How to buy an apartment in Spain for a citizen of Ukraine, Russia, Kazakhstan

In this article, we will tell you how to buy an apartment in Spain for a citizen of Ukraine, Russia, Kazakhstan or Belarus. In addition, we will also pay attention to the purchase of a villa or a private house. In principle, any residential property in Spain is purchased according to the same rules, so the procedure will not differ, and we will tell you about the nuances. In this article, we will consider the following questions: What rights and obligations do foreign property owners have in Spain? Tips on how to conduct a remote (distance) and regular transaction. How much should the buyer pay in addition to the cost of the property? And some other nuances. Contents:

• Rights and obligations of foreign citizens when purchasing real estate in Spain
• What is the use of Deniz-Estate agency
• How to buy an apartment, house or villa in Spain for foreigners: step by step
• Step 1. Checking the property and booking it
• Step 2. Preliminary agreement
• Step 3. Preparing for the deal
• Step 4. Loan/Mortgage Application
• Step 5. Notarial contract
• Step 6. Payment for the transaction
• Step 7. Registration of the transaction
• Remote transaction
• Taxes and expenses

Rights and obligations of foreign citizens when purchasing real estate in Spain

Citizens of which countries are allowed to buy property in Spain?

Citizens of any country in the world have the right to buy real estate in Spain. There are no restrictions. You do not need to become a resident of the country, you do not need to obtain a residence permit (residence permit in Spain). No permits from local authorities are needed. The transaction can be completed by both an individual and a legal entity. The British, Germans, and French are very active in the Spanish real estate market. After them – the Chinese and Russians.

What type of property are foreigners allowed to buy?

There are no restrictions either. Foreigners can buy absolutely all the same types of real estate that the Spanish themselves buy: villas with land, apartments and flats on the primary and secondary market, any commercial real estate for any needs, plots and land for development.

Rights and obligations of foreigners when buying Spanish property

When purchasing a property in Spain , owners receive the following rights:

• Multiple Schengen visa, which allows you to stay in the country for up to 90 days. For a longer period, you need to apply for a residence permit.
• In 2013, Spain adopted the Golden Visa law, under which any owner of Spanish real estate worth €500,000 or more has the right to obtain a residence permit for the entire family. The program has been revised several times and since 2014 has attracted 5,515 investors to the country.

Any investor in Spanish real estate is obliged to:

• Pay all required taxes and fees
• Pay utility bills
• If the property is rented out to tourists, the requirements of this law must be met.
• Independently monitor compliance with laws and pay taxes in your country.

What is the use of Deniz Estate agency?

• We have been professionally involved in the sale of ordinary and luxury real estate in different countries (including Spain) since 2014.
• We are not official representatives of any specific Turkish developer, and therefore we are not interested in selling you only “our” real estate. You can rely on our objectivity when assessing certain objects.
• We offer a wide range of services to our clients:
  • Detailed cost calculation of any object from our database;
  • Analysis of expenses for further maintenance of the acquired property;
  • A complete analysis of the investment attractiveness of a particular region of Spain: calculation of earnings from resale, renting, access to cases of our previous clients.
  • Full legal support “turnkey”;
  • Online and offline tours for viewing objects, transfers, hotel accommodation, guides, translators.
  • Free and detailed consultations on various nuances related to laws and residence in Spain.
• We value our reputation highly, and therefore our investors.
• We build our business processes in a win-win paradigm.

How to buy an apartment, house or villa in Spain for foreigners: step by step

Step 1. Checking the property and booking it

Once the buyer has decided on the property, it can be withdrawn from sale by making a deposit. In the Spanish market, it is common to reserve a property for €3,000 – €5,000. The seller signs a receipt for the deposit, and this amount will subsequently be credited to the price of the property. After reserving the property, the buyer (or their representative) must order a certificate from the register of all owners and encumbrances. Typical encumbrances are obligations to banks or the municipality to carry out repairs to the property or improve the surrounding area (infrastructure). For objective reasons revealed during the inspection, the buyer has the right to a full refund of the deposit.

Step 2. Preliminary agreement

After the inspection of the property and the final decision on the transaction, both parties sign a preliminary agreement (reservation contract – contrato de arras) Attention! The preliminary agreement does not require the presence of a notary. He records the final decision in the preliminary agreement. What the document regulates:

• Contains information about the object.
• Contains information about the seller's obligations (for example, to repair the property or leave furniture in the apartment or house, etc.).
• Contains information about the buyer's obligations (within what period the main contract must be concluded and the entire amount transferred).
• When signing this agreement, the usual conditions are that the buyer pays the seller 10% of the property price. But other conditions for the deposit can be agreed upon.
• Contains penalties for termination: at the initiative of the buyer – he loses the deposit, at the initiative of the seller – he pays the deposit in double the amount.

