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Buying property in Spain - what you need to know by Spanish property lawyers

Buying property in Spain, whether in Andalusia or the Canary Islands is a significant money investment which needs to be studied in detail. If you have fallen for a house near the sea or found a bargain property on Costa del Sol you will need to get familiar with the legal aspects of the purchase. Comparing the price of the square meter is recommendable, but also finding out the market value of the building or piece of land for sale. This way, once you meet the property owners or real estate agents in Spain you will have a clear idea of what you want to buy: either a cheap flat near the historical centre in Malaga, a luminous apartment in a village like Nerja or a luxury villa in Marbella.

Since the real estate agency only connects the buyer and the seller, it is essential to have all documents reviewed by a professional lawyer. Property lawyers take care of the conveyancing and make sure that the transaction, the contract and the property itself comply with the Spanish laws, which may vary depending on the region. Moreover, they can calculate the applicable taxes and additional costs for you, acting as accountants. But most importantly, hiring
Spanish property lawyers who speak English will help you understand the whole procedure of buying a house, as well as communicating efficiently. In the following section we will answer many of the usual questions that arise before acquiring a new Spanish property.

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First steps and property conveyancing

If you have decided to buy property in Malaga or any other part of Spain, the first step will be to apply for a NIE (identification number for foreigners). It is also highly recommendable to have a Spanish bank account or in a bank which has offices in Spain, to speed up tax payments. As for the taxes that will have to be declared, it is important to consider the Non-Resident Income Tax (IRNR, for its initials in Spanish) for “income obtained in Spanish territory by natural and legal persons who are not residents of Spain”. Investors who purchase properties worth at least €500,000 can apply for Spanish residence.

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In Spain many people choose to buy a land and then build a house that suits their needs and tastes, in a rustic location or within the city. This initiative requires a prior selection that implies steps that range from “the correct location to getting the necessary administrative permits.” The location of the land in which the property is located has a great impact on its economic value. In case of a rural Spanish property, it is recommended, in addition to acquiring a good view in a natural environment, to consider the real possibility of building on the site as well as the surface of the land. As in other types of purchases, it is important to find out if there is no embargo or mortgage guarantee on a plot of land for sale in Spain. It is essential to go to the Land Registry to verify the land registration situation and go to entities such as the Town Planning Department of the municipality, where the potential buyer can also verify the urban situation of the land, making sure that the construction on this land is feasible.

Can I get a mortgage to purchase a house in Spain?

Banks have made it easier for expats and non-residents to purchase a house in the Spanish territory. As a result, it is possible to apply for a specific mortage for foreigners. Generally speaking, banks give 80% of the total price of the asset value.

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What are the best places for buying property in Spain?

Experts highlight the importance of choosing the right location. Apart from the central areas of Madrid and Barcelona, coastal areas and specifically the Costa del Sol in Malaga are said to be the best places for investing within Spain. The Costa del Sol offers cheaper prices than other regions, sunny weather most part of the year and a great variety of leisure resorts.

Can you still buy Spanish property after Brexit?

The biggest changes affecting British citizens with properties in Spain will be the non-resident tax and the inheritance tax, which are expected to raise from 19% to 24% once Britain leaves the European Union. Furthermore, non-residents who rent their homes in Spain will not be able to deduct letting costs.

Is buying to let an interesting option?

Owning a house in Spain and renting out as an additional source income can be indeed an interesting investment. However, it is important to calculate the tax burden to make sure it works out profitable. For more details on this topic, we encourage you to read our section for holiday lettings and check out the latest changes in the Spanish laws in our news section.

In case you would like to learn more about any of these topics regarding property purchase in Spain, don’t hesitate to contact us by phone or drop us a line using the contact form on this page. We will contact you as soon as possible.

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Legal & Tax Help is a law firm based in Malaga (Andalusia) specialising in Spanish property law, tax and all legal aspects that are of interest to the English speaking community in the south of Spain.