How to buy a house in Spain as a foreigner?
Buying a house in Spain as a foreigner can be an excellent investment and an opportunity to enjoy the quality of life that the country offers, especially on the Costa Blanca. However, the buying process can seem complex if you're unfamiliar with specific requirements and steps. Below, we outline everything you need to know to purchase a property in Spain successfully and without surprises.
Why Buy a House in Spain as a Foreigner?
There are many reasons why acquiring a property in Spain is a great decision. Spain offers an enviable climate, world-renowned cuisine, and a relaxed lifestyle. Additionally, Spain's coasts, particularly the Costa Blanca, feature spectacular landscapes, charming towns, and abundant leisure activities.
For those looking for properties in Calpe, Altea, Dénia, or Moraira, our real estate agency offers a selection of homes that capture the best of each location. From sea views to peaceful mountain areas, there’s an option for every type of buyer.
Steps to Buy a Property in Spain as a Foreigner
To simplify the buying process, we’ve organized the key steps every foreigner should follow. This step-by-step approach covers everything from legal procedures to necessary tax considerations.
1. Obtain a Foreign Identification Number (NIE)
The first essential step for any foreign buyer is to obtain a Foreign Identification Number (NIE). This number is indispensable, as it will be required for signing the deed, paying taxes, and other legal aspects of the purchase. You can apply for the NIE at a police station in Spain or through the Spanish consulate in your country.
Due to demand and the necessity of this document at all purchase stages, we recommend starting the NIE process as soon as you decide to buy in Spain.
2. Open a Bank Account in Spain
Having a bank account in Spain simplifies the purchasing process. Payments related to the purchase, such as the deposit and taxes, must be made from a Spanish bank account. Most banks will guide you through the process, requiring your NIE and other personal documents.
Choosing a bank that facilitates international transfers and offers competitive exchange rates can save you money in the long run. Additionally, some banks have accounts specifically designed for foreign residents, making the process even more convenient.
Legal and Financial Aspects of Buying Property in Spain
Buying a house involves certain legal procedures that ensure a safe purchase protected by Spanish law. Here are the most important ones.
1. Signing the Deposit Agreement
The deposit agreement is a preliminary agreement between the buyer and the seller. Generally, this agreement specifies the terms of the sale and includes a deposit, which usually amounts to 10% of the total property price. This deposit ensures that the property will be removed from the market while the remaining procedures are completed.
What Happens if One Party Fails to Comply?
If the buyer withdraws after signing the deposit agreement, they lose the deposit. If the seller fails to comply, they are usually required to return double the deposit.
2. Public Deed and Property Registration
The purchase is formalized in the public deed, which must be signed before a notary. Once the deed is signed, the new owner must register the property in the Property Registry. This procedure is essential to ensure ownership of the property.
Costs Associated with Deed and Registration
Additional costs to consider include notary fees and property registration costs. These costs generally represent a percentage of the total property value and vary by autonomous community.
Taxes When Buying a House in Spain as a Foreigner
As a foreign buyer, it's essential to be aware of the taxes associated with purchasing property in Spain.
1. Property Transfer Tax (ITP)
The Property Transfer Tax (ITP) is a tax that must be paid when buying a second-hand property. The percentage varies by autonomous community but typically ranges from 6% to 10% of the purchase price.
2. Value Added Tax (VAT)
For new properties, the buyer must pay VAT, which is 10% of the property value. Additionally, the documented legal acts tax (IAJD) must be paid, which generally represents a small additional percentage.
Our Real Estate Agency on the Costa Blanca: At Your Service
At our agency, Century 21 Evolution, we specialize in offering quality properties on the Costa Blanca, with prime locations in Calpe, Altea, Dénia, Moraira, and beyond.
Our team of advisors is prepared to guide our foreign clients through every step of the buying process, ensuring they find their dream home safely and efficiently.
Buying a property in Spain as a foreigner may seem complex, but with the right guidance and careful planning, it’s a completely achievable goal. Contact us to learn more about our properties for sale and discover why so many foreigners have chosen the Costa Blanca as their home.