Advice On Buying Property In Spain?
- Víctormanuel Paz
Here is our step by step guide to buy a property in Spain hide
- Get your NIE ‘Número de Identificación de Extranjeros’
- Find a lawyer speaking your language and Spanish.
- Open a Bank account.
- Do you need a mortgage?
- Sign the ‘contrato de Reserva’
- Important checks of the property with experts.
- Get your mortgage confirmed.
Is it still a good idea to buy property in Spain?
Spanish Property Market after Brexit – The property market in Spain has fluctuated a lot throughout the past years, however it has been in a recovery phase since its devastating 30% fall between 2008 and 2014. At the moment, buying Spanish property is a good investment.
So, is it wise to buy property in Spain after Brexit? Well, at the beginning of this year 2019, the average property price in Spain has risen up to 6% , making it even a better choice in terms of buying a reselling the property.
Buying a Property in Spain: The Five Steps To Take Before Searching for Spanish Property
At this moment, more into 2019 and going into 2020, the housing market price has relaxed and it has hit a steady point , making it a ‘sustainable’ investment. Having said this, common sense can tell you that house prices in Spain after Brexit will suffer a fluctuation, as big occurrences like this always have an impact on the property market, financial market, currency and more.
Is there property tax in Spain?
Buying property tax: How much is buying property tax in Spain? – Purchasing a property in Spain involves the payment of different taxes, ranging between 8% and 11. 5%, whether the property is newly built, generally sold by banks or construction companies, or the property has already been owned by another person, a resale. .
Do you pay council tax in Spain?
Next steps – For more information about buying property in Spain, please take a look at our pages on Buying property in Spain. If you are considering purchasing a property in Spain it is essential that you seek good quality, independent legal advice at an early stage.
We here at E&G Solicitors in Spain have been advising clients in their Spanish property purchases since 2004. We can guide you through the legal process to ensure that the transaction goes smoothly. If, after purchasing a Spanish property, you need assistance in preparing and submitting your tax returns, we will be happy to assist you through the process.
If you are having difficulties communicating with the utilities services, whether because of language barriers or differences in the business culture, we can be in contact with them for whatever purpose you require. Please do be in contact with us if you would like assistance with any of the issues set out in this article.
Are property prices rising or falling in Spain?
HORDES of foreign buyers helped drive Spanish home sales and house prices up robustly in the first quarter of the year. The Spanish housing market has started the year with strong growth and momentum carried over from last year, with sales up 22% to 174,000 according to data from the Spanish notaries’ association, and house prices up 11%, having ended last year up 38% and 5. Euribor interest rate. Image from The Olive Press. Sales only really fell heavily in March and April of 2020, with the recovery starting as early as May 2020, and sales back in positive territory by July 2020. Since then sales have grown every month except two, and by double digits almost every month since January 2021.
- 3% respectively;
- Looking back, the pandemic-induced slump in home sales didn’t last long, and it seems as if the coronavirus might even have fuelled a property boom as the plague made people rethink their lives, and move home to suit their new priorities;
Put another way, home sales bounced back quickly from the lockdown, and have kept bouncing ever since.
Is there stamp duty on property in Spain?
What is the main cost of purchasing property in Spain? – The main cost of purchasing property in Spain is tax , as is very often the case with any property purchase anywhere in the world. If you purchase a new property in Spain then the greater part of the tax payable will be VAT, whereas if you buy a resale property in Spain you will pay a purchase tax or stamp duty.
- The amount of VAT or stamp duty you will pay will depend upon where in Spain you purchase property;
- So, if you buy a resale flat in Barcelona you will pay 10% purchase tax (called ITP) to the Catalan autonomous government, whereas if you buy a new build in Tenerife you will pay 7% VAT (called IGIC) and 1% stamp duty (called AJD);
Buying off plan on the Costa Brava attracts VAT (IVA) of 10% and stamp duty (AJD) of 1. 5%, whereas buying resale at La Manga Club will cost you 8% purchase tax (ITP). Arguably, the basis on which the purchase tax is calculated ought to be the purchase price of the property.
The unorthodox commercial practises of the pre-recession era (encouraged in no small part by the banks), as well as the reduction in value of Spanish property prices since 2008, coupled with the artificial increase in the value of properties for taxation purposes (qua rateable values) across Spain, has resulted in the tax agencies of the governments of the 17 autonomous communities in Spain requiring that whatever the real purchase price of a property, purchase tax or stamp duty must be based on the lowest value of the property for taxation purposes (or lowest official value) as set by that tax agency.
This, to many, will sound not dissimilar to the modi operandi of such organisations as the Cosa Nostra. Of course, you would not be far wrong. It is a method of extorting from property purchasers higher amounts of tax that would not be payable if the true purchase price were to be used a basis for the calculation of tax.
This practice of the autonomous governments has been challenged in the Spanish courts and such challenges have met with some success. However, it is still highly advisable to base one’s purchase tax or stamp duty payment on the lowest official value.
If not, the risk is that the “true” purchase value will be reassessed and you will have a battle to avoid paying an increased amount of tax based on a value considerably higher than the lowest official value. Your independent legal adviser will be able to calculate the amount of tax to be paid long before you commit to the purchase, so that you should know how much tax you will have to pay before proceeding.