Tag Archive for: Buying Property

Opening a Bank Account in Spain

When you are thinking about relocating, starting a business or buying property in Spain, one of the things you will think about is a Spanish bank account, and how this will work. In this article, we will explain all you need to know about Spanish banks and how to open a bank account in Spain.

Why open a bank account in Spain?

There are many reasons why you might need a bank account in Spain. Even if you are not planning on living in the country, having a Spanish bank account can be useful if you are planning on buying property or investing in a business. A bank account will also allow you to easily transfer money between Spain and your home country.

If you are planning on living in Spain, then a bank account is almost essential. You will need a place to store your money and to receive your salary. A bank account will also allow you to easily pay your bills and make other purchases.

Opening a bank account in Spain

Is having a bank account a requirement in Spain?

No, having a bank account in Spain is not a legal requirement. However, it is generally advisable to have one, especially if you are planning on living in the country.

What do I need to open a bank account in Spain?

To open a bank account in Spain, you will need the following documents:

  • Identity documents (such as a passport) should be shown.
  • Address: A copy of a bill with your current address must be included.
  • Employment documents: A document that establishes your work status (for example, a student card, employment contract, or unemployment documentation)
  • NIE number (Spanish foreigner identification number) – If you are a Non-Resident.

Some banks may require additional documents, so it is always best to check with the bank in advance.

How to open a bank account in Spain?

The process of opening a bank account in Spain is relatively straightforward. However, it is important to remember that each bank has its own requirements and procedures. It is always best to contact the bank in advance to find out what is required.

In most cases, you will need to make an appointment with the bank and then go into a branch to open the account. During the meeting, you will be asked to provide the documents listed above. The bank will then run a credit check and, if everything is in order, will open the account for you.

Some banks may require that you open an account with a certain amount of money. Others may offer special deals or bonuses if you open an account with them. It is always best to shop around and compare different banks before making a decision.

Types of bank accounts in Spain

There are several different types of bank accounts that you can open in Spain. The most common are:

  • Current account: This is the most basic type of account and is used for everyday transactions.
  • Salary account: This account is specifically for people who receive their salary in Spain.
  • Savings account: This account is used for savings and typically offers a higher interest rate than a current account.
  • Fixed-term deposit account: This account is used for savings and offers a higher interest rate than a current or savings account. The money deposited in this account cannot be withdrawn for a set period of time.
  • Pension account: This account is used to receive pension payments.
  • Youth account: This account is designed for young people aged 18-25 and typically offers special deals and bonuses.
  • Non-Resident account: This account is for people who do not live in Spain.
  • Digital account: This account is an online-only account with no physical branches.

What are the bank fees associated with bank accounts in Spain?

The fees charged by banks in Spain can vary depending on the type of account and the bank itself. However, there are some general fees that are common across most banks. These include:

  • Account opening fee: This is a one-time fee charged when you open a new bank account.
  • Yearly fee: You’ll pay around €12–15 for a debit card and potentially more than €30 a year for a credit card with many Spanish bank accounts.
  • Banks charge a fee to send money to other countries. In Spain, this fee can range from €3-15 if you’re sending less than €50,000.

How long does it take to open a Spanish bank account?

It usually takes between one and two weeks to open a bank account in Spain. The process can be started online, but you will need to go into a branch to complete it and provide the required documents. You may also be asked to provide additional information, such as your reason for opening an account in Spain. When you have opened your bank account you may need to wait a few days for your debit card and credit card to arrive in the post.

Types of banking services in Spain

Spanish banks offer a wide range of services, from savings and checking accounts to loans and investment products. In addition, many banks offer special services for businesses, including business accounts, merchant services, and loans. Most banks also offer ATM and debit card services, as well as online and mobile banking.

However, some services, such as credit cards and international money transfers, may be offered by only a few banks. To find the right bank for your needs, it is important to compare products and services to find the best fit. With so many options available, Spanish banks offer something for everyone.

Overview of Banking in Spain

  • The Banco de España, Spain’s national bank, also serves as the financial regulator.
  • The top four banks in Spain by assets under management are Santander, CaixaBank Banco, BBVA, and Sabadell. These five banks account for around 70% of the sector’s assets.
  • Santander is such a big bank it is under re-capitalization pressure from the ECB.
  • A number of these banks also have a strong international presence, with branches or subsidiaries in several countries. For example, Santander has branches in the UK, Brazil, and the US, while BBVA has a presence in Mexico, Colombia, and Uruguay.
  • There are currently 141 private banks (including around 80 foreign-owned banks), as well as several cooperative and savings banks, in the country.
  • The banks in Spain hold a lot of real estate assets as a result of the 2008 financial crisis.

Currency in Spain

The currency in Spain is the Euro (€). Euros are divided into 100 cents. There are eight different coins: 1, 2, 5, 10, 20 and 50 cent coins, as well as 1 and 2 Euro coins. There are also seven different banknotes: 5, 10, 20, 50, 100, 200 and 500 Euros.

Opening a bank account in Spain

Opening a bank account in Spain

ATM in Spain

In Spain, you can find ATMs (cajeros automáticos) in almost every town and city. They are very convenient when you need to withdraw cash, and most of them accept foreign cards. However, there are a few things to keep in mind when using an ATM in Spain. First, make sure that the ATM is affiliated with your bank. Second, be aware of your surroundings, as ATM thefts are not uncommon. Finally, remember that Spanish ATMs dispense euros, so if you are withdrawing cash from a foreign account, you may incur fees. With these things in mind, using an ATM in Spain can be a quick and easy way to get the cash you need.

A word from SublimeSpain

In conclusion, opening a bank account in Spain is a crucial step to take if you are considering relocating, starting a business, or purchasing property in the country. With the right information and documentation, the process can be straightforward and efficient. By understanding the various types of accounts and services offered by Spanish banks, you can choose the one that best suits your needs and preferences. Whether you are a resident or a non-resident, opening a bank account in Spain is essential for managing your finances and making the most of your time in this beautiful country.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Escritura: The Noterial Property Deed in Spain

The Escritura, or property deed in Spanish, becomes relevant during the property buying and selling process in Spain. It is an essential document for the transfer of absolute legal ownership from the original property owner to the purchaser. The formal document states who owns the property, and also provides a summary of the property. The Escritura defines a particular property whether residential or commercial. Next to this, it contains the changes in the ownership of the property.

For properties that form part of a community of owners, the property deed includes information about the community of owners. It will also state who is the administrator of the community, with the relevant contact and bank account details. When you buy a property, you need to change the ownership details in the property deeds.

The Escritura and the Catastro

As discussed above, the Escritura or Spanish property deed describes a given property, including details regarding the property owner. On the other hand, the Catastro (Spanish Cadastre or Spanish land registry) is a comprehensive register of all properties within the Spanish border.

You can check the Catastro for details regarding the number and location of all plots or parcels of land in Spain. Other profound information contained in the document includes boundaries, the position of the property, the class of the land, property size and the name(s) of the property owner.

When it comes to finding property ownership, the Spanish land registry is the only public department in the country that has those rights. In this regard, you can only register an Escritura in the Spanish land registry.

Get the help of a Property Lawyer in Spain, contact SublimeSpain.

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Selling your property in Spain

How important are property deeds in Spain?

Simply put, the Escritura is the only documentation that fully secures the ownership of a property in the eyes of Spanish law. It’s worth noting that failure to transfer the property to your name means that you are not the legal owner.

The importance of having correct and up-to-date documentation for your property cannot be overstated. There are many costs involved when buying a property, but by purchasing a property without a proper deed, you will also potentially be opening yourself up to a lot of legal issues.

Property deeds transfer in Spain

Before a Spanish Notary the process of transfer and signing of the property deed is done. Thereafter, the owner gets the property rights and can manage it as his/her own. We highly recommend consulting qualified professionals such as SublimeSpain to guide you through the entire process and ensure proper due diligence.

The Escritura is one of the most critical documents when purchasing property in Spain. It’s thus not surprising that all the parties (buyer and seller) must be present in-person to sign the property deed before the Spanish Notary. However, this can be exempted by either one or both of the parties arranging a Power of Attorney. In such cases, the representatives must all be present before the Notary. If you can’t be present, you can give us Power of Attorney, and let us take care of your property purchasing or selling.

When transferring a property deed, the parties must have a Spanish ID or passport to confirm their identity. On the appointment day, the Notary confirms all the relevant documents. Also, he/she confirms the payment that is made by the buyer to the initial property owner. The Notary then hands out the deeds for signing, only if there are no objectives from either of the parties.

After signing the property deeds, the Notary stays with the original documents for a few days. During this time the property is appropriately registered in Land Registry. The property deed transfer process is very straightforward. However, the in some cases it may take a longer process due to non-compliance with relevant regulations, permits, licenses, charges, and taxes. In case you lose your Escritura copy, you can request another one from the Notary, which typically takes a few days.

Updating Spanish property deeds

Whether you are a local or foreigner owning property in Spain, it’s critical to make sure that your property deeds are accurate. The description of your property registered at the Spanish land registry should match the actual nature of the property on the ground. When buying or preparing to sell your property, you should do proper due diligence. Confirm the registration of the actual property on the ground. This is properly done with the help of a lawyer.

After some time, extensions and changes to a property can mean that the relevant deeds are outdated. The property deed update process entails four items: Services of an architect, services of an asesoria, a Town Hall visit and a trip to the Notary office.

Before the completion of the property changes, the update of the property deed should be done. This prevents possible hurdles when selling your property in the future. Some of the updates you should provide in property deeds include:

  • Adding a swimming pool
  • Property extension
  • Applying for further planning permission
  • Registering a well or borehole
  • Additional accommodation, e.g. bedroom, dining room or bathroom
  • Storage room
  • Garage

At SublimeSpain, we work closely with local and foreign clientele to buy, sell, and update their Spanish property deeds. We will register properties at the Spanish Land Registry and Catastro Registry properly. We will help you make more informed decisions concerning your property documentation. Contact us for a detailed description of our services.

Get the help of a Property Lawyer in Spain

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommended seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Land Registry Spain: Information on the “Registro de la Propiedad”

The land registry is common to all countries in the European Union. In Spain, it’s called Registro de la Propiedad. Land registry records are a tool that everyone must access because they provide information about who owns the property and how much each owner owes on any mortgages or land loans. In this article, we discuss some aspects of the Spanish Land Registry.

What is the land registry in Spain?

The Registro de la Propiedad (or in English “Land Registry in Spain”) offers official information on the number and location of all Spanish plots or parcels of property. The Land Registry is a government agency under the Ministry of Justice that strives to provide security in the real estate market. The agency is the only public institution that offers property ownership information.

Functions of the land registry

The Spanish land registry provides information on:

  • Property boundaries
  • Lot position
  • Classes of land
  • Property size
  • Names of the property owner
  • Rights and the charges that fall on a property

The land registry officially recognizes owners until unproven in court and therefore provides legal security.

When do you use the land registry?

There are several reasons to use the land register in Spain. These include:

When you want to change something in the land registry, you will do this through a public notary. The public notary is not there to protect your rights but to protect the rights of the government. To protect your rights in Spain, it is a good idea to work with a property lawyer.

land registry office for transfering property

Transferring property in Spain

It’s important to note that the purchase of a home in the Property Registry is not required by law. For example, if you are buying a farm, it is not necessary to register your purchase in the land registry. But bear in mind that a property registered in the land registry is safer to buy.

Transfer of property is often done with the help of a property lawyer. They will do an initial search of the registry records to see whether any issues could affect your purchasing power. The lawyer will then draft up contracts and protect the interests of the buyer or seller.

Is it necessary to register a property?

Because it is not obligatory to register a property in Spain, some people can think that it is unnecessary or that it is money that we can save. There are many advantages to registering your property in the land registry:

  • If a court decision does not specify otherwise, you will be treated as a single proprietor.
  • Property that is registered will safeguard the buyer from a seller’s creditors. The buyer will be able to protect themselves against unforeseen fees that may affect your house.
  • If you have a mortgage, it must be registered in the land registry.
  • When selling, the seller guarantees the transfer via a notary.
  • Information about limitations that affect the home will be clear so that no surprises can trap you.
  • If you believe that your right to possess is being threatened, there are several ways to get judicial support for it.
  • The fact that you are registering the purchase in the registry guarantees that no one will be able to get any rights over your property without your approval.

As you can see, there are many benefits to registering for owners, buyers, and sellers.

The land registry office

The land registry office has a website on which property owners can find out more about the property they are interested in. The website also provides information for engineers, architects, and lawyers who specialize in real estate.

Nota simple, and the land registry

One of the documents you can get from the land registry is the Nota Simple of a property. The Nota Simple is a document that certifies ownership, either by purchase or inheritance. It contains the date of transfer, the name of previous owners and new owners, plus all other details to establish the property’s history. The nota simple is often used when one buys a house in Spain or applies for inheriting it.

Land registry in Spain

A word from SublimeSpain

The land registry is of great importance to the real estate market in Spain. Unfortunately, scams are still happening where fraudsters sell fake properties they don’t own, or the properties have significant obligations, limitations, and risks attached.

Our property lawyers in Spain can help you with property law in Spain. We can draft contracts, analyze the law, act as a protective layer against a seller, and search the land registry records for any potential issues. If you need assistance with a significant purchase, like purchasing an apartment, villa, or office building in Spain, contact us.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

What is a Finca? A Complete Guide for Spanish Rural Properties

Fincas are the perfect option for those who want to experience Spain’s countryside. A Finca is a rural property in Spain that often includes farmlands, orchards and other agricultural features. They usually have buildings like houses, barns, workshops and stables. Let’s learn more about this type of property in Spain.

What is a Finca?

A Finca is a large rural area and typically has a modest country estate. It can also be referred to as the Spanish term for farm, ranch, or estate. The word “Finca” suggests the presence of construction, but it refers to a piece of land.

They are often initially constructed for agricultural purposes, but they can also be used as residences. Currently, they are primarily used as a place to enjoy the Spanish countryside and have recreational purposes. Fincas are now the typical summer house in traditional white-washed style. The location of a Finca does not always need to be in the countryside; it can also be in the suburbs of a Spanish town or city.

Main characteristics

A Finca is a magnificent country home with beautiful features, such as a swimming pool, large garden, terrace, wooden ceiling, or huge windows that afford stunning views of nature. They are often located around an open courtyard.

Other interesting typical features that you can find on each Finca is a garden with fruit trees, olive groves and vineyards. Many of them also have the option to include farm animals like goats, hens and sheep.

Finca popularity

Fincas are extremely popular among international visitors for their rustic charm and tranquil settings. It is seen as an ideal holiday home, and many people buy or rent this type of property to enjoy it with family or friends, whilst others want to live permanently or retire in this Spanish country house.

What is a Finca

History of the Finca

The term “Finca” derives from the word “fundus”, which means estate in Latin; thus, it can be said that this type of land generally has an estate-like character about them.

Fincas can have an extensive history and are easily over 300 years old. Feudal lords first developed Fincas during the Middle Ages as they needed more space to raise cattle on their estates to meet their needs for food and income.

At that time, they settled in the countryside and cultivated every bit of land surrounding their dwelling. This way, they could maximize their resources and help create a more sustainable life for themselves. Nowadays, many people buy rural properties as living spaces or make them into holiday homes.

Types of Finca Properties

Farmhouses may be classified as Fincas, and they vary depending on the type of land on which they are recorded in the Spanish Land Registry.

Finca Urbana: The residential Finca on Urban Land

A Finca Urbana is a Finca on land designated for residential construction. The building code set by the government specifies the construction requirements, and they can require you to build a certain number of floors and respect the appearance and size you choose. When buying a Finca Urbana, you should consider the restrictions to respect them. Getting permits shouldn’t be a problem when you plan for development and meet the requirements.

Finca Rústica: The agricultural Finca on Rustic Land

A Finca Rústica or Rural refers to a piece of land (rustic land) that can accommodate agricultural purposes or be used as a residence. However, a Finca Rural has been registered in the Land Registry for agricultural or forestry use only. These are typically agricultural plots, woodlands, water catchment areas, and (protected) nature reserves.

In general, this kind of land cannot be divided into individual lots. Also, you cannot build on it without first obtaining a permit from the government and paying any required fees. Getting a permit to build a residence on this type of land can be complicated.

The downsides of these properties are that they are difficult to commute to, and finding services in rural areas can be a problem. If you plan to live in your Finca Rústica full time, you will require utilities such as electricity and water.

The good news is that you have the option to include farm animals like goats, hens and sheep. Fincas Rústicas are often isolated and surrounded by the scenery, making them a fantastic place to purchase.

Finca Urbanizable: The Mixed Finca

A Finca Urbanizable is a Finca Rustica that can be changed into a Finca Urbana. This kind of property is still registered in the Land Registry for agricultural use only. However, the government has signalled that you can use them for residential and non-agricultural purposes (not officially); development is allowed under certain conditions.

People buy these Finca’s for construction, but they do not guarantee that everything is permitted. Often, owners have to pay a fee for the government to compensate them for allowing their Finca Urbana.

You must submit a plan to change a Finca Urbanizable into a Finca Urbana. This plan is called the Plan Parcial. This plan is a large-scale plan for developing the Finca, and it includes all building plans. The Plan Parcial will typically include new roads, public spaces, parking areas, landscaping etc.

Where to find rural property

Typically, the Fincas are in rural areas outside towns and cities. Fincas are in most regions of Spain, but they tend to concentrate in the South East and Eastern Mediterranean coasts. Popular areas to buy a Finca’s are:

  • The Costa del Sol in towns like Marbella, Torremolinos and Nerja.
  • The Costa Blanca in towns like Calpe, Dénia and Alicante.
  • The Costa Brava in towns like Blanes, Lloret de Mar.

They are also common in the Canary Islands, Balearics and Andalucia.

Buying a Finca

If you want to buy a Finca in Spain for recreational uses, it is safer to buy a Finca with construction for residential use. Because these types of properties have authorization for construction, they are more likely to receive permission for expansion. Building an extra pool, bedroom, or extension to your guesthouse will be more accessible when a base casa is already authorized.

If you are considering purchasing a new Finca and building off-plan, laws for building permits in Spain might restrict your activities on your Finca. Remember that any developing activity requires an application for a development license and compliance with current regulations.

Next to this, when buying a Finca, make sure you hire an agency, lawyer, and surveyor with experience with rural properties. These professionals can help you through the process and avoid costly mistakes, such as buying a Finca without a building license, property encroached by protected areas, and water pressure or electricity problems.

When to purchase a Finca

The best time to purchase a Finca is during Spring or Autumn when prices drop significantly compared with other seasons. The low demand and lack of properties for sale during these seasons can offer great bargains.

Another good time to buy is before the foreclosure date when banks become very motivated to sell their Fincas. During a property crisis, where few buyers are willing to purchase property, selling your property becomes difficult for banks, leading to many properties being sold through foreclosure.

Ensure that you have a lawyer ready to assist you in not dealing with any illegalities attached to the property.

A word from SublimeSpain

Suppose you want to buy a country property, such as a small rural property or a large plot of land to build real estate; our property lawyers can assist you with the legal side of the purchase and help you avoid costly mistakes.

From advising on risks, buying the property, and getting the construction permits, we can help you through each step of the process. For more information, send us a detailed request, and we will contact you promptly to explain our approach in more detail.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Stamp Duty in Spain When Buying a New Property

Stamp duty in Spain (or Actos Juridicos Documentados, AJD) is a property tax for new property buyers in Spain. It’s worth understanding how it works if you want to avoid paying more taxes than necessary.

When do I need to pay stamp duty?

You need to pay Stamp duty when you purchase a new property, whether it’s a house, an apartment, land or commercial premises.

Stamp duty is mainly charged on notarial instruments and records documenting economic transactions that need to be registered in public registries (such as company, land, and industrial property registries).

Stamp duty is also charged on court, administrative, and certain commercial documents.

When don’t I need to pay stamp duty?

There is no Stamp duty on products where you need to pay transfer taxes or capital duty. These are products such as shares, securities, and resale property.

How much do I need to pay?

The stamp duty rates in Spain vary depending on the type of transaction and the value of the assets involved.

The stamp duty rate is usually between 0.5 % and 1.5 %, depending on where it is situated.

Who pays the stamp duty?

The buyer pays stamp duty, and if a deposit is paid before the sale is completed, it will be taxed at the point of payment.

Are there any other taxes I need to pay when buying property in Spain?

Yes, when you buy a new property, you will also need to pay VAT (IVA in Spanish). This is a tax on the property’s value, which is usually around 10 %.

Does the stamp duty include the notary cost?

No, the notary fees (fixed fee) and legal fees (around 1%) are not included in the stamp duty, and you will need to pay for these separately.

Another fee that is not included in the land registry fee. This is paid when the property is registered in your name and costs around 0.6% of the property’s value.

A word from SublimeSpain

We hope this article gave you a good understanding of the stamp duty in Spain. If you have any more questions, don’t hesitate to contact our team at SublimeSpain. We can help you with buying property, taxation and company formation.

Best Places to Buy in Spain: 9 Property Locations

There are many great places to buy in Spain. For example, if you are interested in purchasing a holiday home, the Costa del Sol or the Costa Brava may be ideal locations. However, if you are looking for a place to live and work in Spain, cities such as Madrid or Barcelona may be better choices. In this article, we discuss the best places to buy in Spain.

Best cities to buy in Spain

The Spanish real estate market offers a very large amount of property options, and many of these properties have their own unique benefits. At our company, we find that our clients buying really depends on taste and budget, but also important issues such as climate, lifestyle and investment potential. To give you an idea of where to start looking we made the following list of cities our clients mostly buy in Spain.

Barcelona

Barcelona is the most popular city in Spain for foreigners to live in, and it’s not hard to see why. This vibrant city has something to offer everyone, from beaches and parks to restaurants, nightlife and culture.

Barcelona is also one of the most expensive cities in Spain to live in. However, with a bit of research, it is possible to find apartments and neighbourhoods that are more affordable.

Some of the most popular areas to live in Barcelona include:

Eixample: This upscale area is located in the city’s centre and is home to many of Barcelona’s most famous landmarks, including La Sagrada Família and Casa Batlló.

El Raval: Located just to the south of Eixample, El Raval is a more affordable area with a bohemian atmosphere. This neighbourhood is well known for its nightlife and its many art galleries.

Gràcia: Gràcia is one of the most popular areas for young people to live in Barcelona. Gràcia has Mediterranean architecture streets that are close together. The roads in Gràcia go one way, and the area has many with plazas.

Seville

Seville is the capital of Andalusia in southern Spain and is one of the largest cities in the country, with a population of around 700,000 people. The city is well known for its lively atmosphere, beautiful architecture and tasty food.

Some of the most popular tourist attractions in Seville include the Alcázar Palace, the Cathedral of Seville and the General Archive of the Indies. The city is also home to several other interesting places, including the Seville Fair, Plaza de España and Isla Mágica amusement park.

Some of the most popular areas to live in Seville include:

Alameda de Hércules: This neighbourhood is next to the river Guadalquivir and is known for its lively atmosphere and many bars and nightclubs.

Triana: Triana is located on the other side of the river from Alameda de Hércules and is known for its traditional Spanish atmosphere. This neighbourhood is home to many Flamenco bars and restaurants.

Valencià

Valencià is situated on the east coast of Spain, Valencia is the third-largest city in the country, with around 1.6 million people. This city has become increasingly popular with tourists and expatriates in recent years, and it’s easy to see why.

Valencia has located just a short distance from some of Spain’s most beautiful beaches and has lively nightlife and many cultural attractions. The city is also home to one of the most important ports in Europe and two international airports.

Some popular neighbourhoods to live in Valencia include:

El Cabanyal: This neighbourhood is located next to the beach and is known for its relaxed atmosphere and many seafood restaurants.

Ciutat de les Arts i les Ciències: This area is home to many of Valencia’s most important cultural attractions, including the City of Arts and Sciences, the Oceanographic Park and the Bioparc Valencia Zoo.

Ruzafa: Ruzafa is one of the trendiest neighbourhoods in Valencia, with many bars, restaurants and shops.

Malaga

Malaga is a city on the southern coast of Spain and is the capital of the province of Malaga. The city has around 600,000 people and is home to many historic landmarks, including the Alcazaba fortress, the Cathedral of Malaga and La Gibralfaro castle. The city is also well known for its beaches and excellent climate, attracting many visitors each year.

Buying a house in Malaga can be expensive, but several neighbourhoods are more affordable.

Some popular areas to live in Malaga include:

El Palo: El Palo is a beach neighbourhood located east of the city centre. This area is known for its relaxed atmosphere and its many seafood restaurants.

Pedregalejo: Pedregalejo is another beach neighbourhood located just west of the city centre. This area is slightly more upscale than El Palo and is home to many high-end restaurants and bars.

Granada

Granada is a city located in the Andalusia region of southern Spain. The city has over 230,000 people and is home to many historic landmarks, including the Alhambra Palace, the Cathedral of Granada and the Generalife gardens.

The city is also well known for its lively nightlife and many tapas bars. People that buy a house in Granada will find neighbourhoods that offer a mix of historic charm and modern amenities.

Some popular areas to live in Granada include:

El Realejo: El Realejo is a neighbourhood located north of the city centre. This area is known for its many restaurants and bars and its lively nightlife. The walls are painted in vibrant colours, giving the neighbourhood a unique atmosphere.

Albaicín: Albaicín is a neighbourhood located in the old city of Granada. This area is known for its narrow streets, traditional Andalusian architecture, and many tapas bars.

Madrid

Madrid is the capital city of Spain. It’s also the largest metropolitan area in Western Europe, with over 3 million people living inside its boundaries.

The Spanish Royal Family live in Madrid, and it’s home to many important monuments such as El Palacio Real (the Royal Palace), La Catedral de la Almudena (the Cathedral of Almudena) and the Museo del Prado (the Prado Museum).

Some of the most popular areas to live in Madrid include:

Chamartín: Chamartín is a neighbourhood located in the north of the city, and this area is known for its many luxury apartments and excellent restaurants.

Salamanca: Salamanca is an upscale neighbourhood located northwest of the city. This area is known for its high-end shops and many parks and gardens.

Centro: Centro is the historical centre of Madrid and is home to many of the city’s most famous landmarks, including the Royal Palace and the Plaza Mayor.

Puerta del Sol: Puerta del Sol is a neighbourhood from the 15th century located in the centre of Madrid. This area is known for its lively nightlife, shops, bars and large square.

Marbella

Marbella is a city located in the province of Malaga, on the Costa del Sol. The city has over 140,000 people and is known for its luxury hotels, resorts, villas, and beaches.

People who buy a house in Marbella can expect to live in an area full of luxury and amenities. Including a harbour, international schools, golf courses and a heliport.

Some popular areas to live in Marbella include:

Puerto Banús: Puerto Banús is a marina located in the west of the city. This area is known for its many luxury yachts and high-end shops and restaurants.

Nueva Andalucía: Nueva Andalucía is a residential area located northwest of the city. This area is known for its many golf courses and its upscale homes.

San Pedro de Alcántara: San Pedro de Alcántara is town located in the east on the city. This town is known for its beaches and its relaxed atmosphere.

Tenerife

Tenerife is an island located off the coast of Africa, and it is the largest of the seven Canary Islands and has over 900,000 people. The island is known for its many tourist attractions, including the Teide National Park, the Loro Parque Zoo and the Siam Park water park.

It’s a popular place to buy a holiday home, as people who buy a house in Tenerife can expect to live in an area full of natural beauty and amenities.

Some popular areas to live in Tenerife include:

Los Cristianos: Los Cristianos is a town located in the island’s south. This area is known for its many beaches and its lively atmosphere.

Playa de las Américas: Playa de las Américas is a resort town located in the southwest of the island. This area is known for its many hotels, clubs, bars, restaurants, and beaches.

Santa Cruz de Tenerife: Santa Cruz de Tenerife is the capital of Tenerife and is located in the north of the island. This area is known for its historic centre, many museums, and architecture.

Ibiza

Ibiza is a Spanish island in the Mediterranean Sea and one of the Balearic Islands. Ibiza has become internationally famous for its nightclubs and electronic music scene, attracting clubbers worldwide; it was also declared a UNESCO World Heritage Site in 1999.

If you’re looking for breathtaking scenery and beautiful beaches, Ibiza is your place. With its crystal-clear waters and sandy beaches, it’s no wonder that Ibiza is a popular place to purchase property. Playa d’en Bossa, Salinas, and Cala Comte are some of the most popular beaches on the island.

Some popular areas to live in Ibiza include:

San Antonio: San Antonio or Sant Antoni de Portmany is the second largest town on the island, and its location is in the west of the island. There are many high-profile and exclusive hillside villas where celebrities have chosen to live.

Santa Eulalia: Santa Eulalia is a lively place with a long, child-friendly beach, a beautiful promenade with palm trees and a large marina. There are many shops, good restaurants and several bars, a great place to buy property.

Considerations for choosing the best place to buy in Spain

When choosing a place to buy in Spain, you should consider the following:

  • The climate: The Spanish climate is temperate, with hot summers and mild winters. Consider the climate when choosing a place to buy in Spain, as some areas are hotter than others.
  • The amenities: Consider what amenities are important to you and choose a place to buy in Spain with the amenities you desire.
  • The cost of living: Spain is a relatively expensive country to live in, and you should consider the cost of living when choosing a place to buy in Spain.
  • The lifestyle: Consider the type of lifestyle you want to lead and choose a place to buy in Spain that matches your lifestyle. If you like hot weather all year round, choose an island or the south of Spain. If you are looking for typical retirement life, then take this also into consideration.
  • The Spanishing property market: Spain is a popular place to buy property so that the property market can become competitive. Property prices vary depending on the area, so do your research before deciding.
  • The tax situation: Spain has a variety of taxes that you will need to pay if you purchase property in Spain. Make sure to research the tax situation before making a decision.
  • The schools: When you want to live in Spain with your family, you need to consider the schools in the area. Make sure to research the schools in the area before making a decision.
  • The location: You can choose to buy near a beach in a resort town, the city, or the countryside. Consider your location preferences when choosing a place to buy in Spain.
  • Renting out or not: You should consider whether you want to rent out your property or not. If you plan to rent out your property, you must declare your rental income and pay rental taxes.

A word from SublimeSpain

No matter your needs or interests, Spain has many popular places to buy a property, so you can find something that will suit you. The prices vary depending on the location, but they are much more affordable overall than in many other countries. In addition, the weather in Spain is lovely year-round, so you can enjoy your property no matter when you purchase it.

If you plan to purchase property in Spain, make sure you contact a property lawyer and a real estate agent to help you with the process. They can provide you with information about the best places to buy in Spain and help you negotiate the price of your property.

Nota Simple: Meaning, Usage and How to Obtain It

In this article, we discuss the Spanish Nota Simple. An essential document for any buyer and owner of property in Spain. We talk about the information contained in the Nota Simple and how to obtain it. While we try to be as explanatory as possible, this is not legal advice. Many issues you might run into are not in this article. We recommend getting legal advice from a Spanish property lawyer with significant purchases.

What is a Nota Simple?

In Spanish property law, the Nota Simple is a document that certifies the title of ownership (right to property) for land or real estate in Spain. The Nota Simple contains a property description in the broadest sense and is an essential document used in the Spanish property conveyancing process.

The Nota Simple is a legal document that specifies all the transaction details, and it contains essential information that should be examined and verified carefully.

In other words, it is a thorough real estate report (or land registry report or property registry filing) that documents the official version of the real estate.

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Spanish Nota Simple

Property registration data inside of Nota Simple

The document certifies what is legally on a piece of land. However, it contains more. There are three parts inside the Nota Simple, legal information, financial information and architectural information.

Legal information

The Nota Simple contains enough legal information for a prospective buyer to decide whether to buy. This part may have historical data, the land’s surface, existing structures (houses), valid archaeological sites (especially in Andalusia), proof of ownership, easements rights and others. Other property registration data include:

  • Address of property
  • Name of current owner or owners (and tax identification number)
  • Percentages of ownership by owners
  • Land registry number (cadastral reference)
  • Other users’ rights to the property (pipelines, roads, footpaths, waterways, etc.)
  • Use of the property (residential, agricultural, etc.)

Financial Information

The financial section includes essential information about taxes, mortgages and others.

  • Mortgages that must be settled
  • Debts that must be settled
  • Liens against the property
  • Date of purchase by ownership
  • IBI tax (council tax costs)
  • Embargoes
  • Outstanding taxes

Architectural Information

The Nota Simple contains essential architectural information when you plan to embellish your newly acquired real estate. If there are building codes or restrictions of any kind (like height restrictions), the purchaser must know this information. This document may also include certificates and other relevant architectural details about the property.

  • Total square metres
  • Defined boundaries
  • The built structures
  • Type of property
  • Type of building
  • Annexes (Parking and storage)
  • Size of property
  • and other property description

Impotant documents for buying a house in Spain

When do you use the Nota Simple?

The Nota Simple is a document that contains essential information about a piece of property, as previously said. It’s most commonly used to sell real estate and acquire real estate. However, there are other applications for these important papers.

