Do you want to buy a property in Spain as a foreigner, don’t know what procedures to follow or where to start? The sale and purchase of homes in Spain by foreigners, especially in tourist areas, accounted for 10.73% of total sales in the third quarter of 2020, according to a report by the Association of Registrars. Therefore, there are many foreigners who decide to have a first or second residence in our country, but some are unaware of the procedures that must be followed to buy a flat in Spain as a foreigner safely and in compliance with the law.
Steps to follow to buy a house in Spain as a foreigner
Index of contents
If you have visited Spain, loved the way of life and the sun and have decided to buy a house in Spain as a foreigner, these are the steps you can follow:
Search and compare
As in any other case, you should start by searching and comparing. There are numerous websites where you can search for flats, houses or flats such as idealista.com, pisos.com, fotocasa or Milanuncios. It is important that you compare prices and that you do not rely on prices that are too low or advertisements with hardly any information or photos.
Visit the property
It seems obvious, but it is not so obvious. It is essential to visit the property, see the light it has, the orientation, the noise it may have from the street or other neighbours, the communications and services in the area, etc. To avoid these trips from your country of residence, you can count on the help of a consultancy firm to carry out this procedure for you. For example, at Leialta we take care of these visits, taking into account and analysing all the factors that influence the purchase of a property and taking photos and videos from different perspectives of the property. With these graphic files and the observations on the property you will be able to get a real idea of the state and situation of the property without having to travel to Spain.
Apply for a NIE
You will need the NIE or foreigner’s identity number so that you can be identified when making the purchase contract and to pay the taxes related to the transaction. You can apply for the NIE at a police station in Spain or at the Spanish embassy in your country.
Check the ownership, characteristics and encumbrances of the house
Once you have chosen the property you want to buy, you should check who the owner is, what encumbrances the property has and what its characteristics are (surface area, distribution, etc.). To do this, you will need to request a Nota Simple from the Land Registry. This can be requested online or in person at the registry corresponding to the property. In the Nota Simple you will be able to see the name of the natural or legal person who owns the property, the charges it has (mortgages, easements, embargoes, etc.), its useful and constructed surface area and other details of the property.
Negotiate the price and conditions of the sale
Bear in mind that in a purchase-sale you will not only have to negotiate the price but also the date of purchase, who pays the purchase-sale expenses, before which Notary Public it is going to be carried out, etc. At this point it is important to have legal advice from a law firm specialised in this type of transaction.
Sign a deposit contract
Before signing the deed of sale before the Notary, you may have to sign an earnest money contract. This is a contract in which the buyer and seller agree to carry out the sale and purchase and the buyer gives a percentage of the price as a sign of his commitment (the percentage is usually approximately 10%).
Signing of the deed of sale
On the agreed date and time, buyer and seller will go to the Notary to sign the deed of sale. At this time the buyer will hand over the missing part of the price (or the bank will hand it over if a mortgage has been requested) and the seller will hand over the keys to the house.
Payment of expenses and taxes of the sale and purchase
Buying a house in Spain as a foreigner entails a series of expenses and taxes (just as if you were Spanish), which are as follows:
- Value Added Tax (VAT) or Transfer Tax (ITP) depending on whether it is a first or second transfer.
- Municipal Capital Gains Tax (Plusvalía municipal), which is payable by the seller.
- Stamp Duty (AJD), which is not paid in all cases.
- Fees of the Notary who formalises the sale. There are a series of bases known as notary fees. You can check with the Notary what he/she charges for the sale.
- Fees of the Land Registrar for the registration of the sale. There are also fees and you can check with the registrar before you buy.
- Expenses of the gestoría who carries out the paperwork to pay the taxes and register the sale and purchase in the Land Registry. It is not compulsory to hire a gestoría, but it can save a lot of time and is an expense.
- Registration of the sale and purchase. Finally, the deed of sale will be registered in the Land Registry so that the property will be in your name.
As you have seen, buying a property in Spain as a foreigner requires a series of time-consuming procedures, and it is important to have the help of an advisor in Spain who can help you with the procedures to be carried out or do them for you.
