Can foreign nationals buy a house in Spain?
Yes, foreign nationals can buy a home in Spain. All you need to get is your NIE number which will be your identification number in Spain. You do not have to be a resident of Spain to get your NIE number.
Can foreign nationals get mortgages from Spanish banks?
Yes, foreign nationals can get a mortgage, usually up to 70% of the value of a property. Contact us at Edward & Partners if you need help with which bank to contact.
What taxes and fees do I need to know about when buying a property in Spain?
1. Transfer tax
The transfer tax applies to properties (villas, apartments, land, commercial premises, garages), provided that the seller is not a property developer or runs a business with properties (VAT-exempt). The tax for a property is usually between 8–10% in addition to the agreed price of the property.
The transfer tax is currently being reduced to 7% in the region of Andalusia.
2. VAT
VAT, called IVA in Spain, must be paid for all villas and apartments (or garages that are connected to an apartment) where the seller is a property developer, marketer or conducts business with real estate. In other words, VAT must be paid when a home is sold for the first time. In addition to VAT, stamp duty must be paid for the issuance of legal documents. This is normally about 0.5% of the purchase price but can be 1.5% in some regions.
VAT is 10%.
3. Notary fees/acquisition costs & registration fees
In most cases, the notary fee is between € 500 and € 800, depending on the value of the property and how many pages the purchase agreement has. If you have applied for a mortgage for the property, you will also have to pay the notary fees for the title registration that is linked to the mortgage. Title registration fees are in most cases between € 300 and € 500.
4. Legal costs
Most lawyers charge about 1% + VAT of the agreed property price. This can be negotiable for more expensive properties. Some charge per hour while others offer a fixed fee.
5. Mortgages
If you take a bank loan in Spain to finance the purchase of your home, the mortgage will be subject to a stamp duty of between 0.5% and 1%, depending on the area in which the property is located. The bank granting the loan will also require a property valuation when the deal is done. This costs between € 300 to € 500. Most banks also charge a start-up fee of about 1% of the loan amount.
What is the process when buying a property in Spain?
1. Finance / Financing
Make sure you have a clear plan for how to finance the property.
2. Find the right property for you
Contact Edward & Partners to get a curated list of items that interest you and schedule the shows together.
3. Legal representative
We recommend that you hire a lawyer to assist and take care of all legal aspects of the sale.
4. Reservation
Have you found your dream home? Then it’s time to place a bid and agree on a final sale price.
5. Private purchase contract
Both the seller and the buyer sign a private purchase contract and 10% of the agreed price for the property is paid to the seller.
6. The last step
On the day of the notary, you will receive the new documents for your property and the keys will be handed over. Welcome home!