If you decide to invest into Spanish Real Estate, then you definitely shall consider some points:
NIE. This is the Foreigner’s Identification Number (Número de Identificación de Extranjero). Nothing works in Spain for foreign citizens without NIE. This Number needed for property purchase, for Bank account opening and other government-related services. You can receive NIE in Embassy of Spain at the place of your origin or in Spain itself. The cost of this service is nearly nothing and it will be a permanent number for all of your life.
NIE doesn’t give any rights for work, living etc., and it doesn’t replace residence permit or visa. More info here:
Taxes/Fees at Real Estate purcahase. In short, when you buy a property in Spain please consider to pay 10% to Notary services and taxes.
In more details, this tax differ for new real estate purchase and real estate resale.
You are liable for two taxes when you buy a new-build property in Spain:
VAT (IVA in Spanish) equal to 10% of the purchase price
Stamp duty (legal documentation tax/ AJD in Spanish) at 1.5% of the purchase price.
On resale property one tax is applied – Transfer tax (Impuesto de Transmisiones Patrimoniales/ITP in Spanish).
On Costa del Sol in 2020 the transfer tax was levied at the following rates:
8 per cent on properties up to €400,000
9 per cent on properties priced between €400,000 and €700,000
10 per cent on properties priced over €700,000
In case if you buy property for 700.000EUR, you pay 8% for amount till 400.000EUR and 9% for the rest 300.000 EUR.
Taxes can slightly differ in different regions, but usually everywhere they are pretty much similar.
Notary fee – around 1%.
You don’t pay any fees to agents (in case with Vitomar) since this interest covered by seller. So, for you this service is free of charge.
Spain also offer Golden Visa program for foreign property owners. Under this scheme, if you invest more than EUR500,000 in Spanish properties, you’ll get a residency visa. Golden Visas are primarily for retirees and holiday home buyers, but are particularly popular among investors outside the European Union.
When you choose property, seller requests warranty payment (You sign Contrato de Reservo.) which can be 1% – 5% or fixed payment of 5.000EUR (common case). After that the Property removed from sales platforms and the process of documents preparation begins.
Before that you you need to figure out whether you need mortgage. You can get mortgage in your country or in Spain. You should confirm legal sources of your income. The process of mortgage approval can take 3 months.
After all documents and checks will be passed, you visit Notary to sign Purchasing agreement. At the same time you pay remaining amount via bank transfer, Notary fees by credit card, for example, and taxes. And congratulations – you get keys!