Spain is a country with an excellent climate and gastronomy, which has spectacular areas, both on the beach and in the mountains. This means that there are many foreigners who want to both to move indefinitely and to come on vacation.
House price in Spain
The real estate market in Spain presents great opportunities. And that is true for both foreign investors and expats looking to settle in the country with their families. After the 2008 crisis that completely devastated the real estate sector in the country, the general market situation has since improved.
However, the Spanish real estate market is very special. Like the entire national territory in general, each region functions differently, and it is necessary to be aware of the nuances and differences that arise between the different autonomous communities and their regions. For example, if you want to buy a flat, it is crucial to know where to find the best deals, since in cities like Madrid or Barcelona the rents are too high.
The price per square meter can vary a lot depending on the area of Spain in which you want to buy your house. The average price of housing in Spain is around 1,886 euros per square meter. If you do not want to invest a lot of money, you should stay away from the big capitals and the most touristic areas. The cheapest cities in Spain to buy a home are usually located in inland areas.
Can a foreigner buy a house in Spanish territory?
Yes, any foreigner can buy a house in Spain. However, there is a difference. In case you are not a Spanish citizen, you will have to take an extra step before the purchase.
The first thing you should do is get your NIE number. It is the basic identification number that all foreigners must obtain once they enter the country. Furthermore, we must make a distinction. Well, depending on your country of origin, things will be different:
If you are from the European Union
If you are from a European Union country, there are two types of NIE available:
- The temporary NIE number, for those individuals who do not want to live in Spain. For example, if you plan to visit the country to make the sale only (and leave later) this will be the type of identification that you will have to request.
- Conversely, the resident NIE (a permanent one) for those who really want to stay in the country long-term.
If you are a non-EU citizen
On the other hand, let’s say you are a non-EU citizen. Then:
- You can request the resident NIE number if you are a resident in the country (if you live in the country more than 183 days a year).
- Non-resident NIE, if you do not live in Spain but would like to buy a property in any way.
Steps to buy a home in Spain
Once you’ve found a property that fits what you’re looking for, it’s a good idea to go and see it in person. Remember that you must obtain the NIE to formalize the purchase-sale documents and follow the following steps:
- Negotiate the price with the seller.
- Check that the property belongs to the seller and that it is free of administrative charges or mortgages. You can do this by requesting a report at the Land Registry.
- In some cases, you can sign a deposit contract and pay a percentage of the final price as a deposit. This document is an agreement by which both parties undertake to finalize the sale in the near future. The usual price of the signal or deposit is usually 10% of the house.
- Sign the purchase-sale contract and pay the rest of the amount.
- Register the property in your name and pay the corresponding administrative expenses.
Remember that to make the payment of the house and the expenses derived from the purchase, it will be very good for you to have a bank account in the local currency of Spain.
What are the administrative costs for the purchase?
When buying a house in Spain, you will have to pay up to 12% of its value as administrative costs for the purchase. If the transaction is carried out through a real estate agency, the fees of this will be borne by the buyer. Here is a detailed list of the expenses you will have to face:
- Property Transfer Tax (ITP): from 6 to 10%, depending on each Autonomous Community. It is only paid when acquiring a second-hand home.
- Value Added Tax (VAT): 10% of the value of the property. Only applies if you buy a new house.
- Tax on Documented Legal Acts (IAJD): between 0.5 and 1.5%
- Notary fees: 0.03 to 0.45%
- Registration fees: 0.02 to 0.18%
How long does it take from start to finish?
Being aware of the duration of the whole process is important in order to plan everything perfectly. As we have seen, the process consists of several phases.
First, what you should do is find the house that is ideal for you and the one that suits you. That is, the one you want to buy as a final goal of this process. This search usually lasts from about 3 months even up to a year, depending on the buyer’s demands.
When performing this search you must take into account several aspects, such as the city or the town where the housing is located, the surroundings, and how close you will be to places like public transport, shopping centers, hospitals, etc. Once you have located your ideal house, the proper trading process will begin. This can last from 2 to 3 months until you finally receive the keys (see the previous section).
But you have to keep in mind that this process will be extended more if you decide to request a mortgage. If this is the case, you must add a few more weeks, since the bank requires time to verify and prepare the necessary management.