Step 3. Preparing for the deal

Obtaining a foreigner identification number . It is necessary for major financial procedures, including purchasing real estate, getting a job or doing business. NIE (numero de identificacion de extranjero) can be obtained in advance, at the Spanish consulate in your country or on the spot at the police, in the immigration department. The documents required to obtain NIE:

• Original and photocopy of all pages of the foreign passport
• Two photos
• Receipt of payment of state duty (approximately €10)
• Completed EX-15 form

The NIE registration process takes from several days to several weeks (depending on the number of applications). The document can be picked up not only by the buyer himself, but also by his representative (by proxy). Opening an account in a Spanish bank . To register and conduct the transaction itself, you will need an account in one of the Spanish banks. Many financial institutions work with foreigners, we will indicate some (we work with them on mortgages and accounts):

• Sabadell
• Bankia
• Caixabank

When applying to the bank, you will need the following documents:

• Foreign passport
• Foreigner Identification Number (NIE)
• Documents confirming your income
  • For citizens of the Russian Federation: a certificate from work about the position held and salary, 2-NDFL, 3-NDFL, a certificate of sale of real estate in Russia, etc.
  • For citizens of Ukraine: Certificate of income from the place of work. Now it is called “Statements from the State Register of Individual Taxpayers on the amount/sources of taxes paid”. To do this, you will need to file an annual income tax return and pay personal income tax if you are not registered as an individual entrepreneur. The following are also accepted as supporting documents: statements on dividend payments, lease agreements confirming receipt of rent for renting your property, statements on income from bank deposits, and declarations and statements on the turnover of an individual entrepreneur as for the self-employed.
  • For citizens of Kazakhstan, a similar set of documents will be suitable, some may be called slightly differently.

Attention! Most banks will ask for documents translated into Spanish (or English) and legalized with an apostille.

Only official documents can be certified with an apostille. For example, notary issued documents, real estate title deeds, marriage certificates, etc. As a rule, the apostille is placed on the document by the Ministry of Justice of your home country. Documents can be translated both in your home country and in Spain. The second option will cost several times more. The operation of opening an account in euros is free, but then a quarterly or annual fee will be charged for account maintenance. You can open an account with a zero balance. The same account can be used to pay for utilities. All operations with the account can be performed from the online account of almost any bank.

Step 4. Loan/Mortgage Application 

If you want to get a mortgage loan for the property you are buying, you need to get the bank's support before signing the purchase and sale agreement with a notary. To do this, the buyer independently (or together with a real estate agent) needs to collect the necessary package of documents and send an application to one or more banks. Mortgage approval takes from a couple of weeks to several months. Mortgages in Spain are issued for a period of 5 to 25 years at 1.9% -3.6%. It should be noted that the lending conditions depend entirely on:

• The buyer's income and the documents provided to confirm it.
• Amounts of the first installment.
• Previous mortgages within the EU. If you are not buying your first property and have already taken out a mortgage in Spain or another EU country, the bank will provide you with much more favorable terms. This is explained by a trust (positive) credit history for other mortgages (even if they have not yet been fully repaid). With a positive credit history, the rate for you will be lower, 1.4-1.6%, the bank can provide coverage not for 50% of the property value, but for 70-80%, and so on.

Therefore, Deniz-Estate constantly draws the attention of its clients to the need to form a positive European credit history in order to use this tool for investments in the future, taking advantage of cheap loans!

Banks will require the following documents:

• Applicant's international passport.
• Tax number (NIE).
• Credit history certificate.
• Documents from the developer/owner of the property you are purchasing.
• Preliminary purchase and sale agreement.
• A bank statement for your account for 12 months (the statement should show your daily expenses and income; this should be the main account you use) The higher the turnover on the account, the better.
• Documents that confirm your sources of income; the more such sources and supporting documents, the greater the chances for the bank to make a positive decision on more favorable terms for you.

Step 5. Notarial contract

The guarantee of security of the purchase and sale transaction is provided by the Spanish notary, who conducts the transaction itself. This is a mandatory condition. The notary opens a file for each such transaction, attaching all the documents transferred to it. His own check for encumbrances is also added there. The notary is obliged to keep this file in his archive. The procedure for a transaction at a notary:

• The buyer and seller choose a date when they will meet at the notary's office to sign the contract (escritura publica).
• Each party may be represented by a real estate agent or real estate broker.
• If the transaction involves opening a loan at a bank, bank representatives must be present.
• If one of the parties is a foreigner who does not speak Spanish, the participation of a sworn translator is mandatory.
• All the nuances of the agreement must be discussed BEFORE the meeting with the notary. As a rule, he simply reads out a document that lists all the important terms of the agreement on which the parties have already reached agreement. If necessary, minor amendments can still be made.
• If there are no objections to the agreement, the notary makes a request to the Property Register and blocks the object of interest from third-party transactions. From this moment on, no operations with this object are possible.
• The buyer is obliged to sign all documents directly with the owner of the property (on the secondary market this is an individual, when buying a new building – the developer company).

