Buying or Selling Property in Spain: What You Need to Know
Spain has long been a top destination for property buyers and investors, offering a mix of sunny climates, stunning coastal views, and vibrant cultural experiences. Whether you’re considering buying a dream home in Spain or selling your current property, understanding the real estate market and legal requirements is crucial. This guide provides essential insights to help you navigate the process smoothly.
Buying Property in Spain: Key Considerations
- Understanding the Spanish Property Market
The Spanish real estate market varies by region. While coastal areas like Canary Island, Costa del Sol and Costa Blanca are popular among international buyers, cities such as Madrid and Barcelona attract investors looking for long-term growth. Researching local market trends can help you determine the best locations for your investment.
- Legal Aspects and Documentation
Buying property in Canary Islands involves several legal steps:
- NIE Number: A foreigner’s identification number is required for property transactions.
- Deposit Agreement (Contrato de Arras): This preliminary contract ensures the buyer’s commitment and typically requires a 10% deposit.
- Title Deed (Escritura de Compraventa): The final contract, signed before a notary, legally transfers ownership.
- Land Registry (Registro de la Propiedad): After purchase, registering your property confirms your legal rights.
- Financing and Additional Costs
If you require a mortgage, Spanish banks offer financing options to non-residents, typically covering 60-70% of the property’s value. Buyers should also budget for additional costs, including:
- Taxes: VAT (7% for new properties), Stamp Duty and Property Transfer Tax (6,5% for resale properties).
- Legal Fees: Lawyer and notary fees can range from 1% to 2% of the purchase price.
- Ongoing Expenses: Annual property tax (IBI), community fees, and maintenance costs.
Selling Property in Spain: Important Steps
- Preparing Your Property for Sale
To attract buyers and maximize value, consider making small improvements, staging the home, and obtaining an Energy Performance Certificate (EPC), which is legally required before selling.
- Setting the Right Price
A professional valuation or real estate agent can help determine a competitive price based on market trends and comparable properties in your area.
- Legal and Tax Considerations
When selling property in Spain, be aware of:
- Capital Gains Tax: Non-residents pay 19% tax on profits, while residents pay a progressive rate.
- Plusvalía Tax: A municipal tax based on the increase in land value since the last sale.
- Retentions for Non-Residents: A 3% withholding tax applies to non-residents to cover potential tax liabilities.
Why Work with a Real Estate Professional?
Navigating Spanish real estate laws and market conditions can be challenging. Working with an experienced agency like Fernández & Wenzel ensures you receive expert guidance, legal support, and a smooth transaction process. Whether buying or selling, having a knowledgeable partner can save time, reduce risks, and help you achieve the best outcome.
