As a foreign citizen of an EU member state, you can buy a property in Spain without any problems. Here we have put together the important points for you so that the search for a dream home in Spain does not turn into a nightmare
Step 1 : If you are 100% sure of your intention, the basic requirement for buying property in Spain is the Spanish tax number : the so-called "Número de Identificación de Extranjeros", or "NIE" for short. You must quote this number in all legal transactions (purchase contract, rental contract, opening a bank account, etc.). We can set up the tax number for you here in Spain or you can get it at the local Spanish consulate at home.
You should then take care of opening a Spanish bank account : you will need the aforementioned NIE to open the account. Property transactions in Spain are still mostly done with bank cheques. Therefore, you need a Spanish bank account.
Step 2 : You have already found your property in Spain (Barcelona) and want to proceed to the purchase procedure. You should check the following documents with the seller before you reserve your dream property in Spain or sign a purchase contract
Document check / Due diligence :
Step 3 : Contrato de Arras is usually a down payment contract (Arras contract). This is a private contract of sale in which a deposit is agreed.
In Spain, the contract can be drawn up in such a way that both parties are contractually bound and do not just want to express a non-binding interest in buying(confirmative statements). No one can withdraw from the purchase.
The most commonly used Arras contract in Spain is the "Arras Penitenciales" in which a penalty can be added so that the buyer and seller would have a right of withdrawal, whereby the buyer loses the deposit in case of withdrawal and the seller has to pay twice the agreed deposit in case of withdrawal (Penitential Arras), cf. article 1454 CC (Spain).
Here is an example of an arras contract in EnglishArras Contract Example (Webseite)
Simple note or a registry certification
Any negotiated conditions are drawn up here. Normally a 10% deposit is paid, which the buyer loses in case of withdrawal or the seller has to pay back the deposit twice.
The nota simple is the Spanish version of the land deed and is an extremely important document. It not only tells us who the owner of the property is, but also describes its boundaries, as well as any encumbrances, mortgages, rights of way, usufruct, etc.
If you find any encumbrances, it is recommended to include them in the Spanish purchase contract (Contrato de Arras) and then have them deleted at the same time as the property is handed over to the notary.
It is unlikely to be important to insist on any deletions, as it is very difficult to delete them afterwards. In addition, a deletion can only be arranged via the judge or notary. This in turn entails costs, and apart from that it is very difficult to obtain the necessary documents for the deletion.
Here is an example of a "Nota simple" land register extractNota Simple (Grundbuchauszug)
- IBI Impuestos de Bienes Inmubles : Property owners in Spain must pay property tax annually.
Here is an example of a "IBI" land register extractibi (Spanische Grundsteuer)
The owner is obliged to pay this tax for the whole year, even if the notarial sale takes place at the beginning of the year, for example on 02 January, in Spain the owner has to pay the property tax for the whole year. Often it is agreed to pay this proportionately, but this is not obligatory for the buyer.
It is particularly important to check with the Spanish Town Hall (Auyntamiento) for unpaid I.B.I bills, otherwise non-payment of Spanish property tax may result in the confiscation of your property and its subsequent public auction. Ask for proof of payment of the property tax for the last 4 years or ask at the town hall if all property tax bills have been paid.
- Cuanta de Comunidad /Acta de Comundidad : If more than one owner owns a property, it is important to contact the property management company to find out whether the owner is meeting his or her mortgage payments.
The "Community Minutes" are the Spanish minutes of the owners meeting, where future plans and current measures are determined. The construction of a lift or renovation measures can easily amount to several thousand euros.
It is highly recommended to contact the property manager to discuss the condition of the building and to identify any renovation backlogs.
Before the notary appointment it is necessary to get the "Certificate of
Here is an example of a "Community Act" land register extract
- Inspección Técnica de los Edificios - ITE is a very comprehensive document which is prepared by architects and engineers. In Spain, buildings older than 50 years are subject to a technical inspection: this document can be compared to the German TÜV for cars. Here in Spain, maintenance obligations of buildings exist within the framework of the legal regulations on housing.
The ITE is thus a state-ordered control system for buildings, which is intended to ensure compliance with maintenance and renovation obligations.
For buyers and investors, not only in the housing sector, it is therefore advisable to also check the object of purchase to see whether the building is currently subject to a technical inspection obligation and, if so, whether this has already taken place and with what result.
Here is an example of a "ITE" land register extractCertificado de Aptitud ITE (Erhaltungszustand)
-Certificado energetico (Energieausweis)
This is not necessarily the most important document, but it is called an energy efficiency certificate, which indicates the energy efficiency of buildings in Spain. This is shown in letters from A-G, A stands for very good and G for poor energy efficiency.
This document must be provided by the owner at the time of each sale and should be completed by the time of the notary appointment at the latest.
Here is an example of a "Energy Certificate" land register extractCertificado Energetico (Energieeffizienz-Zertifikat Spanien)
-DNI o Constitución y Poderes Get a copy of the personal identity card or, if the owner is a company, the certificate of incorporation and power of attorney of the seller.
-Cedula de Habitalidad : Certificate of Habitability meets minimum requirements for a usable building. The requirements include a certain size, technical equipment and sanitary facilities. The exact definitions are defined in the respective regulations on building. efore, a cédula de habitabilidad is mandatory. Otherwise, providers are not allowed to conclude a contract and therefore not allowed to connect and supply.
Here is an example of a "Cedula de Habitalidad" land register extractCedula de Habitalidad (Bewohnbarkeitsbescheinigung)
-Contrato de Alquiler : This is what the Spanish tenancy agreement is called. If the property is rented out, it is important to take a close look at it, as important rights of first refusal can exist here. In the case of residential property, the tenants right of first refusal is a fundamental right and cannot be waived. The tenant must be informed of the amount of the purchase price and the date of the sale, and he has the right to move into the property within 30 days of receiving notification of the sale.
The notice is sent by "Burofax", which is similar to the German registered letter with advice of receipt, which provides clear proof of both the receipt of the letter and its content.
In addition, the rental contract should be checked for rental period, deposit, creditworthiness, actividad, rent cap and many other important points.
Here is an example of a "Tenancy Agreement" land register extract
Step 4 : Notary appointment
Step 5 : Land transfer tax, IVA, AJD
Real Estate Transfer Tax (ITP) for second-hand properties Value Added Tax (IVA) or the (IGIC - Canary Islands) for new properties
Tax obligations for real estate owners in Spain
Current : Additional payment of property transfer tax
If you have decided to buy a property, you should take into account that there are price differences within Spain. Depending on the autonomous region and especially the archipelagos (the Canary Islands and the Balearic Islands), the capital Madrid or the southern Andalusia, there are more or less strict tax regulations, which can have a strong impact on the final cost of buying a property.
Before we begin to explain the tax system in certain areas of Spain, we must start from the premise that the purchase of new, or even unplanned, construction is not the same as the purchase of a second-hand property, i.e., a property that has already been used.The legislator therefore differentiates taxation according to the initial conditions, an aspect that can undoubtedly be decisive when a buyer decides to buy one property or another.
In Spain, the purchase of a property is subject to one of these taxes :
Property Transfer Tax (ITP) for used properties Value Added Tax (IVA) or the (IGIC – Canary Islands) for new properties
Second-hand real estate + Real Estate Transfer Tax (ITP)
If you decide to buy a second-hand property, the tax to be paid, hence the ITP, will strongly depend on the Autonomous Region, as they have the possibility to set their own tax rate. This varies between 5% and 11%, but there are exceptions.
The real estate transfer tax does not apply to the price stated in the public deed or in the private purchase contract, unless the value verified by the tax office is higher. In this case, the latter is taken into account.
Real Estate Transfer Tax Catalonia (Barcelona, Costa Brava, Sitges)
Since 31/03/2017 - Land transfer tax on property purchase: 10% up to 1,000,000.00 EUR- from 1,000,000.00 EUR: 11% land transfer tax in Catalonia - the vehicle sold with the property is subject to 5% transfer tax - here we calculate the market value of the vehicle. - new properties are sold with 10% VAT (IVA) and the buyer also has to pay 2.5% AJD document tax, up to now it was 1.8%.
For tax reasons alone, it is advisable to consult an expert when buying real estate.
In simple terms, the following taxes may Apply :
-Real Estate Transfer Tax (Impuesto sobre Transmisiones Patrimoniales).
-Value Added Tax (IVA), Income Tax (IRPF)
-Land Value Added Tax (Municipal Tax on the Increase in the Value of Land of an Urban Nature)
-Documentary Act Tax, etc.
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