Buying property

When buying property in Spain, you can use the Nota Simple to ensure you are not purchasing a property with liens or other vital restrictions.

You can also use the Nota Simple to ensure that the property you want to purchase is entirely accurate described by the current owners. This isn’t easy to do, and this is where a property lawyer will assist you.

It is advisable to request the Nota Simple to confirm what you are buying. After escrow, the seller will not change the Nota Simple anymore. The document must be respected by law at that moment.

It is possible that the Nota Simple is inaccurate or has other issues with it; therefore, the lawyer must make additional investigations.

Selling property

You can use the Nota Simple as a legal document to transfer property when selling real estate. You can show the Nota Simple to prove that the property and all its details and information is yours. When needed, you can use the nota simple in court.

Mortgage

The Nota Simple is also essential when obtaining a mortgage or financing. If you are using the Nota Simple for a loan purpose, you must understand its financial information and how it can protect your interests.

Letting the property

It is typically used as proof of ownership when renting out the property. Before signing any agreement or contract with your landlord, you should ensure that the person you communicate with owns the property.

Inheritance

The Nota Simple will inform you of everything you’ll get when you’re receiving real estate through inheritance. The legal status of your legacy must be understood and utilized in your own best interests.

Buying a house in Spain

How to obtain the Nota Simple?

To receive a Nota Simple, you must submit the full name of the individual owner or the company that owns the property. You can also provide a NIE, NIF or CIF identification number.

If you do not have an NIE, NIF or CIF number, you can provide the full name of the owner or company owner. Next to this, you can also use the land registry number of the property. If you already know it.

Land registry

The Spanish Land Registry office holds the official document. The Land Registry office is an integral part of the National Government, and the purpose of the registry is to collect registered and changed deeds.

The registry will only give out copies of Nota Simples. The Nota Simple is available in Spanish and can be requested in person at any registrar’s office or online. This is possible if you want us to get you the Nota Simple.

Property Registry in Spain

The Nota Simple inside of the Spanish property conveyancing process

Getting a Nota Simple is one of the first things you’ll need to do when purchasing a home in Spain. Moreover, it’s a crucial legal real estate document, and therefore people often hire a Spanish property lawyer to get it and check it. The lawyer will ensure that the house for sale has an up-to-date Nota Simple attached.

After obtaining and checking the essential documents attached to the property, the property lawyer will assist with the property due diligence, clauses in the reservation contract and purchasing contract, signing at the notary, and obtaining the property deed.

Nota Simple and the property register

Real Estate Buying Assistance

Request a property lawyer in Spain from SublimeSpain to assist you in Spanish real estate law and make sure the sale by the seller is entirely legal without any debts and boundaries that will affect you in the future. We will assist you with the whole process of buying property in Spain.

A final word from SublimeSpain

At SublimeSpain, we also assist with immigration to Spain (such as the Non-lucrative visa and Golden Visa), Spanish company formation, and any Spanish tax/accounting services you may need. Our firm is a one-stop shop for relocating to or investing in Spain. Let us know what you need by submitting the contact form. We have an excellent track record, and we will make your property challenges satisfactorily resolved.

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Buying Off-Plan Property in Spain: Permits, Costs, and More

There are some legal permits you need to know about when you are buying off-plan property in Spain. Let’s explore some key areas to help you think about your potential or existing construction project, and the necessary legal requirements and procedures you can expect. Because property buying can be a complex, and this is just an overview. We always recommend getting a professional to assist.

Building permits

A licencia is mandatory before the construction of any building commences. Therefore, it’s validity is essential when buying off-plan property in Spain. Also, the permit must be obtained for any construction work on an existing building in case you want to change the usage, exterior appearance or change the volume. For example, you need a licencia to add a storey for both commercial and residential properties.

Spanish construction permits are categorized into two:

  • Licencia for minor works such as walls, terraces, and barbecues.
  • Licencia for major works such as new buildings, alterations, and demolitions.

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Obtaining permits

When it comes to permits for minor works, you are required to request a Licencia de Obra Menor at the local Town Hall. The application typically entails a brief description of the project to be undertaken and the estimated costs.

For major works, you need a Licencia de Obra Mayor that is created by a qualified architect (registered in the Spanish architecture college). The architect identifies a suitable technical architect (aparejador) who usually acts as the site manager of the construction site. The project owner has to have a suitable builder who also signs the application.

Permit applications can be submitted either in person or through a registered to the local alcalde. A receipt is subsequently issued. The processing time for the licence request is typically within two months after the date of submission.

During the processing, a thorough examination has to be done to confirm that the correct information has been provided. Subsequently, details of the request are posted in the town hall. In case you don’t receive a notification within two months, then you will automatically obtain the construction permit, assuming that the project has been approved.

NOTE: All the parties involved in the construction of a project are legally required to carry some obligations and responsibilities. These are detailed in the building act LOE of 5th November 1999 (Ley de Ordenación de la Edificacion).

Taxation

The relevant tax is paid at the end of the construction project. You can expect to pay about 4% to 6% of the overall construction cost.

Planning zones

All properties in Spain fall into two categories:

  • Rustic(rural) plots (suelo rustico)

Under the rural land law in Spain, some specially protected land (Suelo no urbanizable protegido) are protected and cannot be developed for residential homes. On the other hand, rural land categorized as Suelo no urbanizable común can be developed for residential houses for private use.

Additionally, there are profound rights and restrictions of a rural plot regarding minimum plot size, maximum building size, floors, and heights, among other factors. All rustic plots in Spain typically have some aesthetic restrictions. In this regard, different planning zone have varying regulations. More often than not, you have to construct a typical regional-style building that is unique to a specific planning zone.

  • Urban plots (suelo urbano)

Suelo urbano refers to serviced plots that typically have access to road, water and electricity, among other infrastructure.  When it comes to urban plots in Spain, different planning zone have varying rules. However, the plot sizes limitation is between 800m2 and 1,500m2.

Avoiding Fines and Other Penalties

In case you are a property deed holder or planning to construct a building in Spain, we highly recommend that you are fully aware of relevant licencia to avoid negative consequences. For example, the relevant authorities are likely to fine you for lack of a proper building permit.

Town hall inspectors regularly check renovations and home improvements. In this regard, you want to ensure your building site is fully licensed.  It’s prudent to register all changes made to your project.

When it comes to hiring the workforce, there are several rule and regulations that apply to foreign construction professionals. Also, certain rules specifically apply to the hiring of foreign workers. Consequently, you want to ensure you abide by the relevant labour laws.

Final thoughts

When it comes to choosing a contractor, we highly recommend doing thorough checks on a case-by-case basis before executing any type of contract. Also, before applying for a business permit, you must do sufficient due diligence to ensure the construction project complies with the relevant building rules.

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommended seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Ibi Tax in Spain: A Complete Overview for This Property Tax

The IBI tax is a property tax in Spain that you will have to pay the following year after buying a property in Spain. In most cases, you will not get a warning about paying the IBI property-related tax for the tax office. In this article, we discuss every aspect of the IBI tax in Spain.

What is the IBI tax?

The IBI tax or Impuesto sobre Bienes Inmuebles, is a property tax. The IBI tax is a tax paid to the local tax authorities, and it is a municipal fee for public services rendered by the local administration for houses, buildings and land. It is similar to the council tax in other countries.

IBI tax in Spain

How is the IBI tax calculated?

The cadastral value (taxable value) of the property or ‘valor catastral” in Spanish is the guidance for the IBI tax. This cadastral value is not linked with the property’s actual value and is only used for tax purposes by the local Spanish tax office. Registration of the cadastral value is in the Cadastral registry; this is a different registry than the land registry.

Characteristics that influence the cadastral value (rateable value) are the size of the plot, age, rooms, location, prices of surrounding properties, classification of land, number of storeys, etc. The cadastral value is a property valuation for tax purposes and it is always lower (around 10-30%) than the market value or purchase price.

The taxable value is multiplied by a percentage set by the local tax authority; this is generally between 0.4% to 1.1%. So when you have a property value of 500.000€, you will pay around 500.000€ * 0.04 = 2000€ in IBI tax. Calculate your IBI tax with this Suma tax calculator.

Depending on the local town hall, your IBI tax can have a percentage reduction when you pay earlier, in a specific way, have a family, solar panels, or other specified factors.

Where can I find the IBI tax when buying a property?

The Nota Simple can help you discover the IBI tax, it is used by property lawyers. The Nota Simple explains what you’re buying, as well as other debts of the property. If there are any annual or community charges, they will be listed here.

Updates of cadastral values

Your cadastral value is often recalculated every decade by the tax authorities to account for inflation changes. Sometimes the local government wants to increase the values of many properties in its local area.

When they have had permission from the national government, they can raise the property values by a percentage. For example, they might choose to increase the cadastral value’s of all the properties in an area by 10%.

Buying property and IBI tax

IBI tax and unregistered properties

Not all Spanish properties are registered with local town halls; some may have been uninhabited for many years and have no registered owner. When a property is un-registered, the IBI payments still need to be paid.

New owners may have to pay the IBI tax for the period that these properties were unregistered when buying unregistered properties. Non-payment of the IBI taxes can result in fines, interest charges and forced sale of the property.

What happens when you pay the IBI tax late?

In recent years town halls have been more strict on late payments of IBI taxes. New ways to trace property owners have been introduced, and some town halls even hire property owner tracing agencies.

Late payment and unpaid IBI tax can be penalized by 5-20%, and you may also lose ownership or be forced to sell. Your bank account may also be frozen until a payment process is started. To not get any issues when IBI tax, contact an accountant in Spain to do your IBI taxes and avoid any other tax-related problems.

Who needs to pay the IBI tax?

All property owners need to pay the IBI tax when buying a house in Spain. So both non-resident property owners and resident owners need to pay this tax.

To avoid buying a property with local tax debts, the lawyer of the property buyers ensures that the previous owners pay IBI tax in the years they owned the property. When the previous owner did not pay IBI tax in the previous years, the debt is transferred to the new owner, and then the town hall will add additional taxes for the new owners.

For property buyers, it is essential to hire a lawyer who follows up on this for you before signing at the Notary office. They might advise on a safeguard in the initial buying contract; in the negotiation, the lawyer can state that the seller will forfeit a percentage of their sales proceeds when the seller did not pay IBI tax.

Property taxes in Spain

When do you have to pay the IBI tax?

While depending on the local town hall, the tax is typically paid once a year between August and November, and the tax is set beginning January. You can pay your IBI tax upfront, but paying the property-related tax at once annually is most common in Spain.

How do you pay IBI tax?

When you have registered your property with the local town hall, request how you will pay your IBI tax. The responsibility to pay the tax lies with the property owner, not the local town hall.

There are maybe different ways of paying at your local town hall, but most local town halls will work with a bank transfer or an online payment portal.

What does the local town hall do with your IBI tax?

The local council tax is spent on several regional services, including road infrastructure, street lighting, park and street cleaning, security, neighbourhood upkeep, rubbish collection etc. You can request information about how your IBI tax money is used at your Spanish town hall.

Calculating the IBI tax

Where can you get further information?

Suppose you have questions related to property buying or require property buying assistance. Please do not hesitate to contact our team for any questions related to the buying process in Spain. Our property lawyers in Spain are bilingual and can answer all your questions regarding property-related taxes and anything real estate in Spain.

Pitfalls of Buying Property in Spain: 15 Common Mistakes

When buying property in Spain, you should be aware that several pitfalls are involved, and you should not rush into it. Every country has its own rules and regulations for purchasing property, private or commercial.

1. Buying in the wrong location

Consider the location seriously before you buy property in Spain. Buying your holiday home in Spain on the beachfront is very tempting, but similar properties are readily available elsewhere at a lower price. The good idea is to look at comparable properties that have sold in recent months and how much the properties sold, so you can avoid making mistakes during negotiations.

Another thing you can do is look at an analysis of the Spanish property market to time out your purchase. Prices fluctuate, and when your goal is to invest in Spanish property, you must buy at the right time to get maximum value for your money.

Furthermore, consider everything about the location, such as the transport links, the noise level, and any environmental issues. It would be best to think about where you would buy food and other supplies that you need regularly; it may be far from the property.

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Lawfirm for buying property

2. Physical inspection before you buy

Always go for a physical inspection of a property you want to buy in Spain. You can ask an independent surveyor or inspector specialising in this field to visit the building and check everything out. They will tell you of any problem areas such as the roof, plumbing work and even insects or woodworm.

You can hire a professional to do this for you, but you could also ask your solicitor to recommend someone reputable. If you buy commercial property in Spain, a checkup is also important because of any legal issues.

3. Not having a clear plan to buy a property

You should have a clear plan to buy a property in Spain. Take time to research the market and make a list of all the properties you want to look at before going out. Do not be tempted to buy something on the spur of the moment because it may not be what you want. The temptation can be high because prices of property in Spain and the rest of the world have dropped.

Do not be over-impressed by a location and buy something even if it is not what you had planned originally. You may get carried away with negotiations and forget to look at other more important factors, such as your personal preferences or your family’s needs. It is better to take your time than to rush in and regret making a wrong decision.

Pitfalls of Buying Property in Spain

4. The language barrier

If you buy commercial property in Spain, this may not be an essential factor, but if it’s your second home or holiday home, you will want someone who speaks English or your language. This is more so in the remote locations in Spain where many people do not speak a foreign language. This can create problems when you want to do maintenance work, need help in an emergency, have questions, or need to deal with the government.

Before buying a property in Spain, it is wise to make sure you get help to support you during difficult times. Our team can assist you.

5. Not including extra cost (property transfer tax, legal fees etc.)

Remember that you will not only have to pay for the property itself, but there will be additional expenses when buying property in Spain, and these should be considered as an included cost and not as a surprise.

When buying property in Spain, fees and costs include lawyer and legal fees, agent fees, property transfer tax, title deed tax, land registry fees, and foreign/local Spanish notary fees.

The extra fees and property tax are calculated as a percentage on top of the purchase. In general, an extra 15-20% above the purchase price cover’s it.

The cost depends on the location, service level, tax bracket, final sale price, and whether you are dealing with new or existing properties.

Make sure you have enough cash to cover all the fees and other expenses, so you do not end up disappointed.

Pitfalls of buying property in Spain

6. Not working with a Spanish property lawyer

When buying a property in Spain, it is recommended that you work with a solicitor to help you. This person will advise you on everything and assist you throughout the purchasing process and afterwards during your rights as the owner.

A property lawyer will advise you on the paperwork and help with all aspects from start to finish so they can ease your concerns.

Most property scams and pitfalls of buying property in Spain are avoidable if your lawyer takes over the buying process for you.

7. Buying in a hurry

If you are under pressure to buy a property in Spain quickly because of work or other commitments, be wary. You may pay more for your property than it is worth to get rid of the problem quickly rather than thinking about the consequences afterwards.

When you buy something in haste, there is always room for regret and mistakes when not all aspects are thoroughly thought through. Make sure you get proper advice from a real estate agent and lawyer when you want to buy a property in Spain and that you don’t rush into making a decision.

Buying property in spain

8. Signing a contract you don’t understand

Always make sure you read the contract carefully before signing it. If you have not read or understood it fully, ask for clarification before signing. Language in the agreement may be confusing, which can lead to misunderstandings. Be careful; you may end up signing the wrong thing.

It is recommended to ask for an explanation from a Spanish property lawyer. When you do sign the contract, make sure you get a copy for yourself so you can refer back if there is any disagreement in the future.

9. Not having your immigration paperwork in order

When you buy a property in Spain, you need to get a Spanish tax identification (NIE number). If you do not have this paperwork in order, you can’t buy the property.

Get help from an immigration lawyer in Spain to obtain your NIE number. If you want to be a resident in Spain, this is also possible. For example, when buying a property, you can get residency through a golden visa in Spain program, but there are some requirements you have to meet.

You can also choose to be a non-resident for tax purposes in Spain. Non-residents stay in the country for less than 183 days.

Don't stress over buying property

10. Stressing something will go wrong with your property purchase

You have to remember that buying a property in Spain or anywhere is not an exact science even if you follow all the rules. There are always problems, but there are ways to deal with them, so keep calm and think logically about your options.

When something doesn’t go according to plan, it can be unpleasant, but don’t let emotions get in the way of making the correct decision. Make sure you get advice from real estate agents and lawyers who can offer sound guidance on your specific situation.

11. Not getting the proper mortgage

A mortgage provider will only finance up to a certain percentage of the property value. For example, if your property is valued at 100,000 euros and you try to get a mortgage for 140,000 euros, it will be declined. It would be best to get the correct amount sanctioned based on the property value.

In Spain, mortgage lenders will not sign a mortgage agreement until you have acquired a home. As a result, it is critical to include language in the contract allowing you to terminate the deal if you cannot obtain a loan. It is best to get the help of a mortgage advisor in Spain.

