An attractive market
If Spain is a fertile ground for investment, especially from abroad, is due to the collapse of the property market in 2008. In about 10 years, prices have decreased by more than half of their actual value.
For four years now, the prices have been gradually rising again but they still remain below 40% of their initial value. According to Eurostat data, Spanish real estate prices would be reassessed by 4.5% in 2015 compared with the previous year. The opportunity to make a profitable investment is very real, and buyers are well aware of this. According to the Spanish National Statistics Institute, the number of sales increased by 13.9% between July 2014 and July 2015. The notaries say that the number of investors is grown by 52% between 2013 and 2014, with a 10% portion of foreign buyers.
In Spain, the Real Estate prices is not the only benefit in preparation of a purchase. The favorable climate and the cost of living, often lower than in Italy, are two reasons to invest in a property in Spain. The Mediterranean coast, very touristic with Costa Brava, Costa Blanca, the surroundings of Valencia, Torrevieja or Barcelona, suggests a good rental investment, especially with regard to seaside real estate.
The right approach
As with any investment, the approach must be thought, the market must have been studied and it is rather advised to get help from a professional. In addition, you must also have some prerequisites in order to buy a property in Spain.
To claim the property, you need a tax code (NIE). Similarly to the Italian one, the Spanish tax code is necessary for most of the administrative practices. You can get it at the local police station, your lawyer or your real estate agent can also make the request on your behalf. It’s also better to open a non-resident bank account in Spain. Thus, obtaining the money for the deposit or the costs associated to the purchase will be faster.
Before signing the sale agreement, make sure that the property is in accordance with what was announced by the seller. Then, ask to see the property registry to verify whether the seller has paid off his debts. Also, check out the actual soil and constructed surface on the real estate registry; make sure that the co-ownership expenses have been paid and that the property tax has been welded. It is recommended to carry out these operations assisted by a lawyer, a real estate agent or a notary.
Once you have chosen the property, you will sign the agreement and finally the deed of sale (escritura) before the notary. You will be officially the owner once the act of transmission will have been registered in the land register (register de propiedad).
Things to know
Becoming a property owner entails some expenses related to the acquisition process and to the possession of the property.
Notary fees vary around 1-2% of the property price and the agency costs (to be paid by the buyer) generally account for 5-10% of the purchase price. You may also be subject to the transfer tax (6-7% of the property value depending on the region) or value added tax if it is a new construction (7%).
Once the property deed is registered, the property charges will be at your expense. Among those there are the property tax or the local tax, whose rate is set by the municipality, the ongoing expenses and the income tax for non-residents, that is 24,75% calculated on the actual income from the property. In case of resale the capital gain will be taxed at 21%.
Translated by Dafne Inzaina - Meretdemeures.com.