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Steps for buying a home in Spain if you are a foreigner

Steps for buying a home in Spain if you are a foreigner

When a non-resident foreigner begins the process of buying a home in Spain, they should take into account the requirements to be met

Most house buyers in Spain come from Russia, France, Italy and Germany. Regardless of their origin, any foreigner who does not reside in Spain and wants to buy a home in Spanish territory must follow certain steps up to the purchase of the residence. However, buying a home in Spain does not require foreigners to do a large amount of paperwork; they just have to take into account some formalities and the taxes that will have to be paid after the purchase.

Requirements for foreigners when buying a house

First, the buyer must have an Identification Number for Foreigners (NIE), a personal and unique number granted by the General Directorate of the Police. It can be requested either in Spanish territory or from abroad through an embassy or consulate. This document is essential for carrying out any economic transaction in our country, so it must be available before signing the deed. Acquiring it is easy, but it does take a great deal of time, and so it would be advisable to ask a real estate agent for help to speed up the process as much as possible. Having an NIE does not always mean having residency in Spain.

Secondly, whether the foreigner resides in Spain or outside of Spanish territory needs to be taken into account for the application of Non-Resident Income Tax (IRNR), a tax that is charged on income obtained in Spanish territory by non-resident natural persons and entities. Therefore, foreigners who do not reside in Spain must contribute to IRNR, a tax that is applied in the event that they do not live permanently in the country. A person is considered a resident if they live here for 183 days of a calendar year (in the case of being a resident, this tax does not apply and the person would be taxed with Spanish Income Tax, IRPF).

The sale of the property will be carried out before a notary (or embassy or consulate, if applicable) and will be registered in the Property Registry. Before making the purchase in the presence of the notary, it is very common to sign a purchase down payment for the sales commitment in which a part of the price is paid beforehand. Once the deed of sale is signed, the house is delivered. 

A tax representative must be appointed at the moment in which the foreign buyer becomes the owner of the home if they do not reside in Spain.

Do you know how tax residence in Spain is proved? The customary residence has IRPF paired to it, unless international agreements and treaties signed by Spain provide for otherwise.

Advice for foreigners when buying a home

An effective way to start the purchase of a house is to hire a real estate agent to help find and choose the perfect property, a course of action that will save time and money.

It is also highly recommended to appoint a local lawyer to perform consultancy on the purchase and verify the legal capacity of the seller, real estate developers and other intermediaries.

At the same time, the study of the property and the negotiation of the terms of the contract are important steps that the buyer must carry out. For example, it is important that you verify that the land and property are shown correctly in the Property Registry.

Although it is not mandatory, it is advisable that the buyer open a bank account in Spain, since this will facilitate the payment of taxes and all other payments related to the process of buying and selling a property.

Another recommendation is to register the home with the Property Registry since it provides great legal certainty when buying the absolute property of the real estate rights.

Other important aspects to take into account are the taxes that must be paid in the case of residing or not in Spain and the conditions for mortgages for foreigners in Spain.

Golden Visa: a route for residency for foreign investors

When we talk about a Golden Visa we refer to a special residence visa intended for foreign investors to be able to reside in any part of the national territory of Spain for a year, paired with a work permit. They can have access to the entire Schengen area without the requirement of continuous residence in Spain. Thus, the service consists of granting a residence permit to those foreign investors who make a real estate investment of 500,000 euros.

If you wish to know more about this service, from the management of the residence permit to accompaniment during the realization of the investment or wish to contact us, you can do so via this link.

 

 

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