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21.03.2013

Buy real estate in Spain

Capital flows.

It is not necessary to get a prior approval for international transactions, but you have to take into account that in certain circumstances you have to make a declaration:

  • For amounts of 10.000€ or more (in cash or cashier´s checks) entering or leaving the territory of Spain.
  • For transactions exceeding 100.000€ within the territory of Spain.
  • Incoming and outgoing payments exceeding 50.000€ effectuated by bank transfer.

When one of the parties is an entrepreneur It´s prohibited to make payments in cash exceeding 2.500€ for residents, if the payment is made by a non-resident the amount will be increased to 15.000€.

Foreigner Identification Number (N.I.E.).

Obtaining a Foreigner Identification Number is the first step in the process of buying a property in Spain.

A NIE may be applied for beforehand in the consulate or embassy of Spain in the country of origin.

For requesting a N.I.E. in the country of origin you will need to complete an application form, indicating the reasons for the application and to submit it with your passport and a photocopy of it.

If you choose not to request it in your country of origin, you can do it Spain, at a relevant Provincial Immigration Office, there you will have to bring a certificate issued by a notary, that will register your real estate purchase.

Purchase of a real estate.

The purchase must be made before a notary and then be registered in the Property Registry.

New realties have a VAT of 10% (21% in case of plots of land or industrial buildings).

You won´t be able to refund the VAT if you buy a new residential property, unless you buy it to perform some economic activity (e.g.: vacation rental), for this you will need to obtain a corresponding license.

If you buy a re-sale property, it is necessary to pay a Transfer tax, that depends on each local community (it is about 8%).

The revenues obtained from the realty rental are subject to a withholding tax of 24,75% for non –residents.

Another tax to be paid is a real estate tax, that levy local town halls. This tax ranges from 0,3% to 1,1% of the cadastral value (value assessed by the Cadastral Office). The amount of tax depends on each local town hall.



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