Buying a house in Spain as a foreigner may seem like a lengthy and challenging process, but it doesn’t have to be.
As it is a significant transaction, knowing the correct steps to follow will be crucial to ensure a successful and smooth purchase.
In this article, you will find a descriptive list of all the steps that any foreigner should follow, along with several important considerations and all the taxes and costs associated with the buying process.
Keep reading to find legally relevant aids and essential mistakes to avoid.
How long does it take to buy a property?
Let’s start by conceptualizing the total duration of the process, as knowing the timelines in advance will be crucial for planning correctly.
The process of buying a house can be divided into 3 different steps, each with a different duration.
The first thing you will need to do to buy a house in Spain as a foreigner is to find the ideal property. That is, the property that suits your needs and the one you will ultimately choose.
Depending on how demanding it is (and there are plenty of reasons to be), this can take from 3 months to up to a full year.
Take your time.
Consider finding the suitable city or town, and not only analyze the property and each of its internal features, but also its surroundings and how close you will be to places like public transportation, shopping centers, or even your favorite leisure spots.
Once you have found your home, the actual buying process will begin.
This can take from 2 to 3 months until you finally receive the keys.
However, in the vast majority of cases, this process will be further extended (and therefore the last and third step will be created) if you apply for a mortgage.
If that is the case, you will need to add a few more weeks, as the bank takes its time to review and process all the details involved and complete the administration.
Our recommendation is to always plan well in advance and play with certain margins. The process can take up to 3 months, but it is better to give yourself enough time to avoid stress if any problems arise (which is quite common).
How to buy a property?
Now that we have a clear idea about the duration and key components of the process, let’s delve into the nuances of each.
What follows is the complete list of all the steps you will need to follow to ultimately acquire your new home in Spanish territory.
Get your NIE
Obtaining the NIE is the first step, and indeed one of the most important ones.
The NIE is the identification number granted to you as a foreigner, and it is essential for carrying out any economic activity or financial transaction (such as buying a property), as well as for registering as the owner of the property once purchased.
Requesting this number is quite straightforward, and you can do it from abroad (at the Spanish embassy while still in your home country) or directly in Spain.
There are different types of NIE, and depending on your plans, you will need to request one of the following options:
A non-resident NIE if you are going to buy the house but will not live in Spain (meaning you will only travel to the country for that purpose) and you are a non-EU resident.
A resident NIE if you will be in the country for more than 183 days per year, regardless of whether you are from the EU or not.
And if you are from the European Union but will only be in the country for the duration of the purchase, you can obtain a temporary NIE.
Our recommendation is to hire an immigration lawyer to obtain the NIE quickly and easily; as sometimes it will not be granted unless you correctly justify the reason for requesting it; and also getting an appointment with the immigration office could be an almost impossible task.
Open a bank account
Although not 100% essential, having your bank account in Spain will streamline the process and facilitate the transaction in its various steps.
This bank account will be essential for paying notary fees and all other associated costs.
Moreover, having money abroad usually entails additional delays and complications.
Once you have the NIE, our recommendation is to go directly to open an account at the bank of your choice.
Negotiate with the seller
Now that you have found the property you were looking for, it’s time to agree on a price with the seller.
This part can be particularly tedious, as Spanish sellers often enjoy negotiating and trying to raise the price (against your interest as a buyer).
This is where having a real estate agent is extremely beneficial, as it will streamline the process and even negotiate on your behalf.
A crucial tip before you dive into negotiation is to truly understand the «real» market price of the property you intend to buy.
Entering negotiation with a figure you deem fair based on personal judgment alone may result in you paying much more than you should.
For this reason, it’s best to first check and compare the property’s price using different valuation websites.
Start looking for a mortgage
Now that you have a general but more rigorous idea of the total cost, it’s time to start looking for a mortgage if you’re going to need one.
At this stage, we suggest that you begin comparing and selecting the credit institution you will ultimately hire.
Learn about the various interest rates, and which plan among those offered is the one you will ultimately accept (as conditions can vary drastically).
If you make your decision at this stage, the process will be much smoother later on (as it requires prior research that takes quite some time).
Make sure that if you are a non-resident, you will need to pay 15% more in down payment compared to residents.
Frequently Asked Questions about Buying a Property in Spain as a Foreigner:
What taxes does a foreigner pay when buying a house in Spain?
When buying a house in Spain, a foreigner generally pays taxes such as the Property Transfer Tax (ITP) or the Value Added Tax (VAT), depending on whether the property is second-hand or new, respectively. Local taxes may also apply, along with other associated costs.
What happens if I buy a house in Spain and am granted residency?
Buying a house in Spain does not automatically grant residency. However, there is a possibility of obtaining residency through specific programs for foreign investors, such as the Entrepreneur’s Law, which sets specific conditions, such as a minimum investment in properties.
What documents do I need to buy a house in Spain?
The necessary documents may vary, but generally include verifying the Foreigner Identification Number (NIE), the purchase contract, notarial deeds, proof of tax payments, and other documents related to the property and transaction.
How can I invest in an apartment in Spain as a foreigner?
To invest in an apartment in Spain as a foreigner, you need to follow similar steps to those of a resident, such as obtaining the NIE, seeking legal, financial, and real estate advice, and complying with established tax and legal requirements.
How much cash can I pay to buy a house in Spain?
Spanish legislation sets limits on cash payments for real estate transactions, typically limiting cash payments to smaller amounts to combat fraud. It is advisable to consult current regulations and use secure payment methods.
What taxes must a non-resident pay in Spain?
A non-resident in Spain may be subject to the Non-Resident Income Tax (IRNR) on income generated in the country. Additionally, when selling a property, they may be subject to tax withholdings.
What tax do I have to pay when buying a house?
When buying a house in Spain, taxes such as ITP or VAT may apply, depending on the nature of the property. Other local taxes and possibly notary and registration fees should also be considered.
What taxes are paid when buying a second-hand property?
When buying a second-hand property in Spain, the Property Transfer Tax (ITP) is typically applied. The percentage may vary depending on the autonomous community.
How much tax do foreigners pay in Spain?
Foreigners in Spain are subject to taxes like any resident. Tax rates and taxes may vary depending on personal circumstances and the type of income or transactions conducted. It is advisable to seek personalized tax advice.
Marta Palacios Cuesta is the founder and principal consultant of Es Abogado Extranjería, a law firm specializing in immigration law in Madrid and Seville. With an impressive academic background, Marta offers expert advice on immigration procedures, residency processes and obtaining Spanish nationality. Committed to providing personalized and up-to-date solutions, her firm stands out for its detailed and professional approach. If you need legal guidance regarding your status in Spain, contact Marta for a personalized consultation at Es Abogado Extranjería.