If you’re looking for a mortgage in Spain, Spanish banks can provide you with an inexpensive rate. At the appointment, you can also open a Spanish bank account.

Property tax and pittfals of buying

12. Not getting the help of a real estate agent

A possible pitfall is not working with a real estate agent in Spain. A real estate agent will help you find a house in the area you have specified, and they will help you determine a fair price and negotiate with the seller to get you a good deal.

They may even be able to find better deals and lower prices than you can, which can save you lots of money in the long run. Be careful when the seller’s estate agent does not represent you, as it may lead to a conflict of interest.

Agents will not help you with legal and immigration matters. Even though they can introduce you to the appropriate people, it is not their job to do this.

13. Not getting a proper preliminary contract

When you wish to acquire a property, and the seller accepts your offer, the next stage is for the buyer and seller to sign a preliminary agreement (the escrow or Contrato Privado de Compraventa in Spanish)

Spanish property law requires that this document contain a series of clauses, one of which is the right for either party to terminate the agreement within an initial period of one month.

This clause leads to reservation agreements. A reservation contract is where you have signed up to purchase a property, but the bank can still redraw if the funds are not available within a given period. You can terminate your reservation contract by providing a letter of termination.

Beware, the seller and buyer pay a deposit, typically 10% of the purchase price. If one party needs to withdraw, they will lose the deposit. Work on the preliminary contract with your Spanish property lawyer, who will advise on the best clauses for you to include.

Buying property in Spain

14. Lack of planning permission from the government

Among the pitfalls of buying property in Spain is getting a house that does not have the right permits. When you are buying a house that does not have permits to have been built you can get in trouble. Whether it is a new property, second-hand property, or still being built. A property requires permission from the government to exist.

When buying properties off-plan, you will need to make sure the property is legal to build. If the property is illegally constructed, you might be responsible for adhering to current local rules. Another reason to get a specialist involved when you purchase the property.

Renovation of a second-hand home will most also require building licenses which you must obtain within the legal time limit. When buying a home in Spain, the house’s location influences the construction licenses, local government will often determine if you have a right to build. For example, there are hard restrictions to building size and position in rural areas, and historic city centres. Our Spanish lawyers will be able to assist you with the planning permission, and construction licenses involved in Spain. Contact us for a quote.

Pitfalls of buying property

Concluding the potential pitfalls when buying property

Foreign buyers should be aware of these common pitfalls. As outlined above, you can avoid many pitfalls of buying property in Spain by acting. When you work with a Spanish lawyer, you stand a better chance of avoiding the pitfalls and achieving success in your purchase.

You don’t have to be an expert when buying property in Spain, but it is wise to work with an expert who can guide you through the process. Our real estate lawyers are experts in Spanish property transactions, and you can be sure that they will help you avoid the pitfalls that many foreigners face when buying property in Spain.

If you need assistance with any of the above issues, please do not hesitate to email us at contact@SublimeSpain.com.

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommended seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Licencia Urbanística: Building Permits in Spain

Building licenses and permits in Spain are essential if you want to buy a piece of land or property in Spain. Even before buying, it is smart to inform yourself if it is possible to do the work you want to do. In this article, we discuss the “Licencias Urbanísticas”, the licenses necessary for anything related to changing properties in Spain.

What is an Licencia Urbanística?

The Licencia Urbanistica, or “urban planning license,” is the license that authorizes works of urbanization, subdivision, construction, demolition, intervention, change in occupation, and use of public space. In other words, when you change, construct, or convert a piece of land, the Public Administration will oversee that the change is legal and followed.

Licencias Urbanísticas

Types of licenses

Not all urban licenses are the same; some may need more information or details about the project. The types of urbanization licenses in Spain are:

  • Plotting license
  • Building license
  • Licenses for other urban development actions
  • The license of the first occupation
  • Activity license
  • Change of use license
  • Terrace license
  • License for change of ownership

Plotting license (Licencia de parcelación)

It is the one that is requested to split up a property into separate lots (urban and rural). This administrative procedure is utilized to ensure that the land on which one wishes to act meets the requirements the government has set for urbanization.

License for change of ownership (Licencia de cambio de titularidad)

If a company is sold, but the operation does not change, it is not necessary to obtain a new business license; instead, you must report the change of ownership to the Administration.

Change of use license (Licencia de cambio de uso)

This license is necessary for the change of use and occupation of a property. For example, you can not use a property used as a warehouse in the future to host fairs. Each change requires a new license. In addition, this license is required when converting any type of housing to another use (such as changing from residential to business).

Licenses for other urban development actions (Licencias para otras actuaciones urbanísticas)

When projects that do not fall under any of the other categories must be completed, they are required, for example, as part of the installation of a billboard or light.

The license of the first occupation (Licencia de primera ocupación)

The building permit is also known as the cedula de habitabilidad, and it is a document that certifies that a structure satisfies the required standards for habitability. To make a property habitable, basic needs must be fulfilled, such as safe entrances, exterior lighting, waste disposal systems, electrical wiring, etc.

Activity license (Licencia de actividad)

When doing business on a property in Spain, it is essential to show that the company does not pollute and is safe. In a nutshell, this activity will not endanger either the environment or the population. When opening an establishment to the public (such as a restaurant), the owner must have an activity license.

Terrace license (Licencia para terrazas)

The public roadway is host to several terraces of bars, restaurants, and cafeterias. To manage this, the city council requires a license to ensure that the establishment complies with safety and public space rules.

Building license (Licencia de obras de edificación)

For both major and minor construction projects, building permits are required. There are several types of building permits:

  • New construction (Obra Nueva): The development of a building in an unbuilt site implies obtaining permission from the municipal authorities.
  • Expansion (Amplicación): This license will authorize an increase in existing buildings.
  • Modification (Modificación): This license allows for a change in an existing structure’s architectural or structural design without increasing its size.
  • Restoration (Restauración): The authorization to undertake works to save and adapt a structure recognized as a cultural significance gives this license.
  • Demolition (Demolición): This license allows for the complete or partial destruction of one or more present structures.

Building license

Reasons to obtain the Licencia Urbanística

Some examples of acts subject to obtaining a license are:

  • Changing urban plots: The construction or remodeling of a plot of land in an urban environment constitutes an act of use change, implying that we should ask for a license.
  • Demolition of constructions: When you want to destroy a building to build a new one, you must ask for a license.
  • Placement of advertising signs visible from the public road: Even when the sign is hung in your building, we must ask for a license if it can be seen from outside.
  • Modification of the structure of existing buildings: when you make any change to the structure of your building, for example, if you add a new floor or convert a garage into a room, ask for a license.
  • Provisional uses and works: when you change the use of the piece of land e.g. opening a café or an office, or when you work on the land, for example, excavations or earthmoving to build foundations. You need permission.

In some cases, you need multiple licenses, and the combined licenses are known as “urban development permits”.

Obtain the urban planning license

The process to get an urban planning license depends on the municipality and the type of license you need. The Spanish government can be slow with giving out permits, and therefore it is essential to submit a correct application if you don’t want to have any delays.

Piece of land

Obligations of the owner

The property owner must ensure that they have the right to alter it. Following this, the competent Administration (the City Council) will grant the license after confirming that the actions to be taken conform to town planning rules.

It’s necessary to possess the required municipal license to perform property transformations. Furthermore, it must be requested ahead of time before acting.

Costs of the License

It is possible the owner needs to pay a fee for the license, which may or may not depend on the work that they want to carry out. The amounts are defined in the Town Planning Regulations.

Obligations of the government

The city council must follow the procedures outlined in its regulations. As a result, the Administration has no choice but to issue an urban development license in accordance with their rules. If you want to make changes according to the law, they are obligated to give you permission.

Administrative silence or not

When the public Administration doesn’t answer in the specified time, depending on the Administration, there are two ways this can be interpreted. It can be considered an implicit rejection or acceptance.

Building permits

Get help with your building permit

The process of getting a building permit can be difficult and time-consuming, as the government can be slow in issuing permits. Not knowing the type of building permits you need for your project and communicating with the municipal government can be a headache. Our team at SublimeSpain can help you get your building permit with a complete, detailed report that follows the Spanish regulations to the letter.

Our property lawyers will assist you and help you get your plan done, as they have a lot of experience obtaining licenses from the government. They will help you submit the correct application and keep you updated on the progress of the process.

Property Tax in Spain: Read Our Overview

Property tax in Spain is the taxation on real estate, and it is a very common Spanish tax. You will have to pay multiple taxes on your property, and in Spain, all property owners are required to pay these taxes.

You must apply for a NIE (Número de Identificación de Extranjero) to pay these taxes, which is your Spanish tax identification number. When purchasing a home in Spain, you must also have this number. This number identifies you with the Spanish authorities and is required to pay taxes.

Property taxes in Spain for non-residents

You are subject to income tax (including capital gains tax), annual property tax, wealth tax, and stamp duty if you reside in Spain as a non-resident.

Spanish income tax

The income tax for non-residents is limited to income from Spain only. A non-resident is always taxed at a flat 19% when you are from Europe and at 24% if from somewhere else.

When renting out a property in Spain, you will have to pay rental income tax. Non-residents only have to pay income tax over the income they get within Spain only.

Next to this, when you sell your property, you will have to pay capital gains tax on it. You do this via the income tax declaration form as well. In this way, the capital gains tax includes your income tax.

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Annual property tax

When you are not renting out your property in Spain and using it for personal uses, you will also have to pay a tax based on the percentage of the value of your property. This is called the IBI tax. Next to the IBI tax, you will have to pay another tax that is the IRNR (Impuestos sobre la Renta de No Residentes).

IBI tax on property in Spain

The “Impuesto sobre Bienes Inmuebles,” or IBI, is the annual property tax in Spanish. The tax rises every year based on inflation. The tax rate for each year is between 0.4 per cent and 1.4 per cent of the property’s cadastral value.

The cadastral value is the Spanish authorities’ value for your property, and your real estate lawyer will be able to provide it. You can object to increases in the cadastral value, so you won’t have to pay more at the Spanish tax office, but you will have to provide good reasons for it.

The municipality’s annual real estate tax is a local property tax, and IBI tax rates increase every year depending on inflation. Remember that the cadastral value for the same size of properties in the same area can vary dramatically.

The IBI also takes into account your cadastral reference number, which identifies your property at the cadastral office, in addition to the assessed value of your home (cadastral value). This may be crucial when purchasing and selling properties because the physical description on the title deed does not match that on paper.

In general, the IBI bill will be sent to you, or you can pay it online. Your local tax office (SUMA) will handle the payments of the IBI.

IRNR tax on property in Spain

This tax is for non-residents that own property in Spain. The government created it under the assumption that non-resident property owners somehow profit from having a holiday home in Spain, even though they don’t rent it out.

Even if the owner does not receive any income or rent from their home, the property is taxed 1.1% or 2% profit on the property’s cadastral value. The amount of taxes varies on whether or not this cadastral value has been updated (1.1%) or not (2%). The tax is reported via the Modelo 210.

Wealth tax

The wealth tax in Spain is an annual tax on the wealth over a certain threshold that you own in Spain. This includes your Spanish property and other assets such as cash, cars, artwork etc.

The tax is levied on the market value of your total assets each year. As this amount increases every year, so will the resulting taxes owed to the Spanish government. You will have to pay wealth tax when your assets in Spain are over 700,000 euros.

Property tax in Spain for non residents

Property taxes for residents

You are subject to income tax, capital gains tax, annual property tax, and wealth tax if you are a resident.

Spanish income tax

When you get a Spanish rental income from your property or properties in Spain. You will of course be obligated to pay tax. Residents of Spain will always have to pay the rental income tax in Spain.

The percentage to pay ranges from 15% for low-income individuals and 30% or 40% for those with high income.

When you rent out your property, you will have to pay taxes on your rental income, and this rental income tax is called notional rental.

Annual property tax

In Spain, there is an annual property tax. The annual property tax is derived from the cadastral value of the property. The tax is called the IBI, “Impuesto sobre Bienes Inmuebles”. The tax increases every year depending on inflation.

The annual tax rate is 0.4 per cent to 1.4 per cent of the property’s cadastral valuation. The yearly tax is set by the municipality and can vary a lot.

Wealth tax

As a resident in Spain, you will have to pay wealth tax on your worldwide assets. The wealth tax is a progressive tax rate.

You will have to pay wealth tax over the value of assets above 700.000 euros, and you don’t have to pay wealth tax on the first 300.000 euros of your home property.

The wealth tax is a tax put by the autonomous regions, and it differs from region to region.

The wealth tax can be complex to pay, especially for foreigners. It is recommended that you hire a Spanish accountant.

property taxes in Spain

Property tax when purchasing new properties

When you purchase a new property in Spain, you will have to pay Stamp tax and VAT.

The Stamp Duty

The stamp duty is a fee that any person or entity that buys a new property needs to pay. The Spanish government sets this fee. The stamp duty is 1.5% of the sale of the property, and they are charged on top of the property price.

VAT

On top of the stamp duty, a 10% value-added tax (IVA in Spanish) is levied on the purchase price. While this seems higher than the tax on resale properties (ITP), this tax can be deducted from other expenses when buying property under a business.

Actos Juridicos Documentados (AJD)

The notorious mortgage tax or AJD (Actos Juridicos Documentados) is one of the taxes you must pay in Spain. This tax is known to vary by region, with a minimum of 1% and a maximum of 1.5%.

The percentage is determined on the basis of the “Responsabilidad Hipotecario,” which means “mortgage responsibility”. The mortgage responsibility is what the bank would owe if the person failed to pay for a period. It is an average of what it costs if they go to court and how much money the bank may need.

This is generally equivalent to between 150 and 200 per cent of the mortgage amount.

property tax in spain

Property tax in Spain when purchasing resale properties

When ​you purchase a resale property in Spain, there are two taxes that you need to pay: the ITP and the AJD

The Impuesto de Transmisiones Patrimoniales (ITP)

The only tax imposed on real estate resale is transfer tax (Impuesto de Transmisiones Patrimoniales/ITP in Spanish). The autonomous regions set ITP. The amount owed is determined on a sliding scale depending on the property’s price. In general, ITP adds between 8% and 11% to the cost of buying a property.

Actos Juridicos Documentados (AJD)

As mentioned before you will have to pay the AJD. which is 1 to 1.5 per cent of the mortgage responsibility.

Property tax Spain

Selling a property in Spain

Because the Spanish Tax Agency (Hacienda) may check your records at the time of property sale, you can’t avoid paying property tax in Spain.

3% deposit for capital gainst tax

The Spanish Tax Authorities will require a 3% deposit within 3 months of the time of sale. The deposit is a guarantee against capital gains tax, income tax, and wealth tax in the previous four years, as well as a guarantee against your tax debt on capital gains. When you have paid your taxes and the 3% was not needed, then you get them back at your next Spanish tax return. At the time of sale, you will have to submit the sales agreement in order to pay this real estate tax.

Capital gains tax

When selling the property, you will have to pay capital gains tax. The capital gains tax for residents is:

  • 19%: for the first 6.000€ obtained as a profit
  • 21%: From 6.000€ to 50.000€
  • 23%: From 50.000€ onwards
  • 26%: From €200.000+

Fee’s

Many of the fee’s associated with the selling of property in Spain, are often paid by the buyer. However, you can expect:

  • Estate agent fee (around 4.5% of the sales price)
  • Bank transfer fee’s
  • Legal and financial fee’s (around 800 euro)

Property tax in Spain

How to pay Spanish property taxes

For a non-resident, the best solution is to pay the tax by direct debit. The bank will provide you with a form authorizing the bank to pay the tax, and a copy of the document will be deposited with the local council. This will ensure that taxes are paid at the right time, just like other utility bills owned by you.

You will receive a letter from the municipality about your local taxes, while your annual income tax should be done on your annual personal income tax return.

The Spanish tax authorities are strict about the late payment of taxes, and any delay will result in penalties or fines, which can be very expensive. Next to this, your property must be adequately registered with the Spanish tax authorities for them not to claim that you are avoiding property taxes as well.

Frequently asked questions

Below you can find some frequently asked questions about Property tax in Spain.ert

Are there any other taxes I might have to deal with when selling or buying a property?

Yes, for example, you might encounter inheritance tax (succession tax), council tax, or other municipal tax. There are many taxes involved with buying and selling property in Spain, and it is advised to hire a tax advisor when dealing with the Spanish tax system.

Can you help me when I want to buy and let properties in Spain?

Yes, we offer a wide range of services for businesses such as company formation, accounting services, and property buying guidance. Get in touch with our team if you need any help or have any questions about buying and letting properties in Spain.

