Buying property in Spain / Marbella
Streets full of life and beautiful architecture is what characterises most Spanish cities. Due to it's Mediterranean climate, Spain is also
the ideal place for a second home, whether at one of its beautiful mainland costs or on one of its famous islands. If you want to know how to invest in the Spanish property market, you can find some tips and recommendations below.
Buying property in Spain as a foreigner
In Spain, there are no restrictions towards the nationality of buyers. However, buyers from some nations are examined thoroughly by Spanish law in order to avoid money laundering. To be able to buy as a foreign private investor, buyers must have a Spanish bank account and a Foreigner Identity Number (NIE - Número de Identificación del Extranjero).²⁰
Generally, it is not mandatory to have a license as a real estate agent though there is a certificate (API - Agente de la Propiedad Inmobiliaria). This is easily attained by professionals holding a technical degree. However, Catalonia has a specific regulation according to which a real estate agent must be registered in an official and public real estate agents register, have professional liability
insurance and maintain a surety to ensure the reimbursement of the amounts received from the potential buyers. One of the responsibilities
of a real estate agent in Spain is to check the title of the owner and to check all the encumbrances that the property has and to inform the potential buyer accordingly.
Purchase offer (Oferta de compra)
Private sale and purchase contract (Contrato de arras)
The Contrato de Arras is an open contract document between seller and buyer and can be modified between them as required in terms of timelines, amounts, special conditions, etc. Normally, the buyer pays the 10% of the total purchasing price to the owner, but this amount can be eventually higher according to possible negotiations. This contract is a milestone during the closing as it defines all the legal conditions between the two parties. In some specific cases (arras penitenciales), if the buyer declines the purchase, then he/she loses the amount
delivered to the seller. If the purchase is declined by the seller, he/she must additionally pay a fine.
Notary Deed (Escritura Pública)In order to finally transfer the property, the notary prepares the legal contract called "escritura" that specifies who the new owner of the property is under which conditions, as well as explaining if there is a mortgage among others. This is also the moment in the purchase process that the buyer has to pay the remaining amount of the purchase price.
The total purchase process may approximately take 2-3 months from the day the buyer signs the offer to the final “escritura” of the
property, but this term is subject to the specific agreement between the parties.
Property Taxes in Spain
There are two significant regular taxes for all property owners in Spain. Firstly, the Municipal Real Estate Tax (impuesto sobre bienes inmuebles), a council tax, which is collected on an annual basis.This amount is calculated based on the cadastral value of the property. Secondly, the Imputed Income Tax, which is calculated on the rateable value (valor catastral) of a property. Please consult your local tax expert for more detailed information and professional advice.
Foreigners are usually able to obtain a loan in Spain, but
normally the amount provided does not exceed 70% of the purchase price.
Property prices in Spain and additional tips
The Golden Visa programme of the Spanish government grants automatic residency in Spain when a foreign investor buys a property of a minimum amount of 500,000.00 €. This applies to any kind of property, whether residential, commercial or a combination of both. The Golden Visa does not require the investors to live in Spain for more than 183 days a year to be able to renew it. It’s good to know that the investor is not obliged to gain Spanish tax resident status to obtain a renewal.
In order to be considered in the Golden Visa programme, applicants have to obtain health insurance issued in Spain as well as proof of
sufficient resources. In case of the purchase of a property to obtain the Golden Visa, applicants have to demonstrate proof of the certificate of property registration. ²⁴
²⁰ For further information please see: http://www.exteriores.gob.es/Portal/es/ServiciosAlCiudadano/InformacionParaExtranjeros/Paginas/NIE.aspx
²¹ The amount of tax varies in the different regions of Spain. Therefore, it’s advisable to consult with a local tax expert.
²² The amount of fees is set out in the Spanish Real Decree 1426/1989 and depends on the price.
²³ Please note that these prices may vary depending on the lawyer you work with.
²⁴ For further information on the Golden Visa Programme please see: http://extranjeros.empleo.gob.es/es/unidadgrandesempresas/ley14_2013/tripticos/triptico-invertir- INGLES.pdf