How to Buy a House in Spain if you are a Foreigner
11/07/2022

Would you like to have a house in Spain but you live abroad?

If you are thinking about moving and coming to the south, I recommend that you read to the end to find out everything you need to know before living here. This process may seem longer and more complicated than it should be, so this article can be of great help to you.

Before you start you must decide the area where you would like to live not only in which city but also which part of the city best suits your lifestyle, because it is not the same to look for a central place close to everything than a quiet place away from the center. So you will have to be clear about the area that best suits your needs, for this we advise you to ask local people or ask for advice to instruct you on the area in the local real estate that gives you more confidence.

This process depends on you and how clear you are about your ideas, so the estimated time is the one you consider necessary.

Once you have chosen the area and the house you were looking for, the process of buying the property will begin, which can take between 2 to 3 months until you receive the keys to your home, but if you have the money there will not be so many obstacles in the process, but if you need a mortgage this can delay the sale process for another week.

It is important that you take as much time as you deem necessary to make sure you choose the right steps in the process and do it in advance in case there are any inconveniences during the process.

What are the steps to follow to get a property in Spain?

Get NIE
The first and most important step to be able to buy your new home in Spain, since it will serve to identify you in the purchase and sale of the property and to be able to pay the corresponding taxes.

This process can be done from abroad (at the Spanish embassy in your country of origin by presenting the model EX15) or from a police station in Spain.

There are 2 types of NIE for these cases:
- Non-resident NIE: If you are going to buy the property but you are not going to live in Spain, cited as a non-EU citizen.

- Resident NIE: if you are going to stay more than 183 days a year regardless of whether you are an EU citizen or not.

It is advisable to get advice on obtaining a NIE to investigate your case and see which one best suits your needs, as many of the procedures can be somewhat tedious and various obstacles can arise that can be resolved quickly by an expert.

Have a bank account
This step is not mandatory but it is advisable to expedite the sale process.
 Once you obtain the NIE we recommend you to create a bank account to cover all the expenses that may be involved in buying a new property, such as notary fees or associated costs.
Having the money abroad can create delays and some extra hurdles.

Negotiate the price with the seller
Before negotiating with the seller, you must be very clear about the REAL market price in order to have proof that the property is worth the price you have investigated. If you only have an ideal of the price in your personal opinion, it will not serve as proof to convince the seller. Anyway we advise that if you have difficulties to negotiate consult with real estate agents who are the experts and can help you to get the price you want.

Reservation contract
If you already have a clear idea of the price, the house, the area...congratulations, you already have one of the most important parts of this process.
Now all that remains is to make your decisions and tie up the loose ends. If you have enlisted the help of real estate agents or the property is managed by a real estate agency, a reservation contract must be drawn up to fix the sale price and confirm that it will be taken off the market. To do this you must leave a reserve of 6.000€ to prove that you are really interested in buying the property. This is not necessary if it is a direct purchase between individuals.

Deposit agreement
This contract is the most important, as it really shows a real interest in buying the property at the agreed price. For this you will have to pay a part and thus confirm that you are really interested.

Two things to keep in mind:
- The earnest money is usually 10% of the agreed price from which the 6.000€ of the reservation you made will be deducted (If you finally do not decide to buy it for reasons other than those agreed you will lose the 6.000€ of the initial reservation).

-The duration of the contract, we recommend you to establish a term of 90 days if you are looking for a mortgage, this will give you time to choose which mortgage to contract.

Keep in mind that if you finally do not decide to buy the property, you have signed and paid the earnest money contract and you will lose the reservation money. And if the seller changes his mind and finally does not want to sell you the house, he will have to pay the amount you gave for the reservation.

Necessary documents
The next step is to gather all the necessary documents to prepare for the day of the signing before the notary, so that no last minute unforeseen events arise.

- Nota Simple: It is the document that specifies the characteristics of the property, who were the owners, if it has debts, seizures or mortgages. Although this document shows most of the properties of the house, it is important to make sure if it has any extra trava to avoid unexpected surprises.

-The public deed is a certificate of proof that the property is owned by the owner and not by someone else. And it is the one that you will sign before a notary.

- It is also advisable to investigate if you have any other debts in the last 3 years because once it is in your name you will be the one to take care of those debts.
It is important to hand in all the documentation before the notary so that he can check that all the documentation is in order and that there are no missing documents and so that you do not lose time before the notary.

Go to the notary to sign the deed
One of the last and most important parts of this agreement. In this part the notary will explain all the conditions of the contract that you are going to sign so that you know what you will sign.

All parties involved in this process, both on the seller's side and on the buyer's side, such as lawyers, real estate agents, etc., will be present at the signing of the contract.

Once the deed has been signed and all the important points of the contract have been discussed, the keys to your new property are handed over to you.

Register your property
Congratulations, because at this point it is officially your property and as such you must register it in the land registry to prove that you are the new owner of the property, for this you will have to pay the transfer tax and the stamp tax.

In theory this property registry notifies public services of the change of ownership, but as it is a process that takes a long time we recommend that you do it yourself, as it can take up to a year to make this change of ownership in electricity, water, gas, etc...

Taxes when buying a home

- ITP (transfer tax)

- I.V.A this tax is higher in new properties since it is 10% but if this is going to be your main residence and the property is less than 32 years old this tax is reduced to 5%.

- Property registry costs equal to 1.5%.

- Notary fees

Advantages of buying a home in Spain if you are a foreigner
If you invest in real estate worth 500.000€ you can obtain residency for 2 years and this residency can be renewed, allowing you to live and work legally in Spain.

The best thing about this permit is that you can come without having to stay for a long period of time, just coming to Spain once a year is enough.

Remember that all this procedure can be done with the help of experts to avoid obstacles in the process and get what you want without surprises. If you live abroad most of the steps can be done without having to travel to Spain, through a good real estate agent or lawyer you trust.