How To Own Property In Spain As A Foreigner?

2/3^rd of people in Spain today own their homes; foreigners inclusive.

Did you know that as a foreigner, you can buy property in Spain without legal obstructions or barriers? Isn’t that exciting?

Unlike many European and Asian countries which restrict the ownership of land regarding foreigners, the Spanish embassies open their arms to all from far, near, and sundry to own full equity in portions of landed properties all over the country; you can read more on the official website Spain-Real.Estate.

It even gets better; you need not be a resident of Spain to be able to buy property in the country!

You can be completely domiciled elsewhere and earn equity in real estate anywhere in Spain.

Although this is great news, please be aware that there are certain prerequisites and condition precedents that you must fulfill before completing a deal over the transfer of interest over a property—for example, obtaining a Foreign Identity Number, a set of seven digits and two alphabets unique to each individual awarded.

Spanish citizens can get these ID digits in a couple of minutes, but as an ex-pat, it may take a few weeks.

Did you know that once you purchase property worth 500 000 euros and above, you can apply for a Golden Visa and get a residency permit based on that investment?

Avoiding common pitfalls

You are advised first to search the property at the Lands Registry to get a comprehensive view of its history and learn of any encumbrance that may be present over it.

You will also see the debts or any pending payment/debt deductible from the next owner.

Do involve a legal practitioner before pending your signature on any agreement because some simple terms may have hidden meanings.

How to plan your budget to purchase real estate in Spain

Buying a villa for sale sea view in Spain is a spectacular idea, but you must put your house in order by handling the fine details of proper budgeting techniques; otherwise, you may find yourself in a difficult situation.

Here are the average properties per square meter prices in major city areas of Spain.

Location/ Area	Price Per Square meter
Alicante	2,600 euros per sqm.
Spain	2,555 euros per sqm.
Andalucía	1,800 euros per sqm.
Madrid	3,810 euros per sqm.
Malaga	2,100 euros per sqm.
Murcia	1,300 euros per sqm.
Bilbao	3,100 euros per sqm.
Santander	1,900 euros per sqm.
Valencia	1,800 euros per sqm.
Catalonia	4,110 euros per sqm.
Barcelona	4,000 euros per sqm.

From the above, you can see that it will cost quite a significant sum of money to buy even a small house. So, the first question to answer is this – what is your plan to pay for the property? 

Experts advise that you try to avoid biting more than you can chew and plan your financial standing and payment plan so that it will leave no bad marks on your general well-being.

If you are taking a mortgage or paying from your savings, consider the long-term maintenance costs in your decisions to prevent future debts arising from the purchase.

Note: you need at least 20% of the property’s value handy for a down payment regardless of your payment method, whether cash or mortgage.

Property taxes for foreign home owners in Spain

Learning what property taxes your purchase may attract is part of counting your cost.

As a homeowner in Spain, you will be subject to paying three types of taxes.

Income Tax (of 24% of annual income), including Capital Gains Tax; property tax (about 21% of gains made from the sale of real estate) (of about 1% of the value of the property per annum), and Non-Resident Property Tax (about 1.2 % of the value of the property per annum).

Also, while buying a property, you may pay tax fees of about 10 – 20% of the property’s value.