Over the past decade, after the subprime world crisis, the Spanish property market has grown steadily surpassing 2008 figures, year when historically reached its maximum prices.
Although the economic slowdown caused by the COVID pandemic, apartments in big cities such as Barcelona or Madrid and luxury properties will keep its precrisis value and even grow in a few months just as before, roughly a 6 % annually according to the Banco de España.
Is now a good time to invest in real estate market in Spain?
Spain is the second most visited country worldwide. 83 million visitors came to Spain in 2019 making it the second destination after France.
Properties in Barcelona or Madrid benefit from being big economic hubs and also by its touristic attraction.
Also unique and luxury properties in coastal areas make a good investment even for personal enjoyment as main residence or vacation destination.
Also rentals can expect a 4 % profit annually.
Therefore we can say it’s always a good time to invest in real estate property in Spain.
Steps to buy a property in Spain?
First of all shop around to decide which property can most fulfill your needs in terms of main residence, holidays destination, renting,..
Once you have chosen your perfect property, through specialized websites like idealista.com, fotocasa.es, or alike or a local real estate agency you need to know some basic legal issues:
- Obtain a NIE (Foreigner Identity Card) and a bank account number.
- Sign a reservation or deposit contract (Earnest money agreement). Normally the deposit is a 10 % of the property value. The contract is not binding but the deposit is committed.
New properties: 10 % VAT. Normally it’s shown included in the price.
Used properties: 6-10 % ITP.
Notary expenses: in every real estate property a notary public signs the deed of sale in the presence of both seller and buyer in order to keep Spanish legality. The cost is around 1.000 €.
Land registry fees: Around 500 €.
Do I need a lawyer to buy a property in Spain?
Legally it is not compulsory to have the legal assistance of a local lawyer when acquiring a real state property in Spain.
However it is highly recommendable to have legal advice for several reasons:
- The lawyer will help you through the process revising all documents and contracts.
- The lawyer will study the land registry files of the property in order to ensure that there are no risks in the real estate operation that compromise your economy.
- In case of getting a mortgage the lawyer can get you a trusted bank with normal rates.
- The lawyer will assist you in the legal and tax issues that can arise in order to fulfill EU capital requirements regulations.
- The lawyer will study if you are entitled to get tax reductions by meanings of your age or nationality.
Can I obtain Spanish (EU) residency through the ownership of a property in Spain?
As long as you are not a EU card holder, it is possible through the so called Spanish Golden Visa, which permits to be entitled to be the holder of a Visa to enter and leave freely Spain within one year It can extend also to your family.
The Golden Visa is granted to those who buy one or more properties for an amount greater than 500.000 € in an unlimited period in accordance with current Spanish law.
The funds to acquire the property have to be made effectively from your country of origin.
Once in Spain you should apply for a Spanish residence permit in order to live permanently.
Contact us if buying a property in Spain and need dully legal advice.
Written by: Albert Ramentol