HOW TO BUY : A VALENCIA / SPANISH PROPERTY AS A FOREIGNER

When we talk about buying a house in Valencia, or Spain in general, whether buying a house in the capital city Madrid or anywhere on the Costa the British are the most significant foreign buyers of homes on Spanish soil. The Brits are followed by the French, Germans, Russians, and Italians, not forgetting the increase of Chinese citizens arriving in the country. Whether you want a property in the popular coastal areas such as the Costa Blanca or Costa del Sol, or want to enjoy the diversity of the big cities (Barcelona, Madrid, Tarragona, Valencia, etc.), the steps to take are not always clear or intuitive. Also, you must be certain what taxes and expenses purchasing a property entail. In this article, we take a look at the steps and expenses involved.

What taxes and additional costs do you have to pay when buying a home in Spain?

The only indispensable requirement to buy a home in Spain is to get the NIE (Foreigner Identification Number), which is to be replaced with a TIE (tarjeta de identidad de extranjero) due to Brexit. The TIE will display your NIE, a personal and unique number, which is essential to carry out any transaction in Spain, from opening a business to buying a property, or even a car.

It is not compulsory to open a bank account in Spain to buy a property but having a Spanish bank account will facilitate the payment of taxes and expenses.

The purchase of the house is made before a Notary and is registered in a public register.

It should be noted that prior to completing the purchase before the notary it is very common to make a private sales commitment contract that is called “el contracto de arras”, where a part of the total purchase price is already paid.

What taxes and expenses will you have to pay when buying a home in Spain?

The purchase of a home is subject to several taxes, which can substantially increase the house price. Among them are:

  • Value Added Tax (VAT), in the case of new homes or first transmission. 10% levy rate.
  • The Property Transfer Tax (ITP), in the case of second-hand residences or resales. The tax payable is between 6 and 10% of the price, depending on the Autonomous Community where the home is located. It must be paid if VAT is not applied to the transfer.
  • Tax on Documented Legal Acts. This tax must be paid if the house is purchased and VAT is applied and if purchased with a mortgage.

In addition, there are other expenses to consider:

  • Public writing of the notary.
  • Inscription of the deed in the Property Registry.
  • In the case it is necessary to ask for a mortgage, you must include the appraisal and notary fees, mortgage taxes, and the deed’s registration in the Property Registry.

Other taxes will also have to be paid during the year, such as the Real Estate Tax (IBI), the Estate Tax where applicable, the Income Tax of Natural Persons (IRPF). If you do not reside in Spanish territory for more than 183 days a year, you will have to pay the Income Tax of Non-Residents.

Tips for buying a home in Spain

To the extent that is possible, we recommend that you:

Visit the house personally before signing or paying, that is, check first-hand the condition of the property, the surrounding area, the transport routes that connect to the town centre, etc.

Determine who owns the house. To get this information, you will need to go to the Property Registry and check the home’s legal and urban situation. This prevents real estate scams.

Once acquired, register the house in the Property Registry to prove that you have the absolute rights and own the property.

If a prior arras contract is made, hire an expert who verifies the purchase contract’s content and its effects.

To avoid uncertainties, errors, and queues, it is recommended that you delegate all tasks to a professional.

We do sometimes hear of buyers running into problems when purchasing in Spain, but really the process is very straightforward, if somewhat different to the UK. If you consult legal professionals, there is no need to be concerned when it comes to purchasing a new or resale home in Spain. VILLASVALENCIA will assist.

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About Us

Villas Valencia offers properties in Valencia at Spanish prices. What`s more, we don`t charge the buyer (as most other agencies do). We are an English locally run estate agent company dealing with properties in a picturesque area around the city of Valencia.

Testimonials

You are the only agent we dealt with your knowledge of the area and the buying process left us at ease that everything would be taken care of. - Mr & Mrs P, in Naquera

Your advice was clear and brilliant. You completely understood our requirements and objectives, facilitating our new purchase. Thank You! - Mr L, Now living in Lliria

You offered a great service from start to finish, clearly explaining all our options and helping speed everything through. You translated everything we needed quickly.

- Mr T, Second home in Montroy

Villas Valencia was fantastic and exceeded my expectations. I will and have recommended you to others. Thank you for all your referrals for building work. We love our new pool! - Sean, house in Rocafort

Thank you for all the help buying our property in Valencia. With so much to think about, you explained everything well and made it all very easy. Cant wait to move out there fully and enjoy a G & T on our balcony with you.

- Ben, house in Naquera

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