Although there have been many stories of corrupt property deals which have led to unfortunate buyers losing their homes in Spain, the property buying system in this country is actually quite straightforward and transparent.
When you decide you would like to purchase a property the regular practice is to pay a small deposit in the region of around 3,000€ so the seller removes the property from the market while legal procedures go ahead.
All buyers need to engage a lawyer (If you decide to use our services we can do that on your behalf should you prefer). The lawyer will request the “Nota Simple” which is a restricted version of the title deeds or “escritura”, and then go about drawing up a draft contract.
Because most property buyers from overseas need to arrange for funds to be transferred, or possibly obtain a Spanish mortgage, there is usually a waiting period of around a month. At the end of the month the buyer and seller will sign a private contract agreed on by the lawyers of both parties. Upon signing this contract the seller will pay a deposit of 10% of the agreed selling price, minus the amount already paid for the reserve deposit.
This contract is binding and should the buyer default, the seller is permitted to keep the 10%. If the seller decides to renegade on the agreement, he is required to double the amount he has received and return it to the buyer promptly. We always make sure this important legality is specified in the private contract before our client signs.
After signing the private contract there will usually be a period of around 6 to 8 weeks before completion. All property purchases in Spain must take place in a notary’s office with both the seller and purchaser present and their legal representatives.
The signing process usually takes around an hour. The title deeds will be signed and keys and monies exchanged.
Yes, you will be liable to pay Hacienda, the Spanish tax office 25% of the net rental income. We can help you with your property income taxes and make sure you follow the correct procedure to avoid fines.
In 2012, the Spanish government announced the changes in law regarding property purchase incentives for non-EU nationals – the long-awaited “Golden Visa”. This allows non-EU residents to purchase property in Spain and automatically receive a Spanish residency permit allowing them to travel within the European Schengen area for three months out of every 180 days, and travel to and from Spain freely.
The purpose of this incentive is to stimulate investment from foreign entrepreneurs. However rich investors from countries such as China and Japan need to be aware that some agencies are hiking up property prices using the Golden Visa as a reason for the elevated values.
Because obtaining the Visa is now merely a formality for those who meet the criteria, investors need to make sure the property is a sound investment rather than focusing on the Visa as a reason to purchase a property that is not a solid investment.
We have worked with a number of non-EU clients and help them secure excellent investment properties during the last two years, so please don’t hesitate to get in touch with us if you’re from a non-EU country.