Investing in Spain
Spain, a land of contrasts and elegance, captivates with its refined art of living, rich culture, and enchanting landscapes.
From Barcelona to Seville, each city reveals a striking architectural heritage, where bold modernism meets historic grandeur. Its Mediterranean coastline and Andalusian lands embody the dolce vita, serenaded by flamenco and exceptional gastronomy.
A birthplace of artists and thinkers, Spain represents a vibrant and timeless passion, where tradition and modernity gracefully intertwine.
The steps
Acquisition process
1. Obtain the NIE (Foreigner Identification Number), mandatory for any purchase. 2. Open a Spanish bank account. 3. Sign a preliminary sales agreement with a deposit (usually 10%). 4. Verify encumbrances and debts (through the land registry and homeowners’ association). 5. Sign the official deed before a notary and register the property with the land registry.
Taxes and Fees
• VAT (New properties): 10% of the price (or 21% for commercial premises). • ITP (Transfer Tax – Resale properties): 6 to 10%, depending on the region. • Notary and registration fees: 1 to 2%. • IBI (Annual property tax): 0.4 to 1.3% of the cadastral value. • Tax on rental income: 19% for EU residents, 24% for non-EU residents. • Capital gains tax: 19% (exempt after 3 years if it is your primary residence).
Advantages & disadvantages
Dynamic and varied market (cities, coastlines, islands). High rental yield (tourism, expatriates). Moderate taxation for EU residents. Rising prices and strong competition in certain areas. Strict regulations on tourist rentals (especially in the Balearic Islands, where licenses are sometimes required).
Recommanded Areas
• Madrid and Barcelona: Strong rental demand and ongoing appreciation. • Valencia and Malaga: Rapid growth and lower cost of living. • Costa del Sol (Marbella, Estepona): Luxury investment and expat hotspots. • Balearic Islands (Mallorca, Ibiza, Menorca): Premium market, highly profitable but regulated.
Tax Strategies
• Purchase through a company (SL) to optimize rental taxation. • Favor long-term rentals over short-term (lower taxes in certain regions). • Establish tax residency in Spain to benefit from reduced capital gains tax.
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