Things to consider when buying a holiday property in Spain as a non-resident
How to purchase a property in Spain for holiday accommodation purposes
September 2024
Many people fall in love with Spain when they visit on holiday. You might well return home from your trip wondering how to buy a property in Spain — and we’ve got some good news for you. Yes, it is perfectly possible for a non-resident to buy a property there and use it as a holiday rental. However, there are some quirks and legal requirements for non-residents in Spain. Here’s what you need to know.
How to buy a house in Spain for holiday accommodation: everything you need to know
When you start looking at the process of buying a house in Spain from the UK or another country, it’s a good idea to seek out local help. It’s essential if you don’t speak Spanish, but even if you have a decent grasp of the language, the legalities can be rather confusing. Look for both an estate agent and a lawyer who will help you through the stages of how to buy property in Spain. In popular holiday areas, such as the Costa del Sol, Costa Brava and Costa Blanca, you’ll find a number of English-speaking lawyers who specialise in working with international buyers. If you’re looking at a less popular area, finding a local lawyer may be rather more complicated.
It’s also worth familiarising yourself with some real estate terms. Questions like what is a Spanish finca, piso or casa rural will just slow down the process. A bit of basic lingo is always handy.
Can a non-resident buy a house in Spain?
Both EU and non-EU citizens can buy property in Spain. However, no matter where you come from, you’ll need a NIE number. Your NIE (Número de Identidad de Extranjero, meaning foreigner identification number) is a requirement for any kind of legal action in Spain. It generally takes about two to three weeks to obtain a NIE. Your lawyer will help you get one. Even if you’re out of the country, it’s possible to get an NIE by giving your lawyer notarised power of attorney.
Once you have your NIE, you’ll be able to open a Spanish bank account. To do this, you will need your new NIE number and some form of ID, such as your passport. Again, this is a legal requirement to buy property in Spain.
Do you pay tax when buying a house in Spain?
Yes. In fact, this is where things get quite complicated. The first tax you’ll need to pay is ITP (impuesto de transmisiones patrimoniales, or transfer tax). This must be paid when a property listed in one person’s name changes hands. If you’re buying a brand-new property, then transfer tax does not apply. However, IVA (VAT) does, at a flat rate of either 10% or 21%.
Taxes when buying a new property in Spain can be hard to calculate, as they depend on the region. Spain is divided into 17 autonomous communities, and each has its own tax rates. Some regions have progressive transfer taxes, while others have a flat rate. Depending on the part of the country, you may pay anything from 4% to 11%. Your lawyer will be able to help you understand this better.
You may also need to pay for a valuation. Property valuation in Spain can cost anything from €250 to €2,000, depending on the complexity of the plot. This is usually carried out before any kind of mortgage applications begin.
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Can I live in Spain permanently if I buy a property?
Not necessarily. EU citizens can live in Spain, but people from other countries — and yes, that includes the UK — will need to meet the requirements for a residence permit. Without one, you can only stay for a maximum of 90 days within a 180-day period.
Spain does offer Golden Visas to some property buyers. You’ll need to spend at least €500,000 on property to qualify. This sum doesn’t need to be spent on a single property. The Golden Visa is good for one year, and can then be extended if you continue to maintain your investment.
How can I let people rent my holiday home in Spain?
Before trying to advertise your holiday home for rent, check things with your lawyer. In recent years, some Spanish cities and regions have clamped down on excessive holiday rentals. This may make it extremely difficult to get a licence to rent a holiday apartment, particularly in popular areas like Palma de Mallorca or Barcelona. Again, check with your lawyer, who should know all the ins and outs of the area. Some areas are particularly strict about certain holiday rental websites, such as Airbnb.
Your property must meet the minimum legal standards to serve as a holiday rental. Depending on the area, these may include central heating or air conditioning, as well as basic safety rules. You’ll need to get a valid licence before you start to post your property on any kind of holiday rental portal.
Is selling property in Spain as a non-resident easy?
If you decide to sell your property, you’ll need to make sure your documents are in order. These include the title deed, your NIE and the land registry record, as well as documents certifying that you have no outstanