Investing in Real Estate in Spain
A Simple Step-by-Step Process
Investing in property in another country can feel intimidating. But, with more knowledge and assistance, you’ll realize that it is much more simple than it seems. There are ten crucial steps you need to take while investing in real estate in Spain. Fortunately, it is more convenient than ever to invest in foreign property from the comfort of your own home, wherever that may be. Spain is a favorable candidate for your investment because of the right to unrestricted foreign investment. The rapidly growing economy and property market also helps.
Simply follow these steps and, before you know it, you’ll be a property owner.
Step 1: Do Your Research
So, you’re thinking of investing in real estate in Spain. The first step is to educate yourself about the process. You should become an expert on the subject. Many failed investment attempts are due to a lack of awareness of the details and requirements of Spanish real estate investment. If you know what you are talking about, you’re already ahead of the game!
Step 2: Budget!
An analysis of your finances is required for any type of investment. This is a big decision that must be carefully thought out and planned before taking any action.
You should also consider the different forms of payment that you are able to use. Options include complete one-off payments, mortgage loans, and mortgage subrogation. You must find the most appropriate choice for your specific situation.
Step 3: Choose an Investment Type
There are many ways to go about investing in real estate in Spain and each one has its own benefits and drawbacks. Many investors choose to purchase a property directly. Others prefer to put their money in an investment fund, such as SOCIMI in Spain. This option allows those with little money to participate in real estate investment. Renting or flipping properties are also common practices.
Direct investment in property also requires a decision between commercial, residential, or land. This will depend on your plans for the property.
You should choose the investment option that lines up with your budget, interests, and goals.
Step 4: Ask for Guidance
You must prioritize the importance of finding the best support system available as you take this financial step. Bring in the experts! You want to get the most out of your investment and the professionals know how to get the job done.
A good representative should be able to collaborate with you throughout the process. You should be aware of the complicated laws, contracts, and taxes involved in the process of investing in real estate in Spain. This information should be clearly communicated to you in your own language, so that you know exactly where your money is going. Lexidy’s experienced lawyers have a good reputation of being easy, accessible, and efficient. Every lawyer at the firm speaks multiple languages so that important legal information about foreign investment can be translated into the language you know and understand.
These lawyers can also perform due diligence. This action will ensure that the property of interest is of the correct size and location, under the correct ownership, and debt-free.
Step 5: Obtain an NIE and Arrange for Power of Attorney
Real estate investment in Spain requires a Número de Identificación de Extranjeros, or NIE, which is simply used to register with the Spanish tax authorities. You must be physically present to apply for your NIE number and allow a few weeks for processing and finalizing. If you are not able to make it to Spain to visit a foreigner’s office or national police station, there is a popular alternative. Many foreign investors choose to arrange a power of attorney so that their legal representative in Spain can act on their behalf to gather all of the necessary documentation and credentials. This makes investing in real estate in Spain much easier to do remotely.
Step 6: Mortgage
If you are planning on getting a mortgage, begin the process as soon as possible. This may take a long time to be approved. Once you have the green light, you are ready to make the seller an offer they can’t refuse!
Step 7: Make an Offer and Sign the Preliminary Contract
Now that you have everything you need, you are ready to make an offer. If the seller accepts this offer, both parties will sign a preliminary contract, or Contrato de Arras. At this time, you will put down a deposit to ensure the intention of investment. Typically the deposit will amount to 10% of the purchasing price.
This is a legally binding contract and the deposit will be lost if you do not follow through on the terms. However, if the seller backs out of the contract, the buyer will be awarded double the amount of the 10% deposit, unless stated otherwise in the document.
Step 8: Sign the Title Deed
When everything finally comes together, it is time to sign the title deed. This will officially transfer the ownership of property. This part of the process generally takes place at the office of a notary. Here, you make the legal transfer, pay the money, and receive the keys.
Step 9: YOU’RE A PROPERTY INVESTOR!
It’s official! You have successfully accomplished your goal of investing in real estate in Spain.
Step 10: Land Registry and Tax Responsibilities
As exciting as it is to own property, you now have additional responsibility. When the property transfer is made, it must be registered with the Land Registry so that the name of ownership is updated and current. As a new landowner, there are also additional taxes that you should be aware of. Depending on the use of the property, you may be reliable for different types of taxes and fees. The newly established tax department at Lexidy Law Boutique is a helpful resource for any tax-related questions about your new investment.
It’s that easy!
Each of these steps are detrimental to investing in real estate in Spain. It is important that any investor, experienced or not, has the right resources to get the most out of this life-changing decision. The perfect place to go to ensure success is Lexidy Law Boutique. The real estate department is made up of brilliant bilingual lawyers that you can trust to provide superior service and exceptional legal advise. Using the most efficient and convenient methods, Lexidy will save you time, money, and effort, as you begin investing in real estate in Spain.