I am a foreigner, European, British, or citizen of a third country that is not part of the EU.
What are the steps to living and acquiring a real estate in Spain?
Today we answer all those frequently asked questions that our clients from abroad issue at their first consultation. Securing that the business of a lifetime, enjoying retirement in Spain, should be done in a safe and legal way.
Who can help along the whole pursuit?
Your lawyer should speak Spanish and your native language. Carrillo’s multilingual team of experts speak English, German and French, although our experience and that of our professionals takes us to distant countries such as China and Africa. Just reach out for us; we will be right next to you.
If you do not want to engage a lawyer, then we recommend approaching a Notary, at least. Here is the link to the official website of notaries in Spain. https://www.notariado.org/portal/elige-a-tu-notario
What is the first step?
Get your NIE (Foreigner’s ID number). You can either resolve this directly through our website; make your request and our International Department will assist you in this process. The NIE identification is mandatory for compliance of the purchase-sale contract, and for other administrative procedures, such as for paying the corresponding taxes. Another option is applying for the NIE at a police station in Spain or at the Spanish embassy in your country, presenting form EX-15. The ID will be assigned immediately. Download the form: https://extranjeros.inclusion.gob.es/ficheros/Modelos_solicitudes/mod_solicitudes2/15-Formulario_NIE_y_certificados.pdf
Once you have chosen the property and agreed the price, then it is time to
Open a current bank account in Spain
Proving that the money comes from a foreign account is compulsory to comply with the Spanish Law against money laundering. To do this, you will need your personal data and a registered address in Spain. Our proposal: if you already have a deposit contract for the purchase-sale, then you may use that address. If you are unable to travel, a special power of attorney to your lawyer will allow opening the bank account. The activation of the bank account in Spain will enable making transfers from origin, for the payment of the purchase, or the completion of the mortgage, as well as the payment of taxes and utility bills, etc.
What is the main legal aspect?
The verification of the property in the PROPERTY REGISTRY. The issue of the “SIMPLE NOTE”, grants a legal vision of security, solvency and guarantee of the operation, and the cost will be less than 10 euros. Here’s the digital application in the public body in charge in Spain for that purpose: https://sede.registradores.org/site/invitado/propiedad/busqueda?nr=true#noback
The contract
We recommend that both, the seller and the buyer, draw up terms for both parties’ intentions in a clear way. Agreements on deposits, rentals with option to buy, mortgages, reciprocal guarantees, conditions of termination, aso. should be fixed in the contract. A lawyer will defend your interests, independently if you are the SELLER or the BUYER. Difficulties in understanding the often-confusing technical language are another reason for hiring a lawyer.
Is it compulsory to sign before a NOTARY?
The Spanish legislation underlines that Title Deeds of properties must be signed in front of a notary. This is a guarantee against third parties and it is mandatory for payment of the corresponding taxes. In the case of foreigners, the titles shall be arranged by your multi-lingual lawyer so as to allow the notary’s issuance in a two columns format offering both languages (Spanish and your native language). Carrillo will be delighted to help with these arrangements. Another frequent question asked is: who chooses the notary? In cases of purchase and sale, the one who pays most of the fees, in this case the buyer, is the part appointing the notary. This right is important when it comes to agreeing a mortgage, too!
The CADASTRAL update
Registries related to the ownership of properties may be used for updates of metric information, content, dimensions, new directives applicable on rustic properties, aso.
Processing the payment of taxes
This part gives many headaches to foreigners who frequently are not familiarized with the tax burden in Spain, both national and local, and the processing. Here we offer some key-takeaways, but remember that our Tax Law Department will be pleased to manage this burden for you:
ITP (Impuesto Transmisiones Patrimoniales => Transfer tax on resale property purchase): from 6 to 10%, varies from region to region. It applies when acquiring a second hand property.
AJD (Actos Jurídicos Documentados => Legal document tax, stamp duties): between 0.5 and 1.5%.
IBI (Impuesto Bienes Inmuebles => Property tax): annual local tax, which depends on the cadastral value, usually about 0.4 and 0.5% of this value.
PLUSVALIA (Local property tax, appreciation): each regional council sets an annual percentage increase in the cadastral value up to a maximum of 3.5% per year.
FEES and Tariffs, Notary fees: 0.03 to 0.45%. Registration fees: 0.02 to 0.18%.
IVA/VAT (Impuesto Valor Añadido => Value Added Tax): 10% of the value of the property. Only applies if you buy a new house.
Mandatory requirement: the ENERGETIC CERTIFICATE of the property
A certification issued by a qualified authorizing technician for the energy valuation of the property is mandatory since 2013. This form must be attached to the set of documents. Do you need a hand on this? We will be happy to assist you!
Other recommendations
If a private individual sells the property, then we suggest not cancelling the energy supply contracts; simply ask the seller to provide the most recent invoices and change the ownership. If the property is integrated in a community of several owners, then a certificate showing that the property is up to date with payments is needed; otherwise, the debt will be transferred to the new purchaser.
If a promoter sells the property and it is an off-plan purchase, then we recommend you to have a look at the building and construction specifications, delivery dates, penalties, responsibility for defects and visible defects in the finishes. Considering these aspects for the signing at the notary's office may help to avoid headaches, at a later date.
Finally yet importantly, all that paperwork can certainly be accomplished by yourself; but if you do not want to waste time waiting at public administrations, long queues and the pursuits related to applications or tax burden seem too complicated, then do not hesitate to reach out for Carrillo Asesores. Our Legal and International Department will be your trusted partners to support you enjoying the well-deserved rest earned throughout your life, and the keys to your dream-home.
