If you are planning to buy a flat in Spain, the first thing to do is to look for information before you decide on one. So, pay attention to the steps we indicate. Only after you have read in detail how to buy a flat in Spain, will you be able to do so in the best conditions.
Spain has become a popular destination for foreigners looking for a holiday home or somewhere to invest in real estate. There are also many people who change cities in their own country, for work, studies or simply because they want to.
For this reason, Equinox Urban Housing is dedicated to simplifying the process for you. Since we believe that real estate is more than just selling and buying properties, we go the extra step of ensuring that you will feel totally at ease when you leave your real estate matters in our hands. You can safely buy or rent an apartment in any part of Spain through Equinox.
To get you started, here is a Spanish property buying guide that will give you a clear understanding of how to buy property in Spain safely. It includes information on the buying process, the documents you need and the pitfalls to avoid.
Who Can Buy Property in Spain?
There are no restrictions on buying a house in Spain. Anyone can buy property in Spain, whether an apartment, a house or land. Also, since the Spanish government encourages foreign investment, anyone who buys a house worth more than €500.000 can apply for a Golden Visa.
Requirements and Documents Needed
Like any other part of the world, buying Spanish property requires some documentation. Luckily, buying property in Spain as a foreigner is not much different to that of the locals. The only additional thing you need is the NIE (Foreigners Identification Number), a unique number that is essential when carrying out any transaction in Spain. You can obtain the NIE from the Spanish consulate in your home country or from a police department in Spain.
Having a bank account in Spain is mandatory as you will have to consider payment of utilities, taxes and community expenses related to your property.
Likewise, once you become a property owner in Spain, it is convenient to appoint a tax representative in order to help with tax returns.
How to Buy Real Estate in Spain: Process and Conditions with Sellers
Though the buying process may defer, depending on the type of property and the financing method, the process of buying property in Spain will most likely include the following phases:
Step 1: Budget for the Purchase and Related Costs
If you want to buy a house in Spain, you must identify the average selling prices of properties in your desired location. The easiest way to check prices is by going through the real-estate sale platforms available in Spain. Other costs of purchase to add to your budget include:
- Property transfer tax of 5 to 10% depending on the buyer's age for existing properties and a 19% Vat for new properties.
- Notary and Public Property Registry fees of 1.5 to 2.5% depending on purchase price.
Step 2: Get your NIE
You should get an appointment with the Spanish Tax Office to obtain your tax identification number (NIF) as it is essential for all legal and financial activities in the country. The documents required when applying for the NIE/NIF include your passport, the EX-15 application form duly filled in and a valid Spanish visa for non EU residents.
Step 3: Open a Spanish Bank Account
It is necessary to open a bank account before you carry-out any purchase in Spain. This account will be need for any transaction throughout the buying process. To open a Spanish bank account, you need your passport and NIE. Note that you should declare at customs any amount in cash coming from abroad and exceeding €10,000.
Step 4: Search Properties in Spain
Most private owners in Spain sell their houses through online platforms as well as real-estate agencies. Therefore, you can easily explore the available apartments for sale through these platforms. Most websites have price, size and location filters that help buyers narrow their search to their most desired properties in their preferred locations.
If you are sceptical about online searches, a real-estate agency like Equinox can help you find your ideal property without necessarily travelling to Spain.
Step 5: Choose Your Best Property
The Spanish real estate market has a lot to offer in terms of properties. You can choose from various home types, from new property to properties with a little bit of history behind them. What’s more, the concept of freehold and leasehold does not apply in Spain, meaning everything, including the land where the property stands, automatically becomes yours after completing the purchasing process.
Step 6: Plan Property Visits
Though modern technologies allow potential buyers to view properties virtually, it is advisable to visit the property in person before buying. A local real estate agent can help you with viewings and visits to the neighbourhoods you are interested in.
Step 7: Property Due Diligence Checks
Once you have identified your ideal property, your real estate agent should ensure that everything about the property is correct. This includes ensuring that the building is legally built. It is also important to find out if there are any restrictions to modifications as you may want to remodel or extend your home after buying.
