British, Russians, French, Norwegians, Belgians Germans and Italians are currently showing more interest in buying a house in Spain, especially in coastal areas, as well as Chinese citizens, although they prefer to buy flats in large cities such as Barcelona and Madrid.
What are the procedures to buy a house in Spain?
Any foreigner can buy a flat in Spain. You must haveForeigner Identification Number (NIE) which can be personally obtained or by an authorized representative (a lawyer, for example) in the immigration offices of Spain or from abroad through the Spanish Consulate, proving the reason for requesting the NIE.
Once requested and obtained the NIE can begin the purchase procedures. It is not mandatory to hold a bank account in Spain although it is highly recommended for the payment of the price of the house, the expenses of formalization of the purchase, the taxes and the expenses of maintenance of the house, having a bank account facilitates the process.
A non-resident foreigner who buys a flat in Spain, what taxes does he pay in Spain?
Buyer must pay all taxes (and expenses) arising from the purchase of the house, which are VAT (Value Added Tax) if new housing and amounting 10% of the purchase price or Property Transfer Tax (ITP) in case of successive transmissions (second hand) and varies in each Community, in the case of Cataluña amounts 10% of the purchase price.
Other taxes to be paid are the Property Tax (IBI), local tax on annual basis, fixed by each municipality, or the rate of garbage collection.
The Income Tax for Non Resident is a state tax levied on income earned in Spanish territory by individuals not resident in Spain regularly. It is considered that a person has its habitual residence in Spain for fiscal purposes when he remains in Spanish territory more than 183 days a year. As for the amount to pay for this concept, if the property is empty and at the disposal of its owner should be calculated on the cadastral value of the property. If the flat has been rented, 24% of the annual rent will be paid.
What is “empadronamiento” registration?
The registration in the municipality is not the same as the residence permit. The municipality register (padrón) depends on the City Council and it must register all people living in the municipality whether they are national or foreign. The registration does not entitle itself to obtain a residence or work permit in Spain.
Finally note that the Spanish banks can offer finance (mortgages) to foreign buyers, without legal limitations.