country with an excellent climate and gastronomy, impressive beaches and mountain landscapes. However, in each country, the process of buying a house has its own characteristics.

CONTENT

COST OF REAL ESTATE IN SPAIN

The cost can vary greatly depending on the area of Spain. The average price of Spanish housing is about 1 886 euros per square meter.

In large cities such as Madrid and Barcelona, and in tourist areas, housing prices are much higher. Thus, on average, a square meter in Madrid costs 3 122 € / m², in Barcelona – 3 077 € / m², in Seville – 1 588 € / m², in Valencia – 1 435 € / m², in Toledo - 963 € / m². The cheapest cities in Spain to buy a house are usually located in the hinterland. The three cities with the lowest prices per square meter (about 550 € / m2) are Albox, Calasparra and Benavente.

REAL ESTATE AGENCIES IN SPAIN

Now you can independently search and buy real estate in Spain in any city using the Internet and choose the appropriate options that the real estate market offers. However, a good way to start looking for housing in Spain is to contact verified real estate agencies.

REQUIREMENTS FOR REAL ESTATE PURCHASE IN SPAIN FOR FOREIGNERS AND CITIZENS OF RUSSIA

There are no restrictions for EU citizens or those living outside it when buying a house in Spain by foreigners.

The only requirement for the procedure of buying real estate in Spain that must be met is to request a NIE (Foreigner Identification Number). The peculiarities when buying real estate in Spain by foreigners boil down to the presence of a NIE, which will serve to confirm the identity of the buyer when signing sales contract and paying applicable taxes. Using this document, you can perform such simple and basic procedures as opening a bank account, buying a house, a car or any product. It is possible to apply on the EX-15 form for a NIE at the local police station or at the Spanish embassy of any country.

DOCUMENTS REQUIRED TO BUY REAL ESTATE IN SPAIN

The procedure for buying real estate in Spain requires the presence of the following documents:

  • energy efficiency certificate;
  • notarial deed;
  • contract of sale;
  • information from the state cadastre of real estate;
  • real estate tax (IBI);
  • value added tax;
  • Nota Simple (official extract from the Property Register of Spain), confirming the ownership of real estate;
  • lease contract.

RECOMMENDATIONS FOR A SAFE SPANISH REAL ESTATE INVESTMENT

Many are wondering how to become an owner of Spanish real estate and conduct a safe transaction. Here are some tips:

If the property or housing belongs to a private person, it is necessary to check:

  • identification number of real estate register and registered property to identify the owners of the property and check that everything is in order;
  • whether there are debts for the property (bought on a mortgage or pledge, payment of utilities);
  • Nota Simple at the land registry office, confirming the ownership of the property;
  • making payments to IBI at the city hall (real estate taxes) or garbage collection;
  • availability of a compulsory energy certificate.

If real estate belongs to developer:

  • It is necessary and important to check the project approval status, building license, housing registration and certificate of premises conformity with the requirements for habitability.
  • It is recommended that certain aspects are checked on site, such as insurance against hidden defects, the presence of cooperatives, and more.

It is important with shared construction:

  • city council approval, building license, building eligibility certificate;
  • entering the building into the real estate register;
  • certificate from the Spanish register of commercial organizations.

You also need to check:

  • general plans of the building in which the purchased apartment is located, infrastructure;
  • current price, which includes the total price with VAT, other payments related to the sale of real estate.

PURCHASE PAYMENT

How to buy real estate in Spain and which payment method to choose are the most interesting questions for investors.

Spanish banks offer loans to foreigners who do not live in the country, in addition, mortgage loans are specially reserved for them. Payments, both for the property you are buying and for administrative expenses, must generally be in euros. Many buyers, small or medium-sized investors, make payments directly to the seller and quickly complete the purchase of real estate for cash. In such cases, Law 7/2012 of October 29 limits the amount for transactions in Spain. For those who are not tax residents, this amount is 15 000 €. Thus, if the money comes from abroad, you will have to make an international bank transfer. A very high commission will be charged for making a transfer from a foreign bank. It is important to choose a reliable and convenient bank that is most suitable for making a purchase.

The buyer must pay all costs for the sale and purchase of real estate in Spain:

  • contacting the Services Bureau in case of a mortgage request;
  • payment of taxes;
  • drafting a notarial deed;
  • payment of value added tax

PROCEDURE FOR REGISTRATION OF REAL ESTATE IN SPAIN

You need to know how to profitably buy a house in Spain and correctly in order for the transaction to bring the greatest benefit. At the same time, the stages of buying real estate in Spain include release and preparation of the necessary documents and the following steps

  1. Choose a property, in some cases you can sign a deposit agreement and pay a percentage of the final price. This is an agreement by which both parties undertake to complete the purchase and sale as soon as possible. The usual amount of a deposit is 10% of the property price.
  2. Make sure that the property belongs to the seller and that it is free of administrative burdens or mortgages using the Land Registry.
  3. Open a Spanish bank account. It is very good to have a bank account in the local currency of Spain to pay for your house and purchase expenses.
  4. Choose a local lawyer for advice.
  5. Get your NIE.
  6. Sign the sales contract and pay the remaining amount.
  7. Register the property in your name and pay related administrative costs.
  8. Draft an act in the Land Register, make changes to the data on ownership and lease.
  9. Pay taxes and expenses associated with the purchase. Typically, costs will vary depending on transaction price. They usually reach between 10% and 13% of the purchase price. If the transaction is carried out through a real estate agent, the buyer will be responsible for the transaction.
  10. Pay annual taxes for Spanish property owners.