Step 8: Get Financing
If you plan to buy an apartment in Spain through a mortgage, you should be aware that you cannot rely on a non-EU registered mortgage lenders or banks. Residents in Spain can borrow up to 80% of the property’s value, but non-residents are limited to 60-70%. A mortgage in Spain goes up to 30 years with an interest rate of 2.5% or more per annum.
Step 9: Choose a Mortgage Lender
There are numerous mortgage lenders in Spain, each with its lending terms and rates. To ensure value for money, you should get professional help from a local mortgage advisor.
Step 10: Make an Offer
The next step after getting the required financing is to make an offer on the property through the seller’s real-estate agent. The seller may accept or reject the offer.
Step 11: Sign the Preliminary Contract
If the seller accepts your offer, you should proceed to reserve the property. Usually we talk about a 3.000€ deposit. Then both parties agree on the signature of the preliminary contract (Arras). In Spain the amount paid is usually equivalent to 10% of the total value of the property. It is important to know that you will lose the deposit , if you change your mind, but you will get a double refund if the seller cancels the purchase and sell contract.
Step 12: Sign the Sales Contract
Both parties should sign the final agreement in the presence of a notary public. The notary will certify and issue copies of all the necessary documentation. The remaining balance and all taxes due should be paid at that moment. Real-estate fees are paid by the seller and included in the final sales price. You will receive the original copy of the sales deed within two to three months.
How to Buy a Home in Spain Safely: Avoid Scams
If you are planning to buy an apartment in Spain or any other property, you should be aware that there are scammers who pose as sellers to defraud you of your hard-earned money. Some of the common pitfalls when buying property in Spain include purchase tax, deposit, illegally built properties and issues with off-plan properties. There are many stories about people's property purchases gone wrong, some of which involve foreigners.
Therefore, if you don’t fully understand how to buy a home in Spain safely, you should seek advice from local professionals like real-estate agents and independent Spanish lawyers. You should also ensure that you only buy from trusted sites like Equinox. We guarantee our clients a smooth and safe property purchase process, thanks to our years’ experience in the field and the strong network we have created over time.
Below are some ways you can identify some of the property buying pitfalls.
- If the seller places you under pressure to make a “reserve” payment to take the property off the market, they are most likely tricking you to hastily complete the purchase because there is something wrong with the property. You should only pay the deposit after you have physically inspected the property and done property due diligence.
- Another common pitfall of buying a house in Spain is unregistered and illegally built properties. The best way to avoid getting into this trap is by doing a thorough property due diligence before committing any amount of money. Since you may not be aware of the building requirements in Spain, you can hire an independent Spanish lawyer to make the enquiries on your behalf. The lawyer can ensure that everything is rectified before you proceed to the next steps of paying a deposit and signing the preliminary contract.
Other things you should verify before paying a deposit or signing the preliminary sales contract include:
- That the physical state of the property is duly recorded at the land registry.
- That the seller has the proper title and can transfer it to you.
- That the representatives of the seller have powers of attorney to act on his behalf.
- The property has a first occupation Llcence that has not been revoked.
- That the property does not have any limitations, liens or encumbrances.
Where Can I Buy a House in Spain?
The number one challenge when buying a house in Spain is finding the best real estate agent to help you with the process. A good real estate agent should demonstrate an in-depth knowledge of the Spanish real estate market and be ready to help you with the paperwork and the legal parts of the process. They should also help you understand what you can get with your budget and requirements and enable you to find your dream house at the best price.
Equinox has helped numerous expats find their dream home in Spain. We work hard to ensure that our clients feel special, listened to, understood and supported when dealing with their real estate issues. Below are some of the areas where we can help you find and buy house in Spain:
- Barcelona: This Catalonian city can make a good second home or a place to settle if you love living in the heart of the action. There are many beautiful areas to live in, you just have to find the one that best suits your taste and budget. You can choose between the different neighbourhoods after evaluating their characteristics: location (proximity to the centre, to the beach, to your place of work or study...), security, type of neighbours (tourists or locals), price per square metre, etc. At Equinox, we have flats in all areas, and we will advise you on the best option!
At Equinox, we will advise you on how to buy a home in Spain safely and ensure that your house buying process is smooth from start to finish. Visit our website for more information on the processes and to view the flats available for sale in Spain. Now that you know how to buy a flat in Spain, find the best one!