Buyers Guide
We will guide you through your buying process. It is not difficult, but like whenever you are doing anything out of the country where you are used to the Law, things can become intimidating as they are different as well as the language. This is where we can help a we speak the language.
First steps:
- Make sure you have your finances in order and know how much you can spend.
- Take into consideration that you must add 13% which is Purchase Tax or IVA on declared amount and Legal Costs.
- A €3.000, -- deposit has to be paid at the time of signing the contract at the Solicitors office.
- Arranging for NIE (foreigner’s national insurance number which is obligatory when purchasing in Spain)
- Arranging for a Spanish Bank account.
- If buying a resale, it takes 4 to 5 weeks from signing the contract until the date of the signing. If that gets delayed, an extra 10% will be required prior to the signing.
- We can arrange for an independent Solicitor for you, or you can choose one of your own.
Once the purchase is done we will assist you with anything you need help with, whether it be for furniture, white goods or anything else.
- Costs of owning property in Spain
There will of course be costs associated with owning a property in Spain. Some of these will be maintenance costs, such as cleaning, repairing, reforming, utility bills, rubbish collection, and so on. These will be determined by the size and type of the property you buy. Obviously, a large villa with a garden and pool will require much more effort and cost to maintain than a small apartment. For cleaning a figure of 10€ an hour is typical throughout Spain. Apart from the general maintenance costs referred to above, there are many costs in the form of taxes and fees that property owners in Spain face.
- Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI)
A local tax on the ownership of property in Spain, irrespective of whether the owner is a resident or not. Based on the Valor Catastral (an administrative value that is usually lower than the market value, sometimes considerably so) set by the town hall the tax rate goes from 0.4% – 1.1% of the Valor Catastral depending on the Spanish region.
- Annual Wealth Tax (Impuesto Sobre Patrimonio)
This tax has been changed several times in recent years.
- Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR)
Non-residents who own property in Spain must pay an annual income tax that varies according to whether the property is rented out or not. This tax is to be paid by the 31st December of each year.
- Not rented out
Non-resident property owners who do not rent out their property and who do not have any other source of income in Spain pay income tax based on the value of their property. The tax rate is fixed as 25% of 2% of the Valor Catastral of the property.
- Rented out
If non-residents rent out their property and receive an income in exchange, they are obliged by law to declare this income and pay taxes on it. The taxable base and the tax rate will be determined by the laws as they apply to each person’s circumstances (taking into account the double taxation treaty – if any – between Spain and the country of origin of the non-resident). In many cases non-residents simply pay a flat rate of 25% of the gross income they earn from their property in Spain. Residents in Spain will have to pay the income tax based on their income earned during the year. The tax rate depends on the level of income. To be paid by 30th June each year.
- Community Fees
Owners of property that is part of any development, building, or complex in which common zones are shared with other owners are by law obliged to be members of the community of owners, known as the Comunidad de Propietarios. This will entail paying community fees for the upkeep of the communal areas, and any other services that the community vote for. The fees will vary according to the magnitude of the communal areas, the costs of maintaining them, and the services that the community vote for. A budget for annual community expenses is approved by majority vote of all owners (or representatives) who are present at the annual general meeting of the Comunidad de Propietarios.
- Insurance
Household insurance will vary according to the circumstances of the owner and the type of property and its contents.