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Do I need a Spain residence permit to buy a house?

March 26, 2019

After Spain transitioned to the euro, housing prices soared by up to 44% but fell by a third when the bubble burst. Like this article published recently by The Corner suggests, top cities in Spain show signs of a housing recovery. The market is in an expansion phase and it could a good time to invest in property in Spain, whether you’re looking to buy a vacation home or planning a permanent move. This buoyant activity may have sparked your interest, but you might be wondering if it is necessary to apply for a Spain residence permit to buy a house.

Spain residence permit to buy a house

Recent information, provided by the Spanish Ministry of Development, shows that over 135,000 houses in Spain were sold between January and March of last year and nearly 23,000 were bought by expats living in the country. That said, it is not necessary to obtain a Spain residence permit to buy a house in the country. In fact, Spain encourages foreign investors to take a slice of the property market. This does not necessarily entitle you to residency in the country, though. However, what you’ll also be excited to learn is that since 2015, Spain has been offering a “golden visa” for prospective owners who invest more than 500,000 euros in property. This means you’ll automatically be eligible for residency (note: this is not a work permit).

Due to the amount of foreigners buying properties in Spain, the Land and Mercantile Registrars Association has published an informative dossier to avoid having the process become a nightmare. If you would like to read the full report, you can access it via their website. We read it and did our homework. So for those who want to get a rough idea of what buying a house in Spain entails, here are the basics.

the residence permit to buy a house in spain

Before buying a house in Spain

Make sure you take your time to research where and what type of property best suits your needs. Visit the property and evaluate the general conditions. Make sure you spend time in the neighborhood (who are your neighbors, levels of noise, road access, parking, public transportation, services, groceries, etc.)

Compare different possibilities and analyze your favorites in detail, making sure it has all the necessary and legal paper work in order. This includes:

  • Verifying current lawyers or estate agents' credentials, attached to the sale.
  • Land registry (Registro de la Propriedad).
  • Making sure it has the appropriate planning permission and there are no outstanding debts.
  • Verifying that the property is as described and structurally sound. You’ll need an architect or surveyor to do this.

All the above can be provided by the land registry and can be requested by email, phone or in person. Visit the website (Spanish only).

If the property you´re interested in is not yet built, do not pay anything up front without verifying that it has all the necessary permits and authorizations to build. Also make sure the project has its municipal licenses approved. We recommend hiring a lawyer to help you analyze the contract and avoid abusive clauses.

Real estate agents offer their services to the property owners so their commission must be paid by the current owner, not you. Agents also offer services such as managing the mortgage concession or formalizing the sale at a specific notary but, be aware - as a buyer, you are not obligated to accept these services. Always remember that you can choose your own notary, lawyer and mortgage provider.

The actual buying process

Once you've arranged your mortgage with your provider, you must make an offer to the owner and if accepted, you then sign a contrato privado de compraventa (preliminary contract) and pay a deposit - usually 10% of the purchase price- or an escritura de compraventa (sale contract, usually signed in front of a notary) when the full sale price, taxes and other extra costs are due.

Costs of being an owner

Once you purchase your home, you will be responsible for registering the property and paying the legal fees and taxes, which include a property transfer tax (usually 5 to 10% percent on existing properties) and the IVA (or VAT), which is 10% on new properties. Apart from these costs, there are annual taxes (IBI, property ownership tax) you will have to pay regardless if you live full time in Spain or rent out your new home.

We hope this information has been useful! Remember, if you need home insurance please visit the Caser website to discover the best coverage adapted to your needs. If you want to check out the types of home insurance available in Spain, discover our free guide below: 

Download Free Guide:  How to choose the right home insurance in Spain

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