For foreign investors
The economic situation today in Europe, and the special weakness of the economic and property market in Spain, makes our country a place with attractive potential for foreign investors who want to acquire property here.
The climate, the lifestyle, the beaches - but above all, very accessible prices compared to other countries, mean that citizens of other countries in European and beyond can make their own plans in Spain. At a time when access to credit is really complicated for the people of Spain, there are many facilities for a foreigner to purchase a home there.
The fall in housing prices in Spain (13.7% average in 2012, and 9% in 2013 and 2014, according to the National Statistical Institute), has handed this investment "on a plate" to foreigners, and more and more are buying homes here. According to the Council of Notaries, in 2012 the sale of homes to non-resident foreigners in Spain increased 28.4% compared to the previous year, and 23% in 2013 compared to 2012.
People from Britain, Russia, France, Norway, Belgium, Germany and South America and Italy are (in that order) the ones who currently showing most interest in buying a house in Spain, particularly in coastal areas, without forgetting the Chinese community, which usually buys apartments in major cities (Madrid, Barcelona, Valencia, etc)
We at FELOP DESIGN take responsibility from for the search and for offering property at rock bottom prices, as if we were doing it for ourselves, that is, on the criteria which the experience of more than 15 years in the sector of housing design and property promotion in Spain have given us. We seek the best quality-price ratio in the large stock available, and based on the investor´s needs and tastes, whether he needs it to live in, or whether he wants to earn some income by letting it once he has bought it.
We take the spatial qualities of design, functionality, orientation, facilities and location very much into account, among many other elements that enrich any property, and will offer enhanced value in the medium and long term.
The first thing we do after receiving an investor specification on a Contact Form, is to look for something for the investor to choose, with several examples to match his needs. The properties are visited, directly by ourselves at FELOP DESIGN, to check on their real state, and ensure that there is no kind of construction problem or hidden vice. After this, the property is photographed, and a dossier is compiled with a description of its leading characteristics, and terms of sale.
We perform all the procedures for the investor to obtain his Alien ID No. (NIE). We draft the powers of attorney required for processing in the country of origin, to give us the possibility of acting on your behalf for any procedure required in the purchasing process, up to and including the signature of deeds. We compile documents on the property with simple and informative notes, the most recent payment for property tax, certified to be up to date with the community of neighbours, if any, and title deeds, etc. All of this is done in order to determine and demonstrate that the property is free of encumbrances, or from any legal problem or embargo, check as to whether it is in arrears with any state or private administration.
Travel and procedure for visiting properties
If the investor needs or wants to come and see the property, we help him to organise his journey, hotel reservations, collection at the airport, and visit all the properties selected; and accompany and advise him right up to the moment of signing the deeds, and the handing over of keys to the property.
If the investor buys the property with the intention of earning income, and wants to let it, we can also obtain ideal tenants, and administer the contract, drafting it and guaranteeing that the property will be properly preserved, and that the monthly rental agreed will be paid promptly.
Complete our Contact Form, and we will ring you immediately.
Procedures and Financiing.
Procedures to buy a house in Spain
Buying a house in Spain is quite a simple process for a non-resident foreigner. All he needs is an is an Alien Identification No. (NIE). This is a personal, unique and exclusive number, issued in numerical order, which must be used for any type of economic transaction in Spain (from opening a bank to buying a house).
Obtaining the NIE
The NIE is issued ex officio by the Directorate General of the Police to any alien initiating any administrative process, but it can also be requested, provided that the reason for the request is demonstrated The request may be made from outside Spain (through an embassy or consulate), or within the country, going to an Aliens Office, or a Police Commissioner's Office.
Bank accounts, tax payments and conveyancing expenses
After requesting and obtaining the NIE, a non-resident foreigner in Spain can start the purchase process. It is not necessary to have a bank account in Spain, but it is advisable, since all taxes and related expenses on a purchase of a home or property, such as a value-added tax (IVA) at 10% in the case of new housing, or 21% in the case of commercial property, offices or land, the Capital Transfer Tax (ITP) of 10%, in the case of second-hand residential properties; notarial expenses, management and registration, at between 0.5% and 1% of the value of the property; and finally, taxes subsequent to purchase, which the new owner will have to pay annually - such as the Property Tax (IPI), and the Refuse Tax. In Spain, all of these must be paid, and all this is much easier if you have a bank account.
In addition, there is income tax for non-residents (IRNR), which is a direct tax on income obtained in Spanish territory by individuals and legal entities non-resident in Spain, unless they pay tax through IRPF. A person is understood to have his habitual residence in Spain when he spent more than 183 days in a calendar year there. In this case, he would pay through IRPF, and not IRNR.
