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F.A.Q.

Frequently Asked Questions

What are the taxes I need to pay when buying a house ?

All property owners in Spain are required to pay three different taxes each year. If you are a resident, you are subject to Income Tax (including Capital Gains Tax) and Real Estate Tax (IBI). If you are a non-resident in Spain, you are subject to Income Tax (including Capital Gains Tax), Property Tax, plus an additional Non-resident Property Tax. Here you can find more info about property taxes.

What do you need to buy a house in Spain?

The only thing you need, in legal terms, is the NIE (Número de Identificación del extranjero). This number, which is unique to each individual, is essential to carry out any transaction in Spain. Since it must appear on all documents that you sign or are issued in Spain, you must have it before signing the deed. The NIE is not complicated to obtain, but it does take a long time; ask your real estate agent to make it easier for you to obtain the NIE in order to speed up the process as much as possible.

In addition, although it is not compulsory, having a bank account in Spain will make all the formalities easier, as it will make payments faster and will probably save you some commissions.

Finally, remember that once you are the owner of a property in Spain, you must appoint a tax representative if you are not resident in Spain.

Are foreigners allowed to buy property in Spain?

Of course! There are no restrictions on buying property in Spain, whether it’s commercial, residential or land. In fact, Spain encourages investment by foreigners, both resident and non-resident. Remember that if you buy a house worth more than €500.000 you can apply for a Golden Visa.

Do I have to pay a downpayment directly to the Seller?

Yes, that is usual in Spain. Unlike in most western countries where the down payment is paid to an escrow agent (closed account, trustee, Notary, etc.) instead of to the seller, the local practice in Spain tends to surprise foreign buyers.
Any risk can be reduced to very little with some basic reviews, for example, making sure that the time between the payment of any deposit and the final sales deed is not excessively long, making sure the seller is not a company on the verge of bankruptcy, and confirming that the outstanding amount of the mortgage does not equal the purchase price (in which case the down-payment cannot be paid to the seller because the whole purchase price has to be paid to the bank). With the right due diligence, it is acceptable in Spain to do as the Spaniards do – pay the down payment directly to the seller at the time of signing the down payment agreement.

Can I get a mortgage in Spain?

In general, non-resident buyers in Spain can enjoy the same mortgage conditions as Spaniards, i.e. up to 80% cover in the case of a first home, and between 60 and 70% in the case of a second home.

This means that you must have a minimum of 20% of the price of the available property, plus approximately 15% extra on the cost of the property to pay taxes, lawyer’s fees, notary fees, etc. In addition, your debt cannot exceed 30-35% of your income.

Other important information to bear in mind is that mortgages in Spain are normally taken out for a minimum of five years and a maximum of thirty, with the maximum age of 75 years for completing the mortgage. It should also be noted that each institution has its own risk criteria, in which the country of residence can be included, and that properties abroad are not usually accepted as collateral, as it is difficult to reach them.

Can I get citizenship if a buy a property?

Sure! Spain encourages new home buyers by offering its Golden Visa residency program.

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Calle Asival 15. Local 4

Polígono Can Valero

07011 Palma de Mallorca