Get help with your property taxes

You need to pay any taxes when owning a property in Spain. If you want to be fully up-to-date with your tax payments, you should hire a Spanish tax advisor. Next to this, it is also recommended to hire a real estate lawyer when buying a property in Spain. If you want our help, you can contact us at contact@SublimeSpain.com.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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Modelo 720: Meaning, Due Date, Rate, and Penalties

As a Spanish resident, you must use the Modelo 720 to report your overseas financial holdings when the total value of all the specified overseas assets in which you have ownership in, is more than the specified reporting threshold. The form provides three reporting categories including bank accounts, investments and immovable property.

The Modelo 720 is designed to help the tax authorities obtain information regarding the amount of specific type of assets held by Spanish residents outside Spain. Also, information on income, insurance, securities or rights obtained overseas is a substantial part of the declaration. The Modelo 720 is an important document in the Spanish tax system, let’s review its meaning, due date, rate and associated penalties.

Who should use the Modelo 720 form?

The obligation to file Form 720 and declare all financial entities located overseas lies on the owners, beneficiaries, representatives, whether individuals or companies with rights of disposal or full ownership. Spanish tax residents are legally mandated to fill out the 720 tax form, indicating to the relevant tax authorities of their fiscal activity in other nations.

According to the Spanish Tax Office, Modelo 720 applies to all Spanish residents and legal persons who, at any time in the year owned overseas assets worth €50,000 or more. You must report on Modelo 720 all specified foreign holdings, regardless of whether some or all of the foreign holdings was sold before the end of the year.

The €50,000 threshold is based on the cost amount of the asset. When it comes to foreign assets acquired as a gift or inheritance, the cost amount is considered as the fair market value at the time the assets were received.

The components to submit in the Modelo 720 also includes values such as:

  • Homes
  • Shares, stocks, and bonds
  • Trusts
  • Life or disability insurance policies
  • Cryptocurrencies
  • Pension funds

For individuals who have already filed Modelo 720 in the past, you will have to file it again in case the value of an existing asset grew by more than €20,000 or you traded in new assets.

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Can I file Modelo 720 electronically?

Form 720 is submitted electronically at the Spanish Tax Agency, so you cannot file it in person. The taxpayer must have an identification with a digital signature (electronic ID or an electronic certificate. Submitting the Modelo 720 with professionals guarantees greater peace of mind.

In case the taxpayer does not have an electronic signature, the individual in charge of submission must be authorized to submit the declaration on behalf of third parties. Consequently, only a registered tax office collaborator or legal professional can submit the form on your behalf.

What is the due date for filing the Modelo 720 form?

The tax form needs to be submitted before 31st March of every year. You can file it after the submission period but you will have to pay a penalty.

Are there any penalties for not declaring foreign income?

There are considerable fines imposed for non-compliance with the Modelo 720, starting at €5,000 and can reach six-figure sums. Therefore, advisers and taxpayers must take great care in their Modelo 720 compliance, and when handling enquiries and disclosures.

Get advice for filling in your Modelo 720

The taxation of income and all gains from foreign interests can be complex. At SublimeSpain, we help our clients ensure compliance, especially concerning issues of residence and tax liability.

The importance of filing Modelo 720 for Spanish residents cannot be overstated. In this regard, maintaining proper records of all foreign holdings is critical to minimizing the time, hassle and potentially the cost of completing this form. Based on Spanish tax laws, errors or omissions, even if accidental, could lead to penalties. As a result, it’s essential that you complete the form correctly and subsequently file it on time.

As a Spanish taxpayer, you want to take advantage of existing treaties and tax laws to mitigate double taxation when dealing with foreign assets. We strongly recommend consulting a professional tax advisor, especially if you are not very familiar with the existing tax regime. We can help you, just fill in the contact form and we will contact you back right away.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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Buying Land in Spain: Things You Need To Know

Whether you want to retire in Spain, invest in Spain, or are looking for a holiday home. Buying land is a great option to save money, and make something that feels completely yours. When it comes to buying land in Spain, there are a few things you need to take into account. Firstly, you should be aware of the different types of land available in the country, and what each type entails. Secondly, you should also have an understanding of how to choose land and the costs involved, and thirdly you should know about the risks involved. In this article, we will provide an overview of each of these topics so that you can make an informed decision when purchasing land in Spain.

Buying land in Spain

There is no doubt that buying land in Spain is an exciting prospect. Not only is the country renowned for its stunningly beautiful scenery, but it also has a rich cultural heritage which makes it a popular destination for tourists. Next to this, it is also one of the most popular European countries for foreigners to emigrate and not as crowded and expensive as other countries.

All of these factors combine to make buying land in Spain an attractive proposition for many people. In addition, the climate in Spain is excellent, with plenty of sunshine throughout the year. This means that those who purchase land in Spain can enjoy relaxation and tranquility on their own piece of paradise, while also having easy access to all the amenities and attractions that a lively city has to offer.

Town hall and planning permission

Building your dream home in Spain

Building a house in Spain can be a great experience, but it is important to be aware of the many planning rules and permissions that are required. In general, the process of building a house in Spain is quite complicated, and it is important to make sure that all the necessary paperwork is in order before starting construction.

Permissions and regulations

One of the main things to keep in mind when building a house in Spain is that there are different regulations depending on the region in which you are constructing the property. Additionally, each autonomous community within Spain has its own regulations, so it is important to consult with a property lawyer or local authorities to get all the relevant information.

Urban land

Choosing a land to build

Spain is a diverse country, with plenty of different regions that offer their own unique charms. When it comes to choosing a location to build your dream home in Spain, you will need to consider a few things.

  1. What amenities do I need?
  2. What type of climate do I want?
  3. How close do I need to be to my workplace?
  4. What type of obligations does the land carry?

What amenities do I need?

It is important to consider what amenities are needed in the surrounding area. Do you need to have access to public transport? Is it necessary for shops, schools, and hospitals to be nearby? Or do you need a large range of leisure activities on your doorstep?

What type of climate do I want?

The climate is another thing that should be considered when buying land in Spain. There are many different areas in the country, and each one has its own climate. For example, if you want to escape from colder climates buying land in sunny Andalusia might be a good idea, but if you enjoy skiing then it could make more sense to buy property in mountainous regions like the Sierra Nevada.

Do I need to live somewhere close?

When choosing a home in Spain, many people opt for one that is situated close to their place of work. This makes sense, as it eliminates the need for a long commute and allows you to spend more time relaxing at home. Additionally, many people who purchase a home in Spain choose to do so near an airport, as this makes traveling to and from the country much easier.

How much do I want to spend?

The amount of money you want to spend will also affect your decision when buying land in Spain. For example, if you are looking for a cheap property then there are many different options available to you, but they might not be the most attractive properties in the area. Cheaper land can also come with restrictions on what can be built on. It is important to not fall for a deal that is too good to be true.

What type of obligations does the land carry?

Some land might carry obligations for building and providing certain amenities. It is important to know what you are buying and if there will be any restrictions or obligations you will have when making a land purchase on the Spanish property market. For example, the municipality might have plans to urbanize the land you are buying, in this case, in the future, you will have to negotiate the property price, make votes with surrounding property owners, or will have to sell your property.

Planning permission

Other options than building

There are many other options that you have when buying land in Spain.

Buying a brand new property

One of these is to buy a property that is already built. This can be a great option, as you will not have to go through the hassle of getting planning permission and construction permits. Additionally, there are many different types of properties available for purchase, so you are sure to find one that meets your needs and budget.

Renovating an existing property

When renovating a property in Spain, it is important to be aware of the permissions that are required. In general, the process of renovating a property in Spain is quite complicated, and it is important to make sure that all the necessary paperwork is in order before starting construction. You will need permission to build pools, move walls, and change the use of the home. One of the main things to keep in mind when renovating a property in Spain is that there are different regulations depending on the autonomous community within which you are renovating the property.

Costs of buying land in the Spanish property market

Land in Spain has an average price of 165 euro per square meter in 2021. However, the cost of land is cheaper in rural areas than in urban areas.

 

Buying land in Spain

There is a big distinction between rural areas and the main cities of Spain. This is because there is less demand for land in rural areas, and developers are not as likely to build new properties in these regions. Additionally, the cost of land is usually higher near airports and major cities. This is because there is more demand for land in these areas, and people are willing to pay a higher price.

Spanish Land buying

Land classification in the land registry

For urban planning purposes, we classify the land in the land registry into three main groups: Suelo Urbano (urban land), Suelo Urbanizable (land for development), and Suelo No Urbanizable (land not for development) (often known by users as rural land).

Urban land is that which the general planning of the municipality determines as such, either because it has all the necessary services and facilities (road access, water supply, drainage network, and electricity supply), or because it is largely consolidated by building. Urban land is also considered to be that which has been developed and urbanized as determined by the planning.

Suelo Urbano (urban land)

It is obligated to construct on these properties subject to the city’s or region’s “Planes de desarrollo urbanístico” (Plan General de Ordenación Urbana PGOU) or qualifying urbanization zones called “Planes Parciales”

Most of these territories are already developed and inhabited, with all of the urban amenities and infrastructures required for residential habitation in terms of high or low population density. They are characterized by facilities such as

  • Sewage system and drainage
  • Parks and green areas
  • Water, internet, and electricity
  • Sports facilities
  • Schools and colleges
  • Health facilities
  • Road access

Within urban land, there is a distinction between Urbano Consolidado (consolidated urban land), and unconsolidated urban land (Urbano No Consolidado, de Núcleo Rural o Urbano Especial),

Suelo Urbano Consolidado: This type of land is already finished built on and consolidated with all of the urban amenities and services required for a residential settlement. Consolidated land is already finished built on, and does not require you to undertake any building works on the property to make it legal.

Suelo Urbano no Consolidado: This type of land is not finished built on or consolidated, the Spanish government still wants to build extra on this land. The land’s owners are required by law to finish the urban fabric, conduct rehabilitation operations, interior renovation, urban remodeling, change of uses, rehousing, planning of the subsoil or sanitization of people, and others of the same sort.

Suelo No Urbanizable

Non-urbanizable soils are those that cannot be used for industrial, residential, or commercial purposes because they are exclusively intended for certain protected usages such as nature conservation, agriculture, or livestock. Other residential, industrial, or commercial uses are severely restricted and prohibited. The two categories within Suelo No Urbanizable are:

Suelo No Urbanizable Protegido: These are soils that have been designated “protected” for reasons such as nature, forest, and others, in order to preserve. In other words, these are lands that have the same protection as natural parks or nature reserves, and they are strictly prohibited to build or develop buildings.

Suelo No Urbanizable Comun (Terrenos, Suelo Rústico o Finca Rustica): This land is primarily used for agriculture and livestock production, and sometimes other uses such as residential and commercial development, subject to certain restrictions. This type of land is protected from urbanization or other uses that go against its natural or primary use of agriculture.

Suelo Urbanizable

Suelo Urbanizable or Developable land is land that is suitable for urban development, that is, it can be utilized in an urban transition. This type of land is still non-urbanized, but you can expect that in the future it will be. This means that in the future infrastructures such as water supply systems, electricity networks, sewage systems, drainage networks, road access will be needed.

In other words, likely the municipality will integrate them into an urbanization strategy, although they are not yet included in one. The owner of developable land has to pay for the urban transformation action of the land if the municipality decides to urbanize it.

Risks of buying land

Risks involved with buying land

While buying property in Spain has its own set of pitfalls, the same risks apply when purchasing land. Next to this, Spanish taxes such as the property tax and wealth tax must also be considered when owning land. When purchasing land, you should also bear in mind the following risks:

Future development plans around your land

When you buy land, there are always risks involved, especially when it comes to future development around the land you own. For example, the municipality may decide to urbanize the area around your land and ruin your view. Additionally, if you expect certain development, such as parks and shopping malls, there is always a risk that the land may not be developed as planned, or that the development may not go ahead at all. This can be due to a number of factors, such as changes in government policy or economic conditions. It’s important to be aware of these risks before you purchase land and to factor them into your decision-making process.

Unkown rights and obligations

When you’re buying land, it’s important to be aware of the risks involved. One such risk is that you may not be aware of all the laws and regulations that are associated with the purchase. For example, if your land has any water streams running through it, or if it’s located in a hunting area, you may not be aware of the restrictions that are in place. It’s important to do your research and to understand all the risks before you buy land so that you can make an informed decision. We advise contacting a property lawyer to analyze the obligations and rights that you have when you own the land.

Your land gets redeveloped by the local authority

There is also the risk that the municipality decides that your plot of land needs urbanization. This means that you will require to have water-supply networks, proper sewage systems, and road access to the land. This is a problem because you will have to pay for these infrastructures. If you are not aware of this problem, you could buy the land without knowing that these infrastructures will be your responsibility. This is frequently one of the most serious challenges you may have when purchasing real estate in Spain, since building costs can be very expensive, forcing you to sell the property.

Not obtain building permits or planning permission

Obtaining a building permit in Spain can be a difficult process, as there are a number of bureaucratic hurdles you must overcome. One of the main problems is that the procedures and regulations for obtaining a permit can vary from one municipality to the next. In addition, the process can be lengthy, taking anywhere from several months to a year or more. There are also times when the permits are denied, often without any explanation. This can be frustrating for property owners who want to construct their homes or business according to their plans. It’s important to note that these problems are not unique to Spain, and often a property lawyer can advise you on how to best go through the process.

Ownership of the land after you have purchased it

One of the risks involved in buying land is the possibility of a dispute of ownership. This can happen when the land is not properly registered in the land registry, or if there are any discrepancies in the documentation. If this happens, it can be difficult to resolve the issue and you may end up in a legal battle over the land. It’s important to make sure that you have all the proper documentation and to register the land with the correct authorities so that there is no confusion about who owns the property.

Get help from a property lawyer

Get help from a professional when buying land

Buying land in Spain can be a complicated process, as there are a number of things you need to take into account. It’s important to do your research and understand all the risks before making any decisions. We advise contacting a property lawyer in Spain to help you navigate through the legalities involved in purchasing land. By being aware of the potential problems, you can make an informed decision about whether or not buying land in Spain is right for you.

Cédula de Habitabilidad in Spain: A Complete Guide

The Cédula de habitabilidad or certificate of occupancy is an often overlooked but critically important form of documentation needed to live in any home within Spain. Contrary to popular belief, this certificate is necessary before moving into any home; otherwise, you may risk fines. The good news is, the Cédula de habitabilidad is relatively easy to obtain, and we’ll walk you through why it’s important, the different types available, when you’ll need it, and other essential information relevant to the process of obtaining it.

What is the Cedula de habitabilidad?

The certificate is an official document that confirms that a home meets the basic conditions to live in and is entirely legal in every respect. An authorized technical architect must inspect the property, ensuring that the building complies with a selection of sanitary, dimensional and safety requirements.

The Cédula de habitabilidad is necessary to connect basic utilities such as electricity, gas, and water. Generally, the certificate is valid for up to 10 years; however, this can vary depending on the type you’re applying for or where your property is within the country.

The Cédula de Habitabilidad is a document that assures that a particular home gathers all the minimum and necessary conditions of living. In the case of Barcelona, it uses Catalan law to determine this. It does not imply the legalization of the construction concerning its suitability for the use of the home or concerning urban regulations.

This document is, essentially, mandatory for every home, with the few exceptions that will mention in the following paragraphs. In other words, to live legally in a home, you will be required of this particular document. As mentioned before, consider that this is just an example of Catalan law (applicable to Barcelona). Depending on the law applicable to every particular territory in Spain, there might be differences. We can help you with more information on the particularities of this Cédula de Habitabilidad for your property. Contact one of our legal experts at SublimeSpain.

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The different types of Cedula de habitabilidad

There are three critical variations of this certificate that directly correspond with the property’s age or a particular stage of building. Logically, the law establishes stricter standards of enforceability for new homes. At the same time, the requirements for pre-existing dwellings, as of August 11, 1984, in the particular case of Barcelona, are more exiguous, as well as it establishes an intermediate regime for homes after August 11, 1984 and before the entry into force of the Decree that regulates the Cédula de Habitabilidad.

See the differences between the three primary forms of this document:

  • Cédula de habitabilidad de primera ocupación (certificate of first occupancy)

This type of Certificate of Habitability must be requested with all newly built homes. As previously mentioned, with newly built homes, the required conditions have been more modern and exigent, making it the most demanding type of certificate.

  • Cédula de habitabilidad de primera ocupación por rehabilitación.

This document refers to a home product or result of an intervention or rehabilitation process. It is necessary when there are renovations or reforms that can substantially modify the original setting of a home. This is the case, for example, of homes where there has been a redistribution of the original spaces.