These stages of the real estate purchase procedure will help you structure the process of purchasing a home.

LIST OF EXPENSES YOU HAVE TO FACE

The buyer inevitably faces the following costs:

  • Property Transfer Tax (ITP): 6 to 10%, depending on each Autonomous Community. It is paid only when purchasing a secondary housing.
  • Value Added Tax (VAT): 10% of the property price. It is applied only when buying primary housing.
  • Tax on Documented Legal Acts (IAJD): 0.5% to 1.5%.
  • Notary fees: from 0.03 to 0.45%.
  • Registration fees: from 0.02 to 0.18%.

PROPERTY TAX IN SPAIN FOR FOREIGNERS

Property taxes in Spain for non-residents are getting higher than for residents. Thus, non-residents who become homeowners in Spain must pay 2% of its cadastral value, which is subject to a tax rate of 19% for residents of the EU, Iceland and Norway and 24% for other taxpayers. Buying property in Spain by a non-resident of the country, provided that if real estate is an investment, then the income from its rent will be fully taxed (19% for residents of the EU, Iceland and Norway; 24% for the rest). The Income Tax for Non-Residents (IRNR) is filed annually.

IS IT POSSIBLE TO MAKE A REAL ESTATE PURCHASE REMOTELY?

In view of constraints of the Covid-19 pandemic, many are turning to telecommuting technology to transact apartments in Spain, for example. Although this option is effective, it should be approached with caution, as there is a risk of becoming a victim of fraud.

Recommendations for conducting a real estate transaction remotely:

  1. Visit reliable real estate platforms.

    These platforms are very useful when searching for real estate on the Internet, as they offer you to select a location, price range or seller from a range of constantly updated offers.

  2. Hire a real estate agent.

    Find a real estate agency. It is important that it is registered and certified, and has experience in selling real estate remotely.

  3. Make a remote visit.

    For a virtual tour, it will be useful to prepare interesting questions about real estate in advance.

  4. Make sure the documentation is in order.

    To put up a house or apartment for sale, the owner must have documents in the National Register. It is necessary to verify that there are no outstanding debts or legal problems with the Ministry of Finance or other financial institutions.

  5. Choose a suitable payment method.

    It is very important to choose the method that suits the buyer's capabilities and budget. To do this, you need to find a suitable interest rate, term and determine the financing or co-financing scheme.

  6. Conduct a transaction remotely.

    Technology allows you to close transactions remotely, as the agent can send you the necessary documentation using various digital means. For example, a sales contract can be signed using an electronic signature system. In this process, it is important to hire a lawyer who will advise on the transaction and certify its legality.

HOW TO BUY REAL ESTATE IN SPAIN FOR A FOREIGN CITIZEN

Foreign citizens often become buyers of Spanish real estate, since Spain is an attractive country for investment. Let us dwell on the question of how to buy real estate in Spain for a foreigner.

Features of buying Spanish real estate by foreigners:

  • it is necessary to comply with the legal norms of two countries - Russia and Spain,
  • in the case of a mortgage, Spanish banks will approve financing only 50-60% of the transaction at 2 -3.5% per annum,
  •  At the time of signing the contract, the participation of an accredited translator is required.

The main stages when buying real estate in Spain by a foreign citizen:

  • property selection,
  • documents preparation,
  • formation of sales contract,
  • payment,
  • change of owner in the Property Register.

So, we have answered the question of how to buy property in Spain.

BUYING PROPERTY IN SPAIN: PROS AND CONS

There are a number of disadvantages of owning real estate.

  1. Costs of housing maintenance (payment of utility bills, repairs, etc.).
  2. Payment of the annual taxes of homeowners in Spain.
  3. Bureaucracy of Spanish banks.

Advantages of buying a property in Spain:

  1. Obtaining a residence permit or Golden Visa in Spain.
  2. Profitable investment in the case of tourist real estate (up to 6-7% per annum).
  3. Transparency of making purchase and sale transaction.
  4. Availability of housing in a resort country.

WE WILL HELP BUY REAL ESTATE

You can contact our company to help you select real estate and the organize your moving to permanent residence in Spain. Start your journey to your dream now!

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