How to buy a house in Spain being a foreigner

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Spain is a country with an excellent climate and gastronomy, which has spectacular areas, both on the beach and in the mountains. This means that many foreigners want to move here or buy a holiday home and the number of people doing so is growing up every year.

 

The price per square meter can vary a lot depending on the area of Spain where you want to buy your house. Below you can see the prices in some of the most popular cities, the steps you must follow to formalise the purchase, a list of real estate agencies in Spain and the administrative and other related costs derived from the operation.

 

Price of housing in Spain

The average price of housing in Spain is very different, I would recommend to check the actual pricing at the moment when you read this post.

 

If you don't want to invest a lot of money, you must stay away from the big capitals such as Madrid and Barcelona and the most touristic areas. The cheapest cities in Spain to buy housing are usually located in areas of the interior. Three examples with the lowest prices per square meter in the country are Albox, Calasparra and Benavente, all of them around €550/m2.

 

How to make the payment in Euros to buy a house in Spain

Payments for both the property you buy and administrative expenses must normally be paid in Euros in order to buy a house in Spain. Check out our list of the best banks for opening bank account in Spain and transfer money from outside of Spain. I also would recommend to read through the requirements for opening the bank account in Spain.

 

In addition, in the event that you consider paying for the property in cash, Law 7/2012 of October 29 limits the amounts that can be paid in cash when making transactions in Spain. For anyone who is not a tax resident, this is set at €2,500. So you will have to pay for the house by making an international bank transfer if your money comes from abroad.

 

If you try to make an international transfer directly from a foreign bank, this would mean very high currency exchange fees that you can avoid with Wise.

 

Traditional banks add an extra cost to the real exchange rate between currencies, which can make you lose a lot of money when it comes to a high disbursement, such as the case with the purchase of a home.

 

One way to save a lot of money when paying for your home in Spain from abroad is to transfer the money from your bank account using Wise for currency conversion, since they have very low costs and always use the real exchange rate of the market (the one you can check yourself on Google).

 

Real estate in Spain

A good way to start looking for a home in Spain is by consulting what real estate companies offer on their websites. Here are four of the best-known, located in different parts of the country. 

 

Buying a house in Spain through a real estate agency is a simple and safe way to do it, but it is not the only one. There are portals specialised in the real estate sector where there are individuals who put their properties for sale and where you can see their ads and contact them directly.

 

Requirements to buy a house in Spain as a foreigner

Spain does not impose restrictions on foreigners when acquiring homes or land, regardless of whether they come from countries in the EU or outside the EU.

The only requirement to buy a house in Spain that you must comply with is to request a NIE (Foreigner Identity Number), which will serve to identify you when making the purchase and sale contract and to pay the corresponding taxes. You can apply for the NIE at a police station in Spain or at the Spanish embassy in your country, by submitting the EX-15 form.

 

Steps to buy a home in Spain

Once you have found a property that fits what you are looking for, it is convenient for you to go and see it in person. Remember that you must obtain the NIE to formalise the purchase and sale documents and follow the following steps:

 

Negotiate the price with the seller

Verify that the property belongs to the seller and that it is free of administrative charges or mortgages. You can do it by requesting a report from the Land Registry.

 

In some cases, you can sign a deposit contract and pay a percentage of the final price as a deposit. This document is an agreement by which both parties undertake to finalise the purchase and sale in the near future. The usual price of the deposit is 10% of the price of the house / apartment excluding any kind of fees and taxes applied.

 

What are the additional costs for the purchase?

When you buy a house in Spain, you will have to pay up to 12% of its value as additional costs for the purchase.

Here is a detailed list of the expenses you will have to face:

Property Transfer Tax (ITP): from 6 to 10%, it depends on each Autonomous Community. It is only paid when you buy a second-hand home.

Value Added Tax (VAT): 10% of the value of the property. It only applies if you buy a new house.

Documented Legal Acts Tax (IAJD): between 0.5 and 1.5%

Costs of notary: 0.03 to 0.45%

Registration rates: 0.02 to 0.18%

 

For more details, please check out our article about the expenses for buying a property in Spain as well as A step-by-step guide on buying real estate in Spain.

 

Here you can find more articles and posts related to Buying Real Estate in Spain and here more about Banks and Money in Spain