Since Spain is a part of the EU it makes it easier for you as a foreign buyer to invest in real estate in the country. There are certain points and procedures that will take place when you buy a property in Spain. These are summarized below.
• In order to make sure that the property is genuine and belongs to the seller, the document “Nota simple informativa” provided by the Property Registry (Registro de la Propiedad) will be your “evidence”. The document further states if the property is free of debt and gives a detailed description of the property, in order for you as a buyer to be sure of what has been told to you by the seller corresponds with the information in the document.
• Until the public deed of the purchase of the property is ready, a pre-agreement contract is made between the buyer and seller. This agreement simply states that the seller is selling the property to the buyer, and the buyer states that he/she is buying the property to a price and conditions agreed upon. When this pre-agreement is set the buyer gives a certain percentage of the price to the seller. Mostly in Spain this kind of agreement is that if the buyer backs out of the contract, he/she loses the deposit and if the seller backs out the buyer is paid the double. Although this is the typical kind of agreement in Spain the buyer and seller can use a different type of agreement.
If you intend to get a mortgage from a bank in Spain, the following documents has to be provided:
- DNI/NIE (identification document)
- Contract of employment
- Previous paychecks, last 3 is normally sufficient
- Latest income tax return
- The pre-agreement
- Proof of payment of the property tax (IBI)
- Documentation pertaining to any other possible loans/mortgages
- Property titles (Spain and overseas)
- Certificate of previous employments (from work authorities)
- Documentation of other assets (bank/mutual fund statements)
- Prenuptial agreement (if present)
- Non-residents of Spain have to provide a document of non-residency which you can get at the bank
- If you are self employed: Local tax on economic activities
- If not self employed: payment proof of VAT for last year and trimester
By getting a mortgage in Spain you have to get an appraiser (tasador in Spanish), this is a requirement from the bank so they will be ensured that the loan given to you is safe. You are responsible of paying the appraiser which is usually an amount of between 300-500 Euros.
• The transfer of the property must be done by a notary. The notary reads the deed of purchase and when both the seller and buyer have agreed on the contents of the deed it is given to the buyer. When signed by both parties and by the notary, the deed will be presented for payment of taxes. Following documents must be provided to the notary:
- Proof of identy (or power of attorney) from both seller and buyer
- Title of property from seller
- The buyer´s payment
• If the seller of the property is an individual, the buyer pays 6% (7% in some regions of Spain) of the price. Other taxes may apply, for more specific information get in contact with a specialist in the field.
Note that this is only a short summary of the conditions that apply when buying a property in Spain. We recommend you get in touch with an English speaking Real estate agent specializing in foreign buyers who can guide you through potential pitfalls.
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