  • Cédula de habitabilidad de segunda ocupación (renewal of occupancy certificate or second occupancy certificate)

This part is about an already built and previously inhabited home. It is the type of document that existing dwellings must request when the First Occupancy Certificate has expired. Essentially, it is more of a renewal of the initially granted certificate rather than a new one.

What information needs to be included in the application?

The requirements to process the documentation depends on the region. Next to this, the version of the certificate you need also will have an effect. The following information is crucial to include in any application:

  • Location: The address of the home in question.
  • Functional surface: Any surface that we can use or walk on within the interior of a home (floor space, built-in wardrobes, counter space, etc.).
  • Distribution: Which are any rooms or areas within the house.
  • Occupancy threshold: This is the maximum number of people who can legally be in the building simultaneously.
  • Identification: The identification should be from the authorized technician who conducted the inspection.

When is the Cédula de habitabilidad mandatory?

This documentation is required in virtually every situation involving a place of dwelling. While there are rare exceptions where this may not be considered mandatory, as a general rule, it’s safe to assume it’s completely necessary unless advised otherwise by a legal professional.

Let’s break down the four key scenarios where this certification would be required:

  • Renting an apartment or property

In any housing rental contract, it’s compulsory that the certificate be included in the documentation and provided to the new tenants. It’s important to note that a home without any Cédula de habitabilidad is not considered a home/place of dwelling and legally cannot be made available for residential use.

If you rent a home without this certification, there could be potential consequences for both parties involved. For example, the tenant will be unable to register for or connect basic utilities and services, and the government could subject the property owner to significant fines and legal hurdles. If you want to know more about renting out your property, we suggest you also read about rental income taxes in Spain.

  • Selling an apartment or property

If you’re involved in selling a home, you must obtain the Cédula de habitabilidad. There are very few circumstances where this may not be immediately required to process the transfer of ownership; however, without an explicit exemption, the seller could be subjected to high fines. The buyer may experience a range of difficulties in the future. We’ll identify the key exemptions from the certificate a little further down.

  • Requesting a mortgage.

For any mortgage or bank loan to be granted, there are several requirements that the person requesting the mortgage must meet. In Spain, it’s essential to have the Cédula de habitabilidad for your property. It’s important to remember that this certificate is necessary for the property in question to be considered a home legally. Hence, it’s impossible to discuss relevant mortgage or home loan rates without this documentation.

  • Living in a property

While there are several situations where people attempt to live in properties without the Cédula de habitabilidad, it is unlawful and puts them at risk of many complications. We’ve compiled the main consequences you may have when you live without the necessary certification.

  • Inability to register and set up basic utilities and services (such as water, gas, electricity, etc.)
  • Potential to be faced with a range of severe fines and penalties.
  • Inability to register for home insurance or apply for bank loans and mortgages.
  • Potential for eviction followed by limitation of access to public resources.

Exemptions from the Cédula de habitabilidad

There are very few circumstances where the certificate would not be considered mandatory. For example, if there was an agreement not to deliver the document in the sale of a pre-existing property, it could be for the following reasons:

  • The buyer may have plans to renovate or demolish the property.
  • The intended use of the property may differ from that of a home.
  • The certificate may be processed at a later date for a range of justified reasons. However, it will be necessary to present the application for a registered occupancy certificate. This will prove that the housing conditions are optimal for obtaining the certificate.

Remember, this is only an example applied to a sale of a property, but each case (renting, requesting a mortgage, etcetera) has got its different exemptions. If you are unsure about the exemptions that apply to your situation, it’s always best to consult with a real estate lawyer for clarity.

Who is responsible for the Cédula de habitabilidad?

In a rental property scenario, the Cédula de habitabilidad is the sole responsibility of the person who holds the property deed. They’ll be required to request it and pay for it.

In the sale of a property, the seller is generally expected to handle and pay for the certification process. However, in some situations, both parties may agree that it becomes the buyer’s responsibility to obtain the certificate.

What happens if I don’t have the certificate documentation?

Unfortunately, it can be relatively common to be sold a house or apartment without the Cedula de habitabilidad, which is often the case with uninformed buyers.

If you’re still going through purchasing a home, prioritize addressing the certification with the current owner to avoid any future complications.

When you cannot find your certificate or never received one, you can check with the Town Hall; they might provide a copy. If this proves unsuccessful, you’ll need to apply for a new one immediately and pay for the replacement.

Important processing information

  • How much does the Cédula de habitabilidad cost?

The overall cost of the certification can change based on the situation. However, two key things to consider are the standard rate to be paid to the local town council for processing the application and the architect’s fee for the inspection.

For example, the current cost of applying for the certificate in Barcelona is €42.60. This price is for the Cédula de Habitablidad de Primera Ocupación. However, this amount is subject to change based on the region you’re applying in, and the specific certificate you need.

  • How long does the application take to process?

On average, it may take a month or less to receive an official response on your certification status. However, the length of time for approval depends on the region of Spain you’ve made your submission.

If your situation urgently requires the Cédula de habitabilidad, a sealed request of the certificate may be sufficient instead of the physical documentation in many instances.

  • Can I get a duplicate of the certificate?

Absolutely! To request a duplicate of the certificate, you need to contact your local town hall with documentation proving you’re the legal owner of the home in question or nominate an authorized representative.

Please note that there is no need to process an additional application so long as the certificate is still considered legally valid for the property.

  • Is this certification the same in every region of Spain?

Depending on your location within the country, the application process, requirements, costs, timeframes, and more may vary. While the general process is mandatory in most regions, others like Aragón and Castilla la Mancha do not require it. In other areas, only the Cédula de habitabilidad de primera ocupación (certificate of the first occupancy) may be necessary. It can also happen that the Cedula de Habitalidad carries a different name in a region. In any case, it’s essential to review the legal requirements based on the region and consult with a legal professional if you’re unsure.

Buying, selling or renting a property in Spain is complicated and a little overwhelming at times. Our dedicated team of real estate and property lawyers at SublimeSpain are available for guidance through the Spanish legal system. We can handle everything from registrations to advice on legal proceedings. Contact us today to book an appointment with one of our property specialists.

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Buying a Holiday Home in Spain

Spain is a popular holiday destination and with good reason. The country has some of the most stunning beaches in Europe, the weather is fantastic (mostly), and there’s plenty to do for both adults and kids. But if you’re thinking about buying your own holiday home in Spain, it is best to do your homework first. While buying a holiday home is similar to buying a property in Spain. This blog will discuss things specifically related to buying a holiday home.

Why buy a holiday home in Spain

Spain is an excellent destination for holiday home buyers, and the country has plenty to offer for both adults and children. But there are other reasons why you may want to invest in an apartment or villa in Spain.

  • The weather: The Mediterranean climate means that the summers (June to September) are hot and sunny, and winters (November – April) can be chilly with mild temperatures. In the summer, temperatures in Spain often go well over 30°C and can be as high as 45°C in July and August in inland areas.
  • The houses: There is an extensive range of options for buying a holiday home in Spain. Depending on your budget and preferences, you can opt for a townhouse, country house, apartment, or even a villa.
  • The price: The property market in Spain has fallen sharply since the crisis, so prices are very affordable compared to other places. For example, you can buy a luxury villa with a private pool for as little as € 250.000. There are also great opportunities for renovation works or plots of land for building your own holiday home.
  • The beach: There are numerous beautiful stretches of coast in Spain, from the Costa Brava to the Andalusia Coast. The shores have a lot to offer in activities, restaurants and shops.
  • The freedom: You can go to your holiday home at any time of year, and you don’t need to worry about finding transportation or fighting the crowds when you’re on holiday in Spain.
  • A Spanish Visa: When you buy property above € 500.000 you can get the Golden Visa Spain. This gives you access to the Schengen area.

Spanish Holiday Home

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The downsides of buying a holiday home in Spain

Reasons to not buy a holiday home are:

  • The bureaucracy: Buying or selling a property is quite complicated in Spain.
  • The economy: There is still a great deal of uncertainty about the Spanish economy. However, this is slowly changing, and there are lots of positive signs, such as lower unemployment figures and an increase in foreign investment.
  • Insurance problems: It can be tricky to get an annual insurance policy for homes that are empty most of the time, so this needs to be considered.
  • Property taxes: For example, you need to pay municipal tax when you own a property in Spain, and failure to do so can result in huge fines and even jail time. Inform yourself about the tax laws in Spain before you buy!
  • Vacant homes: Many properties stand empty throughout the year. Unfortunately, this means that there is a risk of vandalism and theft. Next to this, Spain is not happy with empty homes and combating this with regulations.
  • Reliable agent: Make sure you use a reliable real estate agent with the required knowledge and expertise.
  • Property scams: Unfortunately, some fraudsters go to great lengths to scam holiday home buyers.

How to find the perfect location for your dream holiday house in Spain

Now you may be ready to buy a holiday home in Spain. You’ve read about the many reasons why it’s great to own a property there, but where should you start? Below are some ideas on how to find your dream location in Spain.

Consider the city:

Some people want to live near the beach, and others prefer the quiet countryside. If you’re unsure what you like, it can be a good idea to visit some cities first and decide if it’s really for you.

Consider what you want to do in your future holiday home:

Do you want to relax on the beach or by your private pool? Are you interested in history and culture? You can find accommodation for every type of holiday. Just make sure that you know what you like before looking for a location because this will make it much easier to choose.

Research the location and surrounding area at different times:

It’s difficult to get a good impression of an area if you visit it in high season when everything is hectic, busy and overcrowded. It would help if you also considered visiting the site at other times of the year (for example, spring or fall) to see how it looks like outside of tourist season. It can be surprising what you’ll find.

Look for a place that is close to an airport:

If you want to visit your holiday home with short travel times, this is something to keep in mind when looking for the ideal location. Just make sure you are not too close to an airport, because you do not want to hear planes all the time.

Pick a neighbourhood that has convenient amenities like restaurants and grocery stores:

The location of your future holiday home is essential because it directly affects the value and resale value. Research the area where you want to buy a vacation home in Spain. If there are not many amenities like restaurants and grocery stores, this might be something you need to consider before moving!

Consider the landscape:

Spain is a country with beautiful landscapes, so this should be one of the essential things you consider when looking for the perfect location. Mountains, hills, plains, beaches and historic towns are just some examples of what you can find in Spain. It depends on what type of holiday home experience you’re looking for!

Check out what people live nearby:

It’s also important to pay attention to the people who live in your neighbourhood. When looking for the ideal location, you don’t want to buy a holiday home near noisy or rude neighbours, so keep that in mind.

How do I find a property to buy in Spain:

There are a couple of ways to find your ideal property. In general, visit the area you want to purchase in, search online through listings, or hire an estate agent.

Visit the area:

Although it isn’t the most efficient way to look for a property, you can visit the area and go from place to place. That way, you’ll get an excellent overall impression of what is available. Just make sure that you have a plan before going on your search, and this will make things much easier!

Search through listings online:

There are a lot of great websites that can provide you with information on properties for sale. You’ll find lots of information and pictures, which will help you make your decision. The most important thing is to know what you’re looking for and not be afraid to ask questions! It’s much easier to find the perfect place if you have all the information. Examples of real estate sites are habitaclia.com, fotocasa.es, and idealista.com.

Hire an estate agent:

If there aren’t many listings in the area you want to buy a property, hiring an estate agent can be a good idea. They know their way around, and they’ll find the perfect place for you. Don’t hesitate to ask them; they should always provide honest feedback!

From our experience, it is best to hire an estate agent in combination with a lawyer to find a property when you don’t speak the language. The estate agent will help you find the property, while the independent lawyer will protect you. The savings you make by having insiders will be more than covered by the risk of the extra cost involved in making the purchase.

Holiday home in Spain

Hiring a property lawyer when a Spanish holiday home

When you are buying a holiday home in Spain, it is recommended to get a Spanish property lawyer involved. It is important to find a lawyer that speaks your language and has experience in the region where you want to buy. This way, there won’t be any unexpected problems or issues! It’s also best to make sure the lawyer is independent; you don’t want them to represent the owner. The lawyer can do a large variety of tasks for you, including:

  • Negotiating the price and terms with the owner means that they will try to lower the cost and/or include services in the contract.
  • Making sure all legal documents are in order: This is more complicated than it sounds. Basically, an estate agent or lawyer will make sure everything is according to Spanish law. If there are any irregularities in the contract, they will let you know about it.
  • Inspect the property: The lawyer also ensures that everything is in order and that there aren’t any hidden costs or problems with the building. This is a crucial step! Don’t think twice about spending a bit more to do this part properly.
  • Arrange the payment: The lawyer should make sure that all payments are made according to the contract and that you have proof of this. This prevents any misunderstandings or disagreements later on.
  • Inspections during your holiday homeownership: In some cases, it is also necessary for a lawyer to inspect the property from time to time. This is mainly the case if you have problems with the building, for example, if it needs maintenance work. However, this is only necessary in some exceptional cases and mostly depends on your contract and what you agree upon.

It’s always best to be careful when buying a property in another country! Make sure that you know all about the property and that everything is done according to the law. We also have a blog about property lawyer services for UK citizens.

What type of holiday home properties are there in Spain?

Many different regions of Spain have their unique character and charm, and they range from the mountains of the Pyrenees to the sunny beaches along the Costa del Sol. You can find a lot of different types of property, depending on what kind of holiday home experience you’re looking for. A few examples are:

  • Beach properties: If your idea of a perfect holiday is laying under an umbrella on some beautiful white sand, then buying a beach house is the way to go. Many people like to buy holiday homes in Spain due to the fantastic beaches and warm climate.
  • Mountain properties: Are you more into hiking and mountain biking? Then this might be what you’re looking for! Mountains are truly iconic in Spain, and there are plenty of opportunities for you to explore.
  • Town/city properties: Many lovely historic towns are perfect for a quiet getaway. The excellent public transportation system makes it easy to visit things like museums and art galleries without having to use your own car.

Beaches in Spain

What should you look out for when buying a property abroad?

Although it can be very exciting to buy a holiday home in Spain, there are certain things you should consider beforehand. Here are some of the most important ones:

  • Language barriers: The language barrier can make it difficult to communicate with people you’re not familiar with. If this is something that concerns you, make sure the estate agents or lawyer you’re working with speak your language. Otherwise, you might want to make sure that someone in your family or a friend speaks the language and can help out in case of an emergency.
  • Legal issues: Buying a property abroad is similar to buying one in Spain, but there are also some important differences. Make sure always to ask your lawyer or estate agent what you should be aware of. If they don’t seem to know the answer, it might be best to hire someone else.
  • Insurance: Having a Spanish holiday home can provide you with great memories for many years to come, but there are some additional costs involved as well. Holiday homes can be easily exposed to bad weather, thief’s, and utility issues. That is why it’s essential to make sure your property is insured, and this will protect you in case anything happens.

The Spanish property market is strong and offers good rental opportunities

The Spanish property market is becoming stronger every year. One of the main reasons is the tourism boom throughout Spain. The country has become a popular holiday destination, which has led to more demand for properties. On top of that, prices are rising as well!

There are many different things you can do with your Spanish property after making the purchase. You can choose to live in it yourself or rent it out. If you choose to live on your property, you will be able to enjoy all the comforts of home while on holiday.

If you decide to rent it out, there are many different ways to do this as well! You can put the house on AirBnB or similar websites, and it will be rented out to tourists immediately. Or, you can go with an ordinary tenant and rent the property through an estate agency, for example.

Spanish Rental income tax

When you rent out your holiday home, you will pay income tax (IRPF). Make sure you know the ins and outs when it comes to rental income tax in Spain when you plan on renting out your holiday home.

Holiday house in Spain

Popular locations for buying a holiday home in Spain

Many foreigners like to buy a holiday home in popular tourist locations such as:

Costa del Sol: The coastal region is famous for its fantastic weather and beaches. Costa del Sol has become one of the most popular holiday destinations for people all over Europe, which means there’s lots of demand for properties! Although it can be difficult to find affordability, many opportunities are available.

Costa Tropical: The Costa Tropical is between the Sierra Nevada mountains and the Mediterranean Sea. It’s a trendy holiday destination for Europeans during spring and autumn because of its great weather and affordability. There aren’t as many property options here as on the coast, but you can still find some fantastic deals.

Costa Blanca: Costa Blanca is a popular destination for holiday home buyers from the UK and Ireland. This area has a fantastic climate, lots of coastline, and many beaches. It’s challenging to find affordability here due to high demand from tourists, but there are still some great deals to be found!

Galicia: Galicia is a dream location for nature lovers and people who love fishing. It’s one of the best places in Europe to fish and is perfect for people who enjoy sailing. Although it can be difficult to get around, it’s a truly special place.

