According to financial services company Bankinter, house prices in Spain will drop by 3% in 2023.
Spaniards and foreigners alike will be clamoring to get on the property ladder next year, with good reason. Spain promises better prices and weather than the rest of Europe, and the landscape is magnificent too. Once you’ve experienced the laid-back lifestyle, it’s hard to go back.
That’s why so many people look to buy property in Spain. If you’re one of them, continue reading to understand how you can become a property owner in the Kingdom of Spain.
How Does a Foreigner Buy Property in Spain?
It’s relatively easy to buy real estate in Spain. The government welcomes foreign buyers, and it’s no wonder Spain is a popular destination for people looking to purchase a property.
You don’t need to be a resident, but you will need to get an NIE (Número de Identificación de Extranjero), which you may know as the Foreigner’s Identification Number. You can’t do any fiscal activity in the country without an NIE. People outside Spain can usually apply for an NIE at the Spanish embassy or consulate.
Since 2020, British citizens must also apply for a TIE (Tarjeta de Identidad de Extranjero) after obtaining their NIE. This foreign identification card is for non-EU residents in Spain.
Once you’ve got your NIE (and TIE if you’re British), you can start searching for a property. We recommend taking your time, checking properties yourself, and assessing whether everything is up to code. You can look online, and maybe you’ll stumble upon a dream property in Marbella.
Once you find the right property, a reservation agreement can be struck, and a deposit may follow. This means the property will not be sold to another party.
If you need a mortgage, you’ll have to apply to banks. You’ll have to sign the property deeds before a notary, and then you can register the property in the Spanish Land Registry.
It depends on several factors, but a potential buyer abroad can become a homeowner in Spain in a matter of months.
The Golden Visa Program
Launched in 2013, Spain’s Golden Visa program is obviously very attractive to foreigners looking to buy. It’s particularly interesting for those who want to live and work in Spain. The Golden Visa program stipulates that foreigners can get Spanish residency by investing at least €500,000 in real estate.
Your spouse and children will also be able to live and work in Spain. The residency visa eventually leads to citizenship for those who legally reside in Spain for ten years.
To secure the Golden Visa, foreigners can apply at the nearest Spanish Embassy within three months of purchasing a property. You can choose to do the application yourself or through a legal representative.
Fees You Should Know About
As in every country, there are many extra hidden costs when buying a property. Most of the costs fall on the buyer. To start with, you’ll have to negotiate a fee with your estate agent or lawyer.
Registration fees differ from region to region, but the notary costs and title deed tax will usually be around 1% – 2.5% of the purchase price. Unless it’s a new build, the buyer will have to pay a transfer tax (ITP) which ranges from 6% – 10% of the price of the property, depending on the region.
VAT is 10% on the price of the property, or 7% if you’re buying in the Canary Islands. You also can’t avoid stamp duty in Spain, which invariably is between 0.4% and 1.5% of the purchase price.
As a property owner, you’ll have to pay property tax in Spain. And certain homeowners will have to pay non-resident income tax and a Capital Gains tax.
What To Avoid When Buying Property in Spain
There may be hiccups and frustration when buying a property, even more so if you are doing it in a foreign land.
If your Spanish is not good, be sure to get all the contracts and documents translated by an independent translator. You’re about to make a huge investment, and it’s essential to know what you are committing to.
Failing to understand what you’re getting yourself into can turn a dream into a nightmare. Consider hidden costs and do thorough research so that you understand the buying process and any challenges that you may face.
Don’t get legal advice from someone who’s looking after the interests of the agent or developer. Instead, find an independent lawyer who specialises in Spanish land law, and be sure to check their credentials. As a buyer, you can choose your mortgage provider, notary, and so forth.
Where to Buy Property in Spain
Spain is a huge country, and each region has so much to offer. Prices vary massively, depending on where you want to live.
The most expensive cities are Madrid and Barcelona, but a whopping 80% of foreign property purchases occur in the Alicante province. If you prefer islands, Palma de Mallorca’s breathtakingly beautiful beaches make it a Mediterranean fairytale. And investing in a luxury villa in Mallorca would guarantee you a Golden Visa.
Head inland in provinces like Valencia or Cordoba if you’re looking for budget options. There’s something for everyone in Spain, but you may have to go and explore to find your dream location.
Spain Will Steal Your Heart
Owning property in Spain is a dream for many foreigners, and, thankfully, the process is far from complicated. We hope this article has given you valuable information on how to become a homeowner in a country with rich traditions and culture.
Before you buy property in Spain, contact our experienced team at Choose Marbella for expert advice. The first steps can be confusing, but we’re here to help you.