Buying Property in Spain: A Complete Guide for Foreign Investors

What do you think when you hear of Spain? A perfect tourist destination! Indeed, it is, but only a few of us know that Spain is also among the best countries in the world to invest in real estate. Whether you're looking for a holiday home, an investment for rental income, or a residential property, Spain boasts a robust property market that offers long-term value.

Its luxurious lifestyle, Mediterranean climate, and highly developed economic growth attract investors from around the world. At DarGlobal, we enhance the charm of the real estate market in Spain with our luxurious properties, such as Marea by Missoni and Tierra Viva, Design inspired by Automobili Lamborghini. In this blog, we will explore everything about buying property in Spain, from the process to legal and financial tips.

Key Takeaways

• Spain offers strong investment potential through property value appreciation, rental income, and an extremely high quality of life.
• The stages in the property buying process in Spain range from securing the financing to the signing of the contract at the notary.
• The clients should include 10–15% extra in taxes and fees while calculating the total expense of home ownership.
• Selling a Spanish property incurs taxes to be paid, legal costs, and agent commission, with special provision for foreigners.
• Spain's Golden Visa offers investors the chance to gain residency through an investment of €500,000 or more in eligible property.
• Legal and financial planning is crucial, and consultation with salespeople and lawyers at the initial stage guarantees a hassle-free and safe transaction.

Why Consider Buying Property in Spain?

Spain has attracted foreign investors due to its luxurious real estate and consistent growth. Property prices in prime locations like Madrid and Barcelona have consistently gone up in the past twenty years. Apart from growth in cities, smaller towns and coastal areas offer good returns.

The nation boasts a robust economy within the EU and continues to attract foreigners and tourists. This provides it with a robust rental market for both short-term holiday homes and long-term rental residences. 

The weather, medical care, and laid-back lifestyle of Spain add to its attraction, especially among retirees and families who want balance. DarGlobal understands these drivers and is providing high-end real estate properties specifically tailored for international investors. 

For example, Marea by Missoni, offers premium luxury living and modern architecture. This residential complex delivers beautiful architecture, and offers Golden Visa status, both in a single package.

Process of Buying a House in Spain: Step-By-Step

Purchasing property in Spain is a meticulous process and requires you to be very careful about each step:

• Step 1: The process starts with financial planning. Determining your budget, obtaining pre-approval mortgage quotes, and opening an international Euro account or a Spanish one. 
• Step 2: In this step, you should focus on obtaining the NIE (Número de Identificación de Extranjeros), the foreigner's tax identification number.
• Step 3: The next step is to begin searching for the property. Investors can look for high-end properties.
• Step 4: Once you've chosen a property, you then have to verify the Nota, which is a legal document that verifies ownership and that there is no debt on the property.
• Step 5: Prior to presenting an offer, a building survey is suggested to determine any structural or legal issues. 
• Step 6: In the last step, engage a solicitor to ensure good contracts and negotiations. After closing on the offer, sign the contrato privado de compraventa (private agreement), and then the escritura de compraventa (official deed of sale) before a notary.

Cost of Buying Property in Spain: What to Expect?

Spanish property remains competitively priced with the rest of Europe. Apartment prices in the capital cities of Madrid and Barcelona range from €4,000–€6,000 per square meter, with the price dropping significantly for suburban locations. 

Besides the price of the property, the buyer must also plan for legal costs and taxes. The major expenses are transfer tax (6–10%), notary fees (0.5–1%), legal fees (1–2%), and land registry fees (about 1%). All the expenses differ based on the area and the type of property.

DarGlobal's branded addresses are located within areas that offer luxurious living and properties such as Marea by Missoni are designed to attract top-end investors who seek not only an enhancement of lifestyle but also healthy appreciation of capital.

Selling a Property in Spain: Costs and Rules

While selling the property in Spain, the owners must factor in the commissions of estate agents (3–6%), legal costs (around 1%), and other taxes. Capital Gains Tax is between 19% and 23%, depending on the profit made. If the seller is a non-resident, an extra 3% income tax provision is retained by the buyer. They also have additional costs, including the purchase of an Energy Performance Certificate and the Plusvalía tax levied on the increase in land value. 

Spain Property Investment Visa: Who Qualifies and How to Apply?

Spain's Golden Visa is perhaps the largest draw for overseas investors. By investing a minimum of €500,000 in property, investors are able to gain residency. To be eligible for Spain’s Golden Visa, an individual should have no criminal record, possess valid health cover, and proof of having sufficient means to sustain themselves without having to work in Spain.

Investors will make their investment, file documents via a Spanish consulate or in Spain, and wait for approval, usually 10 days. The initial visa is one year, followed by a two-year residency permit, which can be renewed as long as the investment continues.

Legal and Financial Tips for Foreign Buyers

Foreign investors can approach the property buying process by looking for mortgage lenders and asking if and how loans are available. It is also advisable to have a legal representative early on to deal with documents, obtain your NIE, and deal with contracts. Investors who are unable to come to Spain for all the procedures can give a Power of Attorney, which will enable legal representatives to finalize the sale on their behalf.

Conclusion

Spain offers a very attractive combination of value, lifestyle, and investment and is therefore a favorite among overseas property investors. With economic stability, rental return, and the bonus of the Golden Visa, it's a perfect destination for foreign investors.

DarGlobal capitalizes on this opportunity even more by providing branded residences of the finest design and comfort standards. For each investor seeking to access Spain's growing real estate market, DarGlobal is the perfect partner to pioneer the journey from initial discovery to ownership and beyond.

FAQs

What should I know about buying property in Spain?

As a foreigner buying a property in Spain, you will need an NIE (tax code), a Spanish bank account, and legal representation. Knowledge of local law, costs, and using a solicitor ensures a hassle-free, safe, and compliant purchase.

What is the cost of buying property in Spain?

Apart from the cost of property, an additional 10–15% in taxes and fees has to be paid. This comprises transfer tax, notary fee, legal service, and land registry fee. Prices also differ by region and type of property, so precise budgeting has to be carried out.

How much does selling a property in Spain cost?

Selling a property includes real estate agent commissions (3–6%), capital gains tax (19–23%), plusvalía tax, legal costs, and a 3% withholding for non-residents. It is advisable to include all costs up front to assist with improved budgeting and returns.

What is the process of buying a house in Spain?

Start by managing finances and obtaining an NIE. Then, look for a property, inspect documents, engage a solicitor, sign an initial contract, and complete it at the notary. All of these must comply with Spanish law to be financially and legally secure. 

How does the Spain property investment visa work?

Invest at least €500,000 in real estate to qualify for property investment. Undergo legal, health, and financial screening, and make an application at a consulate or in Spain. You will be issued a renewable residence visa with the right to travel within the Schengen region on approval.