Andalucia: In Andalucia, you will find some of the most culturally-rich cities in the world. This region is what you might call a hidden gem in southern Spain, which means it’s becoming more and more popular with holiday home buyers across Europe! It also has great weather throughout the year, especially in places like Almeria and Malaga.

Catalonia: Catalonia is located to the north of Spain and is home to the city of Barcelona. This region is excellent for people looking for an affordable holiday home near a famous European city. Although it has become more expensive over recent years, you can still find some bargains if you’re willing to look around!

Sierra Nevada: Sierra Nevada is another hidden gem that’s located in the southeast of Spain. It offers breathtaking views and is home to one of Europe’s highest peaks, the Mulhacen (the third-largest in the Iberian peninsula). This area has a fantastic climate, and if you’re looking for affordability, this might be right for you!

Balearic Islands: The Balearic Islands are famous for their fantastic weather, beaches, and warm water. They’re most popular with holiday home buyers from the UK and Ireland because of their popularity among British tourists. Due to high demand, there aren’t many places where you can find affordability in this region. Cities you can find there are Ibiza, Mallorca and Menorca.

The Canary Islands: The Canary Islands are located off the coast of Morocco and are popular among Europeans who like to escape to warmer climates during the winter. The best time to buy in the Canary Islands is when you’re ready for somewhere new in your life because they’re not always very affordable!

There are many different regions to choose from when you want to buy a holiday home in Spain. The most popular regions are Costa Blanca, Costa del Sol, Costa Tropical, Andalucía and the Balearic Islands.

Holiday Property in Spain

What are the costs associated with buying a holiday home in Spain

The costs will depend on several things, including your budget and the area you want to buy in. Costs can include notary fees, registration fees, transfer taxes, exchange rate expenses, and stamp duty.

The average cost of buying a holiday home is around 10% – 15% of the purchase price. This means that if you’re buying an apartment for 200,000€, then your expenses will be at least 20,000€.

Why you should consider purchasing off-plan properties for sale in Spain

Most properties for sale in Spain are second-hand, with only a small percentage being newly built. This means that you can purchase a home at a much lower price than if it were to be made today.

Moreover, most new-builds are built-in popular coastal areas, which means they’re costly. You can save thousands of Euros by purchasing off-plan properties for sale in less exclusive regions. However there are many legalities and pitfalls involved when buying an off-plan property, so, it is best to get a lawyer involved.

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Declaracion de Obra Nueva: Meaning and When Needed

Whenever a new building is constructed in Spain, a series of administrative procedures and requirements must be followed, which are crucial to ensure the property is considered legal. The Declaration of a New Construction or the Declaracion de Obra Nueva is one of these key procedures. Our property lawyers can guide you through the whole procedure, below are the most important aspects.

What is the Declaracion de Obra Nueva?

The declaration of new construction is a legal document that contains all of the changes that have been carried out in a property, like the construction of a new building. This information is necessary to be documented in the Spanish property registry.

The deed can be written up before the construction has even finished, which tends to be the case for many development projects where investors want access to important information and plans before financing the project.

There are three main forms of this declaration, all of which need to be signed by a notary:

  1. Obra Nueva Antigua
    This particular form of “declaración de obra nueva” declares an edification, for instance a building, that was made years prior, with or without a license.
  2. Obra Nueva de Rehabilitación
    When updating a building that has already been built but that over the years has become obsolete or unusable.
  3. Obra Nueva in a proper sense
    There are two types, both of which will be the main focus of this blog. This will declare a new recent building or one which is being executed at the moment:

    1. Obra Nueva Terminada
      This is for when the building construction has already been completed.
    2. Obra Nueva en Construcción
      This version is for ongoing construction; however, the owner will need to submit a certificate from the architect to a notary once the construction is finalized.

What documents are needed?

In order to get a notary to sign this deed,a few different documents are required. Take into consideration that this is a global overview of the requirements, and that the documents listed below may not be needed for every form of Declaración de Obra Nueva (it is mainly focused on the Declaración de Obra Nueva Terminada).

  1. Building License from the Town Hall
    This license authorizes the work to be completed based on the building project prepared by your architect. In situations where the owner wants to legalize an old construction, it will also be necessary to establish the age through any of the following documentation: a certificate from the Town Hall, a certificate from a qualified technician/architect, or a notary declaration of the property.
  2. Ten-year Warranty Insurance (Seguro Decenal)
    It’s required for all new residential buildings to obtain this insurance to primarily cover any potential structural damages. However, exceptions can be made if the owner of the property intends on living there themselves.
  3. License of First Occupation (Licencia de Primera Ocupación)
    This is a license issued by the Town Hall, confirming that the construction has been built in accordance with the initial building project presented.
  4. Certificate of Energy Efficiency
    This certificate outlines the key information regarding the energy efficiency of the building. A qualified technician is required to issue this, and it’ll be considered valid for ten years.
  5. Final Works License (Licencia o Certificado Final de Obra)
    This certificate needs to be issued by a qualified technician or architect and essentially confirms that the construction has been completed in accordance with the initial building project. In some instances where the work is ongoing and this license is not yet applicable, the technician or architect needs to issue a certificate describing the works compared to the building project.
  6. The ‘Book’ of the building
    If you intend to sell your property upon completion, you’ll also be required to deposit the Building Book into the Property Registry. This is a detailed description of the entire building and all its functionalities.
  7. Identification of the occupied land portion through its geographic referencing coordinates

What’s the procedure?

Once you’ve obtained all of these documents and completed all the requirements, the next step is to bring them to a notary who will prepare the declaration and sign it in the form of a public deed. This is the official process of the Declaración de Obra Nueva.

The document will essentially declare that there is a residential construction to be built over a pre-existing plot. Once this signature is complete, you’ll then need to take these documents to the Land Registry to finalize a few other land and property details and ensure everything is officially legal.

When is the Declaracion de Obra Nueva needed?

A declaration of new construction is required in the following instances:

  • To declare a new construction is being built over an existing plot/land.
  • To declare an old construction that was previously built over a pre-existing plot/land. This is for houses or structures which were never recorded before.
  • To declare a new extension of a construction over a pre-existing plot/land. This is for homes constructing an additional room or a new floor.
  • To declare a previously built extension of a pre-existing plot/land.
  • To declare both old and new constructions, such as a garage, porch, pool, barbecue area, parking space/covering, etc.

What are the fees?

There are several fees and taxes associated with the process of obtaining the Declaracion de Obra Nueva. Some of the main ones include:

  • The notary fees to prepare the deeds.
  • Land registry fees to inscribe the Declaracion de Obra Nueva in the legal inscription of the land.
  • The Stamp Duty: This is 1’5% of the evaluation of the property.
  • Architect/technician fees and form submission taxes, amongst others, should be considered when budgeting for this process.
  • Additional costs related to legal advice from your lawyer/legal team that will make the optimal and easiest process for you.

It’s important to note that this entire process must be completed prior to applying for a mortgage. This is purely because the bank will be unable to value the property until it legally exists and they have an understanding of the size and other essential details.

Assistance with the Declaracion de Obra Nueva

If you need legal guidance or assistance through the complicated process of obtaining a Declaration of a New Construction deed, then don’t hesitate to get in touch with us. Our team of qualified real estate lawyers at SublimeSpain have a wealth of experience handling the documentation associated with this procedure. Contact us today for a consultation.

Buying Real Estate in Spain After Brexit for UK Citizens

Brexit is not a barrier for UK residents looking to buy real estate in Spain. However, the legal environment regarding investing in Spain after Brexit has, without a doubt, changed. Let’s discuss the ins and outs of buying real estate in Spain after Brexit, including legalities, pitfalls to avoid, costs and the process itself.

Moving to Spain in 2021

Owning a home in Spain is a dream for many, and the EU nation makes a perfect location for real estate investors. After Brexit, British tourists, including those with holiday homes and other real estate in Spain, can no longer visit and leave as they please. They can only stay in the country for a total of 90 days in any 180 days, after which they need a visa in case they wish to stay longer.

Post-Brexit, UK nationals are required to apply for a visa to show that they have the right to reside and work in Spain. You don’t need to be a resident to purchase a property. However, on a practical level, you need a bank account, and for that, you must have a permanent address and thus a visa.

For British nationals seeking employment when they move to Spain, you can expect a working visa procedure for Spanish looking to work in the UK. As much as UK nationals cannot work in Spain without a work permit, they can own real estate.

If you are a retiree looking to move to Spain, the visa process is simple. Similarly, it is straightforward for those looking to retire in Spain who don’t need to work.

When it comes to property prices, initial prices for real estate are expected to become costlier for British nationals. Also, investors can expect limited mortgage availability.

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Applying for Spanish Residency

Many British nationals who moved to Spain before Brexit have to apply for a permanent Spanish residence to legitimize their stay. Consequently, you cannot arrive in Spain as a tourist and apply for Spanish residency (unless you apply for the Golden visa). British citizens outside Spain who wish to apply for residency have to do so through the Spanish consulate in the UK.

As non-EU citizens, British citizens who wish to purchase real estate are permitted to apply for Spanish Golden Visa residency from 1 January 2021. More investors are taking advantage of the Golden Visa route to Spanish residency. SublimeSpain offers valuable advice regarding applying for Spanish residency from the UK and can outline the full procedure you need to go through.

Conditions for Spanish Golden Visa

Upon getting a Golden Visa, you and your immediate family members are given residence permits that can be renewed indefinitely, provided you maintain the investment. One of the best ways to acquire a Spanish Golden Visa is by buying real estate. However, you must purchase property worth at least €500,000.

Alternatively, investing in shares in a Spanish company or bank deposits of at least €1 million makes you eligible for Spain Golden Visa. A third option is investing in Spanish public debt (at least €2 million). One of the profound benefits of the Spanish Golden Visa is that there is no minimum stay requirement. Also, you can apply for permanent residence in five years and citizenship and an EU passport in ten years.

Relevant documents when buying property in Spain

British nationals seeking to buy properties in Spain should bear in mind that the entire process can be quite lengthy and time-consuming. During the application, you are expected to present several documents including documents with the details of the property they intend to purchase.

Also, British nationals are required to provide information regarding the present owner of the property, for example, their personal information. As is the case with many other countries, the real estate buyer must present his personal history, current residence, and means of income.

Are you looking to buy real estate in Spain?

When buying real estate in Spain, we highly recommend doing your own research on your chosen market or getting an expert involved. In general, British nationals seeking to buy real estate in Spain after Brexit should hire the services of experts that are well-grounded in the existing laws. The importance of sound legal and tax advice cannot be overstated.

At SublimeSpain, we are here to support you every step of the way and connect you to reputable estate agencies and developers. Also, we will help you navigate the often complex channel of paperwork and utmost due diligence.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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Buying Property in Spain: Everything You Need To Know

Buying a property in Spain can seem like quite the task, but it doesn’t have to be. Here we will cover what you need to know before buying Spanish property and some of the best ways to find properties for sale. This article is meant as a guide for those looking into purchasing their own home or investment property in this beautiful country to make an informed decision on whether or not Spain is right for them.

Is buying property in Spain a good idea?

There are two reasons why people would want to buy a property in Spain. The first reason is to live in Spain, and you can do this by buying a property to live in full time or by buying a holiday home. The second reason is to purchase property as an investment.

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Buying property in Spain for living

Spain as a place of living – Spain is a beautiful place to buy a house. People love Spain for its weather, beaches and culture. People live day by day relaxed and stress-free, making the most of their time relaxing on the beach or enjoying every single moment to spend with family. Of course, there are many more things that you can do (if you want), but this is the typical Spanish way of living.

Spain is a trendy place to live because of its nice weather and beautiful beaches and its fantastic culture and history. Many people decide to buy property in Spain considering this since we have several different options depending on our needs and budgets: apartments, villas or even luxury houses with private swimming pools.

Buying property in Spain to invest

There are many reasons why investing in Spanish property exists. The first reason is the same as the previous one: it’s due to great weather and beautiful landscapes such as beaches and its great culture and history. But there is another important thing in Spain that makes it attractive for property investment.

Spain is one of the most visited countries in the world. Millions of tourists visit Spain every year attracted by its nice weather, beautiful beaches and fantastic culture. With this great tourism industry comes a very strong commercial property market with a generous offer in different sectors, including retail, commercial, office and logistics.

The second reason people would buy a property in Spain as an investment is its economic stability. Spain has been showing important economic growth for several decades now, attracting many investors looking to invest in the Spanish economy.

Beach view - Property in Spain

Property buying Spain: Influence of nationality

Whether you are a Spain resident or non-resident, you can still buy a property in Spain. However, there are some differences that you need to take into consideration.

  • Non-residents: Being a non-residence requires a unique NIE number, “Número de Identificación de Extranjeros,” for the sale to happen following the Spanish property legislation. We can help you get your NIE, contact us, and our lawyers will take care of it.
  • Resident: There are no minimum requirements for residents or citizens of Spain when buying a property in Spain.

Language and buying property in Spain

This has proved to be a significant constraint in closing deals unless you speak fluent Spanish. This can be a barrier to those who do not know the language as you must understand Spanish legal documents and regulations.

Buying property in Spain has some peculiarities. If you want your first deal, we recommend hiring a bilingual real estate agent with the experience to help you through all stages of buying: from finding your dream house to closing the deal.

We also advise you to find a bilingual, independent lawyer with experience in Spanish land and property law to help you buy your property in Spain. This lawyer will help you throughout the buying procedure, ensuring that all procedures are correctly followed and done legally. A good lawyer can also offer you translation services if your Spanish is not fluent enough to read documents in the Spanish language. We offer these services, so do not hesitate to contact us for further information.

Property in Benidorm Spain

How to choose a location to buy property in Spain?

Spain is an attractive choice when considering buying a property, but finding the right one requires a significant effort. First, you will need to ask yourself the practical question, “what do you want?”.

  • Do you want to buy a property as an investment or for your personal use?
  • Are you looking for a permanent home or seasonal retreat?
  • Are you looking more to the South of Spain, Mediterranean coast, Costa Blanca, Costa del Sol, Costa Brava, etc.?
  • Are you looking for a mountain view and cooler temperatures?
  • Are you looking more to the North of Spain, Atlantic coast, Costa Daurada, etc.?
  • Are you looking for beach views and warmer temperatures?
  • Are you looking for an apartment, country house, villa, or bargain property?

As you can see, you have to ask yourself many questions before you start your property journey. Next to knowing what property type you are looking for, you also have to ask yourself if you want to work with a real estate agent. When buying in a foreign country, dealing with a property expert from that country is always recommended. When buying property in Spain, it is best not to run into any problems because they are harder to fix when you don’t know the property scams, pitfalls, and right pricing. A trusted real estate agent can help you with this.

Getting a real estate agent involved

You can find a real estate agent in most Spanish towns and cities; we recommend choosing the most reliable one, not necessarily the cheapest. They usually charge between 3% and 6% of the final purchase price. If you are looking for a free service, make sure that you know what they will be offering in return (this is where property scam cases come up).

We have defined three general types of real estate agents you can choose from:

Agency real estate agents

This type of agent is responsible for the business of selling properties on behalf of different owners, representing them legally. They can also help people find properties on the market.

Independent real estate agents (freelancers) / Personal shoppers

Offer the same services as agency real estate agents but are not representing a specific seller or owner. They usually work remotely, online, and work to get the best price for your property.

Property developers

They design and build properties but do not sell them. Once the construction is over, they advertise and sell rooms or flats to individual investors or companies. If you are interested in buying a property from a Spanish developer, you will be required to pay additional costs for the new build, such as up-front payments and deposits. Sometimes this fee is added to the selling price of the property, so the developer can recover fees they have paid out before selling it to you. This is not to be confused with the developer’s profit margin, which should remain separate.

Buying Property in Mallorca

Charges for buying property in Spain

The average property commissions range from 1% to 5%. The percentage of the house’s total value is usually lower for properties that are not located in large cities, while it tends to be higher if you are buying a home in Madrid or Barcelona.

Finding a property on the internet

The internet has become an excellent source for finding real estate listings and contact details. In addition to this, there are many property portals both in Spanish and English that provide more information on each listed property, including photos, the current status of the projects and the number of bedrooms and bathrooms. On portals like Idealista, you can find customer comments concerning their experiences with the listed real estate agencies.

Some realtors offer a service called “virtual tours”, which are 360-degree images of the property that allow you to feel as if you were there or even walk through it to see all parts of the building.

Popular locations to buy a house in Spain

The most popular areas to buy a house in Spain are the coastal regions – Costa Blanca, Costa del Sol, and Costa Brava – because of their mild climate and beaches. They are also popular because they are close to Valencia, Alicante and Barcelona.

