- The first step in buying a property in Spain is to get NIE, basic identification number for foreigners or “número de identificación de extranjeros”. You will need it to open a bank account and to pay some mandatory taxes. So here is where you start.
Read here to know more on how to get your NIE fast
There are three ways to get a NIE for acquisition of property
- You may try to get NIE through Spanish embassy or Consulate in your country. First of all, you need to call the Consulate and ask for an appointment. Then you fill in some forms (EX15 NIE y 790 ) and the embassy then sends them to Police in Spain. You will need to submit a list of other documents such as passport copies, your health Insurance and a document showing your funds (translated into Spanish), Spanish Visa, passport photos. You might be asked for a copy of deposit contract which would show that the reason for obtaining a NIE is acquiring a new house. You will wait several weeks after your application for the Embassy will get in touch with you.
- Other option is to obtain it yourself while being in Spain. You will need to book an appointment with the public administration office and submit completed forms and documents. Then you will be contacted by the office to come pay off the administrative costs, give your fingerprints and obtain the NIE.
- The alternative way to obtain NIE is to get a representative who would do the paperwork and visit the administration offices for you. Once in Spain, you could sign a Power of Attorney for the representative to obtain a NIE for you. You will need to leave a copy of your passport sealed with The Hague stamp. This seems like the easiest and the least time consuming method, in comparison with the other two.
2. The next step is getting informed. Not only the prices, the laws and the taxes involved in buying a property but also about the bank loans, the Real Estate commissions, the basic regulations regarding the property market in Spain. You do not want to end up disappointed with your newly purchased house.
3. Find the property you want. The traditional way would be doing your search online, comparing features and prices and choosing some properties that interest you. You then contact the Real Estate company or the seller and arrange a way to look at the property.
Consider real estate companies who offer a free stay in a hotel or a house during the process of buying your new house. They invite you to stay a week or two in a holiday rental place and programme visitings to properties that you have shown interest in over the phone or internet search. Agents drive you around and show properties to you and if you buy one- all of their services, including the stay, are for free. BUYER ASSIST
Some people get an idea of the geographical area they want their new house to be located at. Then they drive around the area, look at For Sale signs, ask neighbors, and find out real estate agents who operate in the area. You can also consider renting a place in the neighborhood- the best way to get the impression about the location and getting to know the market around. Many property owners who rent out their house are selling too, so make sure you contact a Rental Agent and get properly informed.
- The deposit contract or “contrato de arras” is a contract signed between buyer and seller before the bank loan is signed. Usually the buyer pays 10% of the price of the house as a sign of interest and the seller gets it off the market. Make sure that the deposit contract states that the money go back to the buyer in case the bank denies the loan.
- Gather the money and get a bank loan. The property is valuated, so it must be registered in Property Registry.
The banks usually offer to loan 80% of the price, so you´d need to have the other 20% ready. The expenses of the transaction may rise high, so have another 15% prepared. Keep in mind that in order to buy a house worth 300 000, you should have on hands 105000.
It is recommended no to set your monthly check higher than 35% of your monthly earnings.
The bank entity will ask you to submit a list of documents:
- ID of the people involved in the transaction
- Tax declaration documents
- Your labor report
- Bank transactions in the last three months
- Card payments
- Your working contract
- Deposit contract
It will take around a week for your bank to deliver a decision on the concession of the loan.
Examine the loan. It will present the amount and the way of payments. Read carefully all the information about the number of payouts, the periodicity, the dates of payment, total and partial amortizations, commissions, valuation expenses, notary expenses, valuation expenses, nominal interest, reference index, etc.
The deeds signing. After you accept the loan conditions, the documentation is sent to public notary. There the deeds are prepared and sent to you, after which you will have 3 days to review it.
On the day of signing, the notary will check the IDs of the people involved in the transaction, expose all the debts that the property holds, acknowledge if the community bills are paid, check the energetic certification of the house, and will request the IBI tax payment.
Tax payment. You will need to pay IVA and Juridical Acts Tax if the house you buy is new; or Patrimonial Transmission Tax, if it is second hand. The seller will have to pay the Town Hall tax “plusvalía”. Check if the house is registered in the Property Register and its cadaster is changed into your name
Now you have bought your new house! Enjoy and tell others that it is not as difficult as it seems.
¿Do you want to earn money with its rental? Find a trustful manager to do ot for you. Rafleys Costa del Sol will do a great job and get the value you paid for the house back to you in 10 years in terms of earnings from holiday rentals. Get your PROPERTY REVENUE FORECAST