Attention! On the part of the seller (and buyer), representatives have the right to sign documents only if there is a notarized power of attorney directly from the owner (buyer) for the right to carry out such transactions.

• The buyer gives the seller bank checks for the remaining value of the property, and the notary a check for the pre-calculated amount of taxes and fees. The seller gives: keys, property documents and receipts for payment of taxes and utilities. The notary gives the buyer a copy of the purchase and sale agreement; the original can be obtained after registration of the property in the Real Estate Register.
• After signing the deed, it is necessary to re-register the contracts with utility providers to the new owner.

Step 6. Payment for the transaction

The most popular method of payment for real estate transactions in Spain is bank cheques. The procedure is as follows:

• Opening an account in a Spanish bank,
• Transfer funds there from your bank account in your home country (proof of source of income will be required).
• The bank issues the buyer a special check, which the buyer gives to the seller at the time of signing the contract.

If the property is sold by a developer, then payment is made to the developer’s account.

Step 7. Registration of the transaction

The transaction is completed not by handing over the keys, but by an extract from the register. The notary sends the original contract to the register, where it is checked again for compliance with all the rules, and then the rights of the new owner are registered. This procedure can take up to three months. After successful registration, the buyer receives an extract from the register and the registered original of the purchase and sale agreement.

Remote transaction

Spanish laws allow you to conduct a transaction remotely if the buyer cannot come to the country in person. To do this, you need to make a notarized power of attorney for a representative in Spain (Deniz-Estate will be happy to help you with this). The power of attorney is issued in your home country and allows the representative to sign the contract and draw up accompanying documents on your behalf. It must be sent by mail to the authorized person (realtor or real estate agent), who will translate the document into Spanish and certify it with an apostille.

Taxes and expenses

Property Purchase Tax

The amount of this tax depends only on the type of property itself (primary or secondary market, commercial or residential). Everyone, both locals and foreigners, pays it the same. On the primary market. This is VAT (IVA – impuesto sobre valor añadido). For residential property in all regions of Spain, the rate is 10%. For commercial property or land – 21%. On the secondary market. This is a tax on the transfer of ownership (impuesto sobre transmisiones patrimoniales, ITP). It varies depending on the region. The national average is 8%, but it can be 10% (Catalonia) or 6.6% (Canary Islands).

Stamp duty (only for new buildings)

Stamp duty (legal recording of the act, IAJD – impuesto sobre los actos jurídicos documentados) is paid only when buying and selling new real estate. It varies from 0.5% to 1.5% of the value of the property, depending on the region of Spain.

Realtor services

The usual commission of realtors in Spain is 3-5% of the price of the property if we are talking about buying real estate on the secondary market . We provide turnkey support, and not only before the conclusion of the transaction, but also help our clients with organizational issues after the completion of the transaction (issues of renewing the contract for utilities, choosing and hiring a management company, etc.). When buying real estate on the primary market from a developer, where we will represent you ( real estate agency Deniz-Estate ), our services will be completely free for you. Our business is built on commissions from developer companies. [special_block]

Lawyer's fee

If you hire a lawyer yourself, the hourly rate in Spain is €50-€300 per hour. At fixed rates, this can be €1,500-€2,000, and for some, 1-1.5% of the property price. For Deniz-Estate clients, these services are included in the general service package and do not need to be paid for separately.

Notary fees and property registration

These expenses are paid by the buyer. The amount is calculated by the notary, usually it is 1%-2% of the price of the property.

Translation services

If the buyer is a foreigner and does not speak Spanish, a translator must be present at the transaction, the standard rate of which is €100 per hour, plus VAT. The entire transaction process may take several hours. For Deniz-Estate clients, these services are included in the general service package and do not need to be paid for separately.

Mortgage fees

Attracting mortgage lending requires the inclusion of additional procedures:

• Property valuation €300-€500,
• The fee for opening a loan is 0.5-1% of the estimated value of the property.
• Property insurance €100-€1000 per year, depending on the amount of coverage and the type of property.
• Mortgage holder life insurance.
• (Possibly, but not necessarily) Mortgage broker services 0.5%-1% of the loan amount when selecting real estate on your own. Again, if our agency is your representative, you do not pay these costs, since in this case the mortgage brokers are our company employees and our Spanish partners, and this service is included in our turnkey service package.

In general, the total costs of buying real estate in Spain can be 12.5-13.5% of the property price when buying without a loan. And 15-16% of the property price when buying on credit.