The Costa Blanca and Costa del Sol are both in the south of Spain. The Costa del sol has a dry climate with little rainfall, while the Costa Blanca has a more humid, rainy season from October to March.

The Costa Brava has a milder climate than the other coastal regions and is more protected by mountains, and it also has more rainfall and fogs than the other two coasts.

Costas: The coast can boast of many attractions, such as international airports, big cities close by and good nightlife, which attracts foreign people looking to move permanently to Spain

Spanish Property in Tossa de Mar

Take the legal steps

Unless you want to go through the stress of buying a home yourself, we recommend hiring a Spanish property lawyer to help you through the stage of legal requirements stated below.

Signing the “contrato de Reserva”

A purchase contract fee of 3.000 to 6.000 euros expresses your interest in buying a property and gives the power to remove the property from the listing within a duration of 14 to 21 days.

Sign the “contrato de Arras”

This is a private contract that requires you to pay a deposit of 10% of the property worth within ten days.

Get the Nota Simple

A document provided by the registry of properties that identifies the proprietor of the property.

Certification of domain and charges

This document guarantees the genuineness and fiscal security of the property, which is signed directly by the registrar. Additionally, it includes details on charges or debts, mortgages, embargos, or pending lawsuits on the property at the time of issue.

Inscription in the Registry of Properties

This process transfers the property’s ownership from the previous owner to you.

Communication to the Catastral office

A notification from the registry of lands and buildings regarding your property acquisition is sent to the Catastral office. This division produces a map of properties with their respective values. A tax is charged for the updating of this file.

Changing the name on utility bills

You need to get new bills with your name since the property’s previous owner used for utilities is part of the records.

Copy of title deed

When making the purchase official, you can receive an Escritura. This document is the physical proof of the property.

Community ownership documents

It’s mandatory for the person buying property in Spain to contribute to the community in Spain, an amount based on how many square meters you own.

Buying a property is complex, and our property lawyers can help you with the entire process. Contact us today, and get a free quote.

Buying Property in Mallorca

Property taxes and costs

When you buy property in Spain, many taxes and costs are involved. Among these costs are property transfer tax and notary fees. If you want to rent out your property, other costs will also play a role. We have dedicated a post about the costs involved when buying property in Spain.

Notary costs

These are fees charged by the notary in charge of writing up your promises related to ownership. This cost can be shared between both parties or paid entirely by only one party.

Agent fee

An agent is a person who works with the specific goal of finding a property for you. The buyer and seller can each pay a fee to their agent, or the agent can work together and agree on one fee from the buyer.

Lawyer fee

The property lawyer’s task is to ensure that all legal proceedings are carried out correctly. The lawyer will create the (governmental) forms and contracts needed to acquire the property. They will also make sure that the rights of both parties are recorded in the documents, that all taxes are paid in full, and that your real estate agent or other party involved is not doing anything illegal.

Buying land to build a new property in Spain

When you want to build a new property, several steps are involved. Firstly, of course, you will need to buy land in Spain where you can obtain building permits for. If you don’t have the patience required to follow through with finding land, SublimeSpain has specialists who can help you buy land and obtain the appropriate building permits.

Secondly, you need to choose an appropriate location for your property. You need to be specific on the area of your property, the orientation you want it to have, whether you want a garden or have other specifications are taken into consideration.

Thirdly, you will need to get the architectural plan approved by the town hall (Ayuntamiento) before the building starts. This step can take up to 6 months or longer since the construction must fit with the local architecture of the area.

Finally, once all requirements are met, you will begin construction. This can take several months depending on the size of the building and, more importantly, where you live within Spain.

Since this process can take some time, SublimeSpain has experts who can speed up land buying and obtaining building permits. Contact us today, and our lawyers will help you with your case.

Spain Property Buying in Ibiza

Taxes to buy a house in Spain

The amount of property tax in Spain charged by the Spanish government varies depending on whether you purchase a new property or a resale property. The term “New” refers to a property that has never been sold before, and it’s usually purchased straight from the developer in this case. The term resale is used to describe properties that have previously been sold.

New property taxes

New property owners will have to pay the following two property taxes:

  • VAT (IVA): 10% of the purchase price.
  • Stamp duty: 1.5% of the purchase price. The stamp duty is paid to the Spanish land registry, and it is a kind of land registration fee. The stamp duty needs to be paid for every new property purchase, and it’s one of the costs that need to be included in your budget when buying a house in Spain.

Resale properties

There is only one tax on resale property. That is the transfer tax (Impuesto de Transmisiones Patrimoniales/ITP in Spanish). The amount you pay depends on the price of the house. It is less expensive when it is cheaper and more expensive when it is more expensive. Transfer tax depends on the location you are buying the property, and it can be around 8-14%.

Different types of land you can buy in Spain

Spain has an abundance of different landscapes, climates, and views, which means that you can easily find the type of property or plot of land for your needs. Here are some of the most common types of land in Spain:

Mountain land

Extremely steep or irregular plots that are difficult to access. You can find areas in the mountains that have been used for building but it is quite rare.

There aren’t many opportunities to buy land with a view over the sea since this type of property is sought after and is, therefore, very expensive.

Plots of land on the outskirts of big cities

Generally speaking, these are more affordable than central areas, but there is more building involved to make them developable. The construction process also takes longer because of local legislation, which forces you to follow stricter codes when building.

As far as purchasing plots of land are concerned, the most important thing is to consider that it is an investment and not just a purchase. You need to be sure of what you are buying. However, there are plenty of options available for any budget.

Buying land in Spain

Different types of houses you can buy in Spain

There are also different properties you can buy in areas close to cities depending on the size you want and where you want it to be located. The following are some of the most popular:

Apartments

In most cases, this refers to an exclusive housing development where you can find both properties for sale or rent. There are many different types of apartments, and depending on the location, they will be more or less expensive. Some of these can be seen as bargain properties compared to other countries.

This is a property designed for one family only, which consists of at least two rooms plus other ancillary services such as bathrooms, etc. It can be found in the countryside, but it is rare.

Townhouses

It is an urban building with two or more floors with at least one wall shared with another property, usually in its courtyard or garden. They are discrete buildings, but they do have a lot of advantages. There is less land involved, so prices tend to be more affordable, and there is a greater chance of getting a roof terrace or balcony.

Villas

The traditional Spanish villa comes to mind when you hear the word “Spanish dream home”. They are generally detached houses with lots of space and gardens. There are also some villas in big cities like Madrid, Barcelona or Valencia (although they tend to be extremely expensive). Still, most villas are located on the coast, where they are mainly used as holiday homes.

Finca’s

Finca’s are a type of rural property found in Spain. They are typically used for agriculture or livestock farming, but can also be used for forestry. Fincas can be owned by individuals, families, or businesses. They are very interesting to buy, however, come specific issues on registration and use that need to be considered.

Castles

They are the most exclusive properties in Spain, and they tend to be located in rural areas with stunning views. Even though castles in ruins can sometimes be purchased, very few of them are in a condition that would allow you to live there.

Property spain search

The most expensive places to buy a home in Spain?

Property in Spain can get very exclusive and expensive. This is not just the case for houses but also if you are looking for land to build on. There are, however, some cities where property prices are particularly high.

Formentera

Formentera is so small that their property prices reflect on the island itself. If you are looking for a bigger house with stunning sea views, this is the place to go look.

Deià

It is a very picturesque mountainous region. The houses there are built on the hills and have beautiful views of the mountains.

Sant Joan de Labritja

Sant Joan de Labritja is located in Mallorca, which is one of the reasons why its so popular. It has a very similar landscape to the rest of the island, but it is more exclusive.

The town of Ibiza

This is the most exclusive place in Ibiza. It has stunning houses, some even with private beaches, golf courses, pools and spectacular beach views. It is considered a party island by many and a popular holiday destination.

The capital of Gipuzkoa

The houses there are very modern, and they have great outdoor spaces. The town of Bizkaia is a great place to live in if you want an exciting social life and a bustling city life.

San Sebastian

If you want to live in a big city with mountains and the sea nearby, this is a great place to go. It has great nightlife, great restaurants and is very multicultural.

Baqueira in Lleida

This is a great place for people who love winter sports and nature. It is located in the Pyrenees mountains, and it has ski resorts nearby.

Lawyers for property buying

Frequently asked questions:

What are common pitfalls when buying Spanish Property?

You need to be careful that you don’t fall for some common pitfalls when buying property in Spain.

  • Understanding all the hidden costs
  • Getting Illegal mortgages
  • Buying a property that had an incorrect renovation
  • Not reading your contract in detail
  • Bad timing
  • Lack of research in the area
  • Not having a proper estate agent

Should you buy or rent Spanish property?

There is no correct answer to this question. It depends on your circumstances and financial situation. If you are looking to settle down in Spain and plan on living in the country for an extended period of time, then buying might be your best option. If you are only visiting for a few months and not plan on coming back, then renting is the best choice.

What is the NIE Number?

The NIE number is the identification code used for foreigners who are not residents of Spain. The number is required to open a bank account, apply for an identification card or passport, enrol your children in school etc. Getting one varies depending on whether you live in Andalusia, Catalonia, Madrid or other regions.

Can I get a Spanish Visa if I buy Spanish Property?

You can get a Spanish Golden Visa if you buy Spanish property that is worth more than 500,000 euros. The Golden Visa is a residency card that allows you to live and work in Spain. With this visa, you also get the ability to travel freely within the Schengen zone of EU countries.

When should I go on my viewing trip?

This of course is a personal decision and it depends on your individual circumstances. If you will be living in the area of your Spanish house or near enough, then going at any time would make sense. If not, we recommend going during the high season of your chosen town. That way, you get a feel for what it is like during peak times and can get a sense of what it’s like to live there. If you go during the off-season, it might look dead and not so exciting, affecting your decision to buy a house in Spain.

How long should my viewing trip last?

We recommend between 5-7 days to properly get a feel for the place. Of course, it depends on how much travelling you want to do but at least this time should be enough to visit the area, get an idea of what life is like there and decide whether or not to buy Spanish property.

Do I need to do a property surveyor for an inspection?

There is no need to hire a property surveyor for a viewing trip or an inspection. However, if the property looks sketchy, odd or in disrepair, it might be worth paying for one. But most importantly, if you are not perfectly comfortable with the house and aren’t sure of its state, that’s when hiring a surveyor makes the most sense.

Where do I start my property search?

There are many different sites where you can search for Spanish properties to buy, but the simplest and quickest way is with the help of a property agent. They will be able to show you the most suitable houses in your price range and make sure you don’t waste time viewing properties that are not worth buying.

Can I purchase a property from my home country?

Yes, you can! You can buy through SublimeSpain with the Power of Attorney. With this, we will be able to take care of the property purchase in Spain for you. However, you will have to visit a Notary in your home country. Contact us, and we will explain this buying process to you.

Beach view from Property in Spain

When is the best time to buy Spanish Property?

The property market in Spain is on the up at the moment. This means if you plan to buy property in Spain, you are buying in a seller’s market. It might be worth waiting until the market calms down a little if you are in no rush. But if you want to buy right now, there is excellent potential for long term growth both in capital and rental income.

That being said, prices may also vary depending on the area and type of house you are looking to buy. You could say that some places will always be popular such as the Costa del Sol (i.e. Malaga, Marbella, Fuengirola etc.), Costa Blanca (i.e. Alicante, Torreviaja etc.), Costa Brava, (i.e. Palamos, Tossa de Mar, Blanes etc.) Balearic Islands (Mallorca, Ibiza etc.), and the Canary Islands (i.e. Tenerife, Gran Canaria etc.).

Can I get a Spanish mortgage?

It is possible to get a Spanish mortgage, but the requirements tend to be strict, and you will need to have a certain amount in savings. Remember that Spain also has 100% mortgages available, which means you can buy a house without paying any deposit. The thing about Spanish mortgages is that they vary significantly from bank to bank, so it might be worth looking around to find the best offer for you.

Do I need a Spanish bank Account to buy property in Spain?

You don’t need a Spanish bank account to buy property, but it can make your life easier. That way, you can manage all your Spanish accounts in one place.

A word from SublimeSpain

Buying a property is a complicated venture, and it is recommended to get property experts involved. We can help you with everything through a power of attorney contract. This way, our lawyers will be fully protected during your purchase. We can provide this service to you and make acquiring your property in Spain easy and safe. Contact us for more information and get a free quote.

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Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Costs Buying Property in Spain: Taxes and Services

Spain has no shortage of excellent property options for commercial and residential purposes. Spanish property prices are relatively lower than in many neighbouring countries and capital cities. Let’s explore the ins and outs of costs and fees for buying property in Spain.

Can foreigners buy property in Spain?

Having property in Spain is an alluring prospect for many foreigners, both EU nationals and Non-EU nationals. Foreigners can buy property in Spain and take out a Spanish mortgage, even if they are non-resident. That being said, varying tax implications may apply between resident and non-resident buyers in Spain.

Buying property as a foreigner might not be the most straightforward process, but Spain is very welcoming for foreign investors. Before the purchase, you must have a NIE number (financial number).

Golden visa program

Under the Spanish Golden Visa program, foreigners can get a residency visa after investing more than 500,000 EURO in Spanish properties. A Golden Visa is a viable option for investors from outside the EU.

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Costs you can expect when buying property in Spain

It’s essential to be aware of the Spanish housing market quirks, regulations and taxes in Spain before purchasing a commercial or residential property. As a buyer, it’s your responsibility to pay for all costs and taxes associated with buying a property.

Property transfer tax

When buying Spanish property, the property transfer tax is at 6–10% for existing properties or 10% for new properties VAT (or IVA) fees are only 10% for new properties.

Rental income tax

The applicable tax should be submitted and paid to the local Spanish tax office regarding rental income. The income tax rate is 19% as of 2021 for the EU. However, You can deduct the relevant expenses (including mortgage interest) from the gross rental income. In our article about rental income tax in Spain, you can find more information about the rates, deductibles and process.

Insurance costs

Property insurance isn’t mandatory in Spain. However, some mortgage companies may have it as a requirement. In such a case, you might be required to take some form of insurance coverage before signing the mortgage contract.

As much as insurance may not be a legal requirement, we highly recommend taking insurance for both building and contents as a reasonable consideration to protect your investment from various risks.

Capital gains tax

Capital gains realized on Spanish real estate are subject to a capital gains tax, and the tax rate varies per property and is typically progressive based on the income itself. After selling your property in Spain, you must pay applicable capital gains tax after considering all deductions and allowances.

When purchasing property in Spain, we highly recommend keeping digital and hard copies of all invoices concerning legal fees, notary fees, property register fees, among other expenses. Also, you should keep copies of all licenses and invoices in case of property renovations and other building work on an existing property. Consequently, you can offset such expenses against capital gains when you sell your property, thus reducing Spanish capital gains tax.

Our tax advisors can help you make more informed decisions concerning applicable deductions and allowances depending on specific autonomous regions in Spain. We advise on the best strategies to reduce your capital gains tax liability.

Other costs involved

Additionally, you have to pay notary costs, title deed tax, and land registration fees, usually set at 1–2.5%. There are no fixed fees for lawyers or real estate agents in Spain, but you can expect them to range from 1-7%, depending on the level of service needed.

Is buying real estate in Spain worth it?

As always, location is vital when it comes to real estate. Depending on the specific location, buying property in Spain is an excellent long-term investment for both locals and foreigners. Also, it’s a viable option for investors looking to get residency quickly in the beautiful European Union country.

Some buyers apply for a mortgage, while others purchase without obtaining finance when it comes to property financing. Many Spanish and international banks provide mortgages services, with some of them giving tailored deals for foreigners from specific nations.

Buying vs renting a property in Spain?

Buying or renting in Spain primarily depends on your specific circumstances. For example, most people have limited access to finance, thus opting to rent, which involves a far less financial outlay compared to buying.

If you’re moving to Spain long-term, buying may be more cost-effective. However, renting may be a more prudent choice for a short-term stay or those unsure how long they will stay in Spain.

As with many other nations, both have pros and cons to consider. Thus it would help if you tried to make informed decisions.

We recommend checking the Spanish property market forecasts for speculative buyers before investing or, even better, seeking advice from a professional.

Legal, business, and accounting solutions in Spain

As much as it’s not a legal requirement to purchase property in Spain assisted by a qualified expert, it’s highly recommended that you do. Buying a property is one of the biggest investments people make. So, why take the risk by not obtaining professional advice?

Spain has it all and with the proper due diligence and professional assistance, properties in Spain can provide to be beautiful homes and viable investments for years to come. We offer property buying guidance in Spain which is full-service and will make your purchase safe, secure and easier. We can take care of many processes for you utilizing the power of attorney. Contact us for more information and a quote.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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