How to Legally & Safely Acquire Property in Spain for Foreigners
Do you want to purchase property in Spain but are unsure about the process for non-residents? In this blog, I will list the steps with detailed explanations on how to acquire property, legally and quickly.
We suggest that before looking for properties, you will want to register with the Spanish Tax Office for a foreign tax identification number (NIE) as this is required by Spanish Notaries for the purchase and sale of the property. Next, you will want to open a bank account with your NIE as you will have to pay taxes and expenses with respect to the property according to Spanish law.
You have just found the property of your dreams! What should you do before purchasing the property to ensure that the transaction goes smoothly? You will want to verify the ownership of the property in the Spanish land registry (nota simple) and request a copy of the deed (escritura) to ensure that all debts such as mortgages, property taxes and expenses, and payments due to the tenants’ association are up to date.
This is imperative because all debts associated with the property are transferred to the buyer from the seller in Spanish law.
Next, you will want to make a deposit contract, typically 10% of the purchase value of the property to prevent the seller from blocking the contract. If the seller decides to block the contract after you have made a deposit, the seller will be penalized based on agreed-upon penalties between you and the seller.
Then you will need to execute the deed of sale through a Spanish Public Notary. This document will detail the acquisition and transfer of property to the buyer from the seller and list all the specifications of the property as well as the agreement between the parties that the sale is free of any debts or obligations. If for any reason, you cannot be present for the deed of sale, you can give a power of attorney to us as your legal representatives to act on your behalf.
Now you will want to inquire with your lawyer to ensure that you correctly pay taxes and expenses associated with the purchase of your property. These expenditures include a Value-Added Tax (VAT) and transfer tax which are usually 10% and 5%-10% of the purchase price, depending on the location of the property as well as a stamp duty fee.
Afterward, you will want to register your newly acquired property in the Spanish land registry to demonstrate that you are the rightful owner of the property. Similarly, if for any reason you cannot be present for the land registry, you can give a power of an attorney to us, to act as your legal representatives on your behalf.
Lastly, you will want to fill out a cadastral declaration within two months of executing the deed of sale and send it to the Delegation of Economy or an authorized Land Registry. This document will guarantee the ownership, the tenure, and the geographical location of your property with respect to the Cadastral Electronic Site (SEC). We will be happy to fulfill this requirement at your convenience!