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Buying a property in Spain.
To purchase a property in Spain, the following documents are required:
- A valid passport;
- Personal Identification Number of a foreigner - NIE. 2 to3 weeks are required to obtain a NIE in Spain.
If you want to buy with a mortgage, in addition to the above documents, the bank will also require to provide (with Spanish translations):
- Personal Income Tax Form;
- A letter about your employment stating your current income;
- If you own a property - a copy of property title. If you have any additional rental income - rental contracts showing earned income;
- Bank documents showing state of your savings or deposit accounts.
Please note that when you purchase with a mortgage, you must open an account in the bank which provides the loan.
For the property selected for acquisition it is necessary to check the following documents:
- Escritura (Escritura publica de compraventa) with a registration mark of the state register of ownership;
- Nota Simple - an extract from the state property register, confirming that at the moment, this property is not incorporated and is not under arrest;
- Receipt of payment of the annual municipal property tax (IBI), which also indicates registration number of the property and its cadastral value;
- When buying a property from a developer (primary market), development documentation for the new construction (Declaracion de obra nueva), whether the object is registered with the tax authorities, as well as the registration of the plans of building with local municipality must be checked.
When buying property in Spain one should pay a tax the amount of which depends on the property type:
- 10% IVA (Impuesto sobre el Valor Anadido) - Value Added Tax if a new property from a builder is purchased (after 31 December 2012), or
- 8% ITP (Impuesto de Transmisiones Patrimoniales) - a tax on the transfer of ownership if buying property on the secondary market.
It should be noted that the costs of notary, legal and banking services on a mortgage, the cost of outsourcing, registration in the register of real estate, valuation and insurance are 1.5-2% with no mortgage and 3.5-4% with a mortgage loan.
