The New Regulation for the Purchase of Housing in Spain by Foreigners

By : Nick Marr

Once the NIE has been requested and obtained, the foreigner not resident in Spain can initiate the purchase. Will it be time to look for the best buying opportunity? Unfortunately, neither those of us who work daily on the street floor can offer the real estate offer. At this moment, the national subjects with notarized solvency abound but without liquidity to confront the best investments, for that reason the foreigners are bursting with that desired liquidity.

The origin of these investors is diverse. Besides Chinese and Russians, especially focused on the Mediterranean coast, there are Latin Americans who see in Spain an extraordinary business opportunity. They protect their purchases in emerging economies but without sufficient confidence and legal security in the medium or long term. Investing in Europe is a guarantee for them.

The acquisition of a home in Spain by a non-resident foreigner is a fairly simple procedure. It is only necessary to have the NIE (Foreigner Identification Number), which is granted (out of office) by the General Directorate of the Police to any foreigner who is initiated an administrative process. This request can be made from outside Spain (through the embassy or consulate) or from inside (Spain), by going to an immigration office or a police station.

Once the NIE has been requested and obtained, the foreigner not resident in Spain can initiate the purchase of the home. It is not mandatory to have a bank account in our country, although it is recommended. All taxes and expenses associated with the purchase of a home (VAT in the case of new homes, ITP in the case of second-hand residences, notary fees, management and registration, as well as the IBI and the garbage tax) must be paid in Spain and the fact of having a bank account facilitates the process.

The expected new regulation of the Law to support entrepreneurs and their internationalization, as regards investment in real estate, presents interesting novelties. Another novelty is the possibility of obtaining residence for the majority partners of foreign companies that do not have their domicile in a tax haven. The investment equal to or greater than 500,000 euros must be free of any burden and lien. Therefore, the purchase of properties in Spain that are financed by a mortgage guarantee is excluded, as long as that financing leaves the first half million euros free of charge. In this case, they can save on makeup.

Interesting question, not excluded but not expressly resolved in the Law, is the accumulation of several investments to reach the minimum of 500,000. Nothing says the Law in this regard, so we must understand that any significant investment of capital, either once or accumulating several in a period that is not determined, will entitle you to obtain a residence permit in Spain. There are always opportunities at every opportunity and it seems that the dream of owning property in Spain is always open. Hopefully this article can add to your insight.