Guide to Buying Property In Spain for Foreigners, a must read from our English Speaking lawyers, Spanish local experts in Property Law.
The process of buying a property in Spain typically creates many questions and concerns for foreign citizens, especially if they are not used to the Spanish system and regulations.
There are many details to be dealt with during the process: not only making sure that the property is free of any mortgages or other charges, but also other details which could be considered minor but may be relevant in the future, such as checking that there are no disputes or judicial or administrative proceedings which could affect the property or its possession.
Tax implications are also to be taken into account when buying a property in Spain – not only regarding the IVA (equivalent to VAT), or ITP (if buying a resale property) – approximately 10% of the value of the property in each case. We should also make sure that local taxes payable each year to the local Council are also up to date, and that there are no pending debts, because this situation could affect the property in the future.
In those specific cases when the seller of the property is also a non-resident, then the buyer is obliged to make certain retentions from the total price, and pay those amounts directly to the Spanish tax authorities on the behalf of the seller, mainly as an advance on the seller’s capital gains. The main retention to be made is equivalent to 3% of the total purchase price.
Buying property in Spain for foreigners, wrapping up
Finally, it is also relevant to confirm that at the time of signing the property deeds there are no debts pending to the Community of Owners: those debts could affect the property too. In order to avoid any issues, it is recommended to obtain a certificate issued by the Community showing that the property is free of any debts; and a copy of this certificate would be attached to the purchase deeds.
An independent English-speaking legal advisor will help you avoid any issues with these issues. With proper assistance, buying property in Spain for foreigners feels like legal-wise local buyer.