Buying property is always a daunting task. Finances, locations, and contracts need to be taken into account, and this process can seem even more daunting as a foreigner. Purchasing property in Spain requires a lot of specific steps, just like in any other country, but fortunately, it is not too difficult or different of a process than what you’re used to. If you’re planning on buying a house or apartment in Spain, this article will guide you through the process of a successful purchase as a foreigner.
🏘️ What are the requirements and restrictions for buying a property in Spain? | How to get a NIE? | How to open a bank account in Spain | Buying a property in Spain, step by step | Find a Property and make an offer | Signing the Preliminary Contract and paying the deposit | Mortgage | Signing the final Contract
What are the requirements and restrictions for buying a property in Spain?
Fortunately, there are no restrictions for foreigners in buying properties in Spain. Having a NIE is the only legal mandatory requirement. Therefore, getting a NIE is the first and most important step for the sake of buying a property in Spain.
It is also helpful to open a bank account in Spain. It can make the process easier and the payment process faster. In addition, by doing this, you can even save money by not paying commissions or currency exchange fees.
How to get a NIE?
NIE stands for Número de Identificación de Extranjero, which means Foreigner Number of Identification. It is a personal, unique, and exclusive number that serves to identify foreigners in Spain, and it must be present in all legal documents issued or processed in Spain. You will need to obtain the NIE to purchase a property.
Here we are going to give a brief description of the steps to get NIE. An NIE should not be confused with a TIE, meant to prove your resident status within Spain. To learn more about the difference between a NIE and a TIE, as well as how to obtain both, there is a blog on our website that goes into further detail.
Briefly, the process to obtain your NIE is the following:
- Request an appointment at a police station
- Note: do this with significant time in advance since police stations usually don’t have availability until much later
- Pay the fee
- Print and fill the required documents, including:
- Photocopy of passport
- Completed EX-15 document in Spanish
- Complete the Modelo 790-012 and pay the tax at a bank or ATM
- Proof of need (i.e real estate contract, company name reservation, etc.)
- Attend to your appointment
- Pick up your NIE
- it will be a number written on a white piece of paper (A4 size)
In case the person is abroad, he/she can apply for it through the Spanish Consular Offices abroad. It generally takes about 1 month to get your NIE at the Consulate, but times may vary depending on the workload of the corresponding Consulate.
How to open a bank account in Spain?
It is possible to open a bank account as a foreigner in Spain as a resident but also as a non-resident.
Open a bank account in Spain as a resident
Being a foreigner and resident allows you to open a bank account in Spain with identification documents such as the TIE, the identity document of your country of origin, and your Passport. Further information on how to obtain a TIE can be found on our website.
If you are an EU citizen you can open an account in Spain using the CUE (EU citizen registration certificate – “certificado de residente de la UE”), together with the identity document of your country of origin or your passport, directly at a bank.
If you are not an EU citizen: you can open a bank account in Spain using the TIE and going directly to the bank.
Open a bank account in Spain as a non-resident
As a foreigner, you must go to any bank with an identification document (normally a passport) and the Non-Resident NIE. Other documents may be requested depending on the product to be contracted. The bank staff will be in charge of indicating the characteristics of the current account that best suit each person.
In particular, banks in Spain will ask you to provide proof of your income to identify the origin of funds (e.g. your last tax returns from your home country).
Buying a property in Spain, step by step
1. Find a Property and make an offer
Once you have your NIE, the next step is finding or choosing a property you want to purchase. Numerous websites and real estate agents offer services in practically all languages. You can even buy a property remotely and move there directly. Nevertheless, taking your time is essential for a successful real estate acquisition. Some real estate websites you can check to find your ideal property are Thinkspain, Servihabitat, Idealista, Kyero, pisos.com.
It’s always preferable to inspect the property in person and ensure everything complies with regulations – even if it requires a temporary stay in a hotel or short-term rental while your property is being prepared. Some aspects to take into consideration while looking for properties are:
- The property is correctly registered in the Property Registry. You can look for this information at the Registro de la Propiedad website by requesting a simple note – “nota simple”.
- The property had the proper permission to get built.
- The reputation of the lawyers or Real Estate agents involved in the transaction.
- Confirm that the property has no outstanding obligations or debts.
- Ask an architect or surveyor to confirm that there is no structural damage to the property.
You can get a better understanding of all these important aspects by getting the services of a lawyer. The assistance of a lawyer is highly recommended, especially when looking into foreign property.
Once you make an offer and it has been verbally negotiated and agreed upon, it’s necessary to have the agreement in writing. It is highly recommended to hire a lawyer to review the conditions of the sale.
The first document you would typically sign is a “reservation contract” in which the buyer pays a fee to reserve the right to acquire the property for a determined time period. Therefore, the seller cannot sell the property to anybody else during that period. This is not obligatory, but it is always advisable, depending on the buyer’s conditions. It is important to consider that by signing this agreement, you will lose money if you don’t complete the purchase or include a walk-out clause, so it is better to be sure about it before acquiring any obligation.
2. Signing the Down-Payment Contract and paying the down payment.
Once you are confident enough to purchase the property, you´ll sign a contract with the seller called Contrato de Arras. This is an agreement in which you both commit yourselves to carry out the sale and purchase within the term you have agreed upon. We recommend that this period lasts about three or four months, so that you have time to find a mortgage in the case that you need one.
Once the contract is signed, you will have to pay a down payment, which is usually around 10% of the property value. If the seller backs out before the contract expires, you will normally be able to recover that money doubled. If you back out, you will not be able to recover that amount. Nevertheless, a good way to avoid this loss of money is to specify in the contract that if you as a buyer are not able to get a mortgage, or if you discover any serious defects of the property, you have the right to back out of the deal without losing any money.
The minimum information every Contrato de Arras should have is the following:
- Personal data of the seller and buyer.
- Description and identification of the good object of the contract.
- Final price of the purchase-sale and form of payment.
- Amount of money of the deposit or down payment (which will be discounted from the final price).
- Maximum time to formalise the contract of sale.
- Commitment, in its case, to sign the contract by means of public deed.
- Distribution of the possible expenses of the purchase-sale.
- Signature of buyer and seller.
In most cases, finding a mortgage is an essential part of buying a property. Many banks offer this service, but the most common way to find a mortgage that fits your needs is by contacting a mortgage broker in Spain.
Remember that non-EU citizens could have different requirements than Spaniards and that foreigners applying for a mortgage in Spain frequently face higher rates and less funding. Depending on the type of mortgage, residents can often borrow up to 90% of the property’s assessed value. In contrast, non-residents are limited to 60-70% loan-to-value.
It’s interesting to note that Spanish mortgage lenders frequently won’t finalise the contract until you purchase a property. This is why it’s critical to specify in the Contrato de Arras that you have the right to back out of the deal if you don’t get a mortgage.
4. Signing the final Contract before a Notary
The last step is to sign the official contract called Escritura de Compraventa, which has to be signed in the presence of a notary (it is a mandatory requirement). As a buyer, you have the right to choose the notary’s office where the transaction will be formalised.
Once the Escritura is signed, the only thing left to do is to register the property in your name at the Registro de la Propiedad. You can do it on your own, but it is preferable to hire a law firm or assign the same notary office to take care of this matter. Then, the house will be yours officially and publicly.
It is important to take in consideration that, unlike other countries where the payment is made to an intermediary, the custom in Spain is to make a direct payment to the seller at the moment of signing the purchase deed at the notary.
At Klev&Vera International Law Firm we are always glad to assist foreign clients in navigating the legalities of the real estate purchase process in Spain. We work with clients from all over the world and our English-speaking lawyers are there for you if needed.