Non-Resident Foreigner: how to buy a property in Spain

Buying a property on the Costa del Sol can be a dream come true for many non-resident foreigners in Spain. However, the process of processing taxes can be very complex and confusing, especially if you have no prior experience with these types of transactions.

Firstly, it is important to note that the taxes to be paid will depend on the type of property purchased. For example, if you buy a new home, you must pay the Value Added Tax (VAT) of 10%. On the other hand, if you buy a second-hand property, you will have to pay the Property Transfer Tax (ITP), which varies depending on the price at which the sale is made, from 8% to 10%.

In addition, there are other expenses associated with buying a home, such as the Documented Legal Acts Tax, lawyer and notary fees, and registration fees. It is essential to note that these costs may vary depending on the region where the property is located.

Another important factor to consider is that, as a non-resident foreigner in Spain, it is necessary to obtain a Foreigner Identification Number (NIE) to carry out the purchase of the property. The process of obtaining an NIE may take time and can be complicated for those who do not speak Spanish. After Brexit, if you are a citizen of the United Kingdom, you will need a TIE (Foreigner Identification Card), which is equivalent to the NIE, and the same process is required to obtain it.

It is recommended to have a Spanish bank account when buying a property in Spain, as it will facilitate the regular payment of taxes and public utility bills. If you have a mortgage from a local bank, the payments will be made more easily. In addition, in the case of a real estate investment in a housing estate, community expenses will be recurring payments.

Finally, it is important to note that non-resident foreigners must file an annual tax return in Spain for any income earned in the country, including the rent from their property. This process can also be confusing and complex for those who are not familiar with Spanish tax laws.

In conclusion, the process of processing taxes when buying a property on the Costa del Sol for a non-resident foreigner can be complex and overwhelming. It is recommended to have the help of a real estate lawyer specializing in Spanish tax law to ensure that the entire process is carried out correctly.

If you are looking to buy a property on the Costa del Sol and need help with the tax process, we invite you to contact Valido Home. We have a team of lawyers specialized in Spanish taxes who can help you at every step of the buying process. Contact us now without compromise!