REAL ESTATE in Spain
Spain turns again into the perfect place for UK residents to get a second property
Once again, Spain has become in the perfect place for UK investors to get a property.
After the economic recession, many real estate companies have gone into bankrupt, generating a huge decrease in property price. Other have resisted the bad time, but updating prices to the new economic situation.
Elryans has been contacted by some of them, requesting information about UK citizens interested in getting a property in Spain or not. If you are one of them and fancy to have any contact, let us know and we put in contact with some of them, but previously we would like to inform you about the requirements that EU and not EU citizens have to comply with in order to get a property in Spain.
Let’s have a look, then.
The first requirement a non Spanish citizen needs to buy a property in Spanish land is a document called NIE (Numero Identificacion Extranjero). It’s like a legal Identity for people that is being born abroad Spain.
Once, that document is got, the second requirement is to get a Spanish Bank Account so that all taxes and legal fees could be paid in and off within the Spanish legal system.
Those two previous points are basically the key points to get any financial or economic operation within Spanish territory, being or not an European citizen.
Obviously, getting a property in Spain also requires some expenses due to the operation (solicitors, due diligences, expenses from Public documents, local taxes, fee to get the NIE, fees to advisors, cost for all the documents require for the operations, etc, so the best way is to operate through a professional and chartered company that will leave all things ready for you to operate). We will write detail of the on point 3.
- How to get the NIE?
- Applying for an appointment at the local police station
- The client must be “in situ” to get the NIE or to sign an official document allowing someone to represent him to get the NIE
- Original Passport with a copy.
- Updated personal picture
- How to get a bank account open?
It normally depends on the bank branch where the customer wishes to open it. (Some banks are even asking for a copy of the person’s payroll). For non EU citizens, it’s a little bit more complex and we really recommend people to hire professional advice
- Detailed Expenses when a client buys a house in Spain.
- Notary Fee
- Land Register Fee
- Documented Legal Act Tax/Property Transfer Tax
- Tax of Increase in Value. (Town-hall Tax, normally to be paid by the seller).
- Community Costs.
- Obtaining the Identification Number, or Tax Number for foreigners.
- Professional Legal adviser’s company , i.e. Afissa’s fee.
In order to issue the title deeds at the notary, the following documents are needed:
- Title deeds which proof the ownership of the property being sold by the seller, the description of the property contained in the title deeds must correspond with that of the object being sold to the client (size of the plot, constructed area).
- Personal data of the buyer, in case of married couples, original and photocopy of the identity cards and indication of the marital property regime (community of goods or separation of property). In case of separate property marital regimen, owners must present the Marriage Settlement from the Registry Office. Non residents need a NIE number together with the original and a copy of the passport/identity card.
- If the buyer is a corporate body, presentation of the foundation charter and a power of attorney of the person representing the company.
- Land register reference, appears on council tax bills.
- Data of the registration at the property register, property number for the notary to be able to request a copy of the property register. When signing the title deeds, the notary checks that the property is unencumbered.
- Two plans must be enclosed with the title deeds: a floor plan and a site plan.
- If the property to be transferred is part of a community, a certificate showing that all payments are up to date must be presented.
The calculation of the cost for the title deeds is based on:
- Required sheets
- Copies of title deeds, minimum one certified and one simple copy.
- Duty or fee
- Documents to be enclosed with the title deeds.
Before inscribing the deed in the Land Register, the tax must be paid in the bank and presented to the Tax Office within 30 days after signing the Deed at the notary’s office. In order to inscribe the Deed, it is necessary to provide the Land Register with the first Authorized copy of the Deed a simple copy of the deed (not witnessed) and also the tax that has been previously paid off and stamped by the Tax Office.
When buying from a private individual the purchased is taxed 10% of the value stated in the Deed. This taxed is called property transfer tax.
If we are not dealing with a private individual, there is 1.5% tax for Documented Legal Acts.
When the selling part is non resident, the buyer is obliged, within 30 days, to withhold 3% of the price and to deposit the money into the tax office (form 211). Subsequently, the seller must present the finance balance to the Tax Office, or, in case of devolution, form 210.
Tax of Increase in Value (Plusvalia)
This Tax is to be paid to the Town Hall (in Denia to SUMA). A copy of the deed along with the corresponding form must be presented at the town hall for its calculation. The tax is based on the land value (the “catastral” value as seen on the local property tax bills) and the number of years between the last property transfer and the present one. What is taxed is the land, not the house. The selling part is the chargeable or taxable person for this tax.
If the house is a part of community of owners, a certificate from the community of owners administrator stating that all payments to the community are up to date is required.
Local Property Tax and Refuse Tax
These taxes are being paid once a year. It’s necessary to ask for a copy of the last paid receipts of the Local Property Tax and Refuse Tax.
The houses of new construction require a “certificate of habitability” and also the registration of the house in the Cadastre, (real property assessment). When the sale of the property is between private individuals, it’s necessary to change the owner’s name in the Cadastre.
Identification Number for Foreigners (N.I.E)
The NIE is a compulsory requirement for non residents with a property or a bank account in Spain. Non-residents must apply personally for the Identification number at a Police Station. The original and copy of the passport/identity card and a photo must be presented and a fee of approximately 10 euro is to be paid. The identification Number for Foreigners can also be applied for at a Spanish consulate in the country of origin.
Professional Legal advise as the one recommended by us (Afissa)’s fee for preparing and inscribing a purchase deed ascend to 500 euro (VAT not included). If AFISSA also takes care of the non-resident tax (forms 211 and 210), the total amount will be 650 euro (VAT not included).
It is necessary to check if the electricity and water payments of the house are up to date. (with copies of the last paid receipts) and to make sure that there is no inconvenience in changing the name from owner to the new one. Signed standing orders will be needed to arrange the direct debit payments.
When signing the contract for electricity and water for the first time, the certificate of Habitability is required. To obtain this certificate, an authorized professional must report that the house meet the established rules concerning the house installations (plumbing, electrical installation, etc…).
Hiring a telephone line, broadband, etc, AFISSA’S fee is between 45 euro and 90 euro (VAT not included).
Proposal for an insurance covering the building, contents and liability of your property are also made.
In terms of figures, let’s see an approximately breakdown for a Deed with a value of 211.000euros:
- Notary 600 euro
- Register 400 euro
- Property Transfer Tax 21.100 euro
- Tax of increase in Value ???
- Community Cost ???
- Local Property Tax/Refuse Tax ???
- AFISSA’s fees 786.50
Total Aprox (VAT included) 22886.50 euro