For title to property, the purchaser may appear directly in the local notary's office for the property. Or, if he has delegated the search and selection of the property to a local professional property agent, he can issue a power of attorney signed by a notary and carrying an Apostille or with consular endorsement processed in a country of origin, to give powers to the agent to sign on his behalf.
Financing the purchase of housing in Spain.
Spanish banks offer financing for non-resident foreigners in Spain with no problem, and there is access to the same mortgages which are offered to Spanish nationals. Further, the financial conditions are very similar to those which apply to Spanish citizens: maximum finance of 50% of the value of the rated value or purchase price of the property, and maximum repayment term of 30 years, at an average interest rate of your Euribor +2.75% (that is, 2.93% per annum. (April 2015).
The bank will also analyse the employment stability of the applicant, and level of indebtedness.
Residence for foreign investors in Spain.
The new Entrepreneurs´ Law includes the grant of a residence permit for Indians who invests in Spain, and this came into force in October 2013. The law says that non-resident aliens may obtain their residence permit provided that they have made a significant capital investment or purchase housing for at least €250,000. The Entrepreneurs´ Law says that a “significant” capital investment that meets one of the following requirements:
An initial investment of €2 million in Spanish public debt, or €1 million or more in shares or other capital interests in Spanish companies, or banking deposits in Spanish financial entities.
B) The purchase of housing in Spain must be made with an investment of €500,000 or more per applicant. The applicant must show and have available an investment in property of €500,000 free of encumbrances. The part of the investment which exceeds this amount may be the object of a charge.
C) An entrepreneurial project to be developed in Spain, and considered and shown to be of general interest, for which purpose and assessment is made of compliance with the at least one of the following conditions:
Creation of jobs.
Making an investment with social and economic impact of importance in the geographical ambit in which the activities to be undertaken.
Relevant contribution to scientific or technological innovation.
Procedure for requesting a residence permit in Spain for economic investments in property worth more than €500,000.
Valid only for non-EUcitizens, non-resident in Spain, at the time of investment.
1. Processing of the investor NIE, with the rest of his family will need a Residence Card.
2. Purchase of the property worth at least €500,000 (free of encumbrances).
3. Processing and documentation to be compiled in Spanish territory within 60 days, application for a visa in the Spanish Consulate in the country of origin.
3.1. The foreign investor must open a current account Spanish bank with a branch in Spain, and deposit €5,560.52 for the applicant, and 100% of the IPREM €6290.13 for each other member of the family.
The amount should be equal to or greater than €250,000, for the purchase of property.
3.2. To have or to be exempted from a public or private sickness insurance in Spain, with an entity operating in Spain.
3.3. To request a certificate of title and encumbrances on the property register.
Important note. If, after 90 days, the property purchased is not registered, the purchaser must appear at the Spanish Consulate in the country of origin, with the rest of documentation, "Record of Presentation" of the deed for the property purchased and receipt for payment of taxes on the purchase.
4. Visa applications. The purchaser must go to the Consulate in the country of origin or residence with all the documents mentioned above, to present the related application of "Resident Visa", as investor, showing (in compliance with the "Money-Laundering Law"), the origin of the applicant´s income, justifying bank movements made in the last year, and providing the valid passport of the investor and all his relatives, and paying the related consular fees. It is possible that the Consulate will also ask for photographs, a criminal record certificate from the country of origin, or a certificate of good conduct and a medical certificate showing the absence of illness, both of the applicant and his family, if there might be an obstacle to travel to Spain.
5. Application for a Residence Permit. Once the Resident Visa has been granted, the holder must travel within 30 days to Spain, to request the Residence Permit. The Permit effectively allows him to reside in Spain for two years, without having to leave after 90 days. Subsequently, the purchaser may request a Resident Card as a non-community citizen, and after 10 years, Spanish nationality.
Comments on the Resident Card/Pemit in Spain.
The investor may enter Spain without a Visa from his country of origin, and may also enter any other Schengen country without a Resident Visa, for a maximum period of 90 days, which the governments concerned can check against flight data.
The passport will not be stamped, since this only happens when someone from outside the EU enters the first Schengen country.
The United Kingdom is not part of the Schengen area, and therefore cannot be entered with a Spanish Resident Card.
In general, the regime allows relatives of communities of EU citizens to enter without a visa, if they have an EU Family Card in Spain.
Contact us at Felop Design, and we can answer any questions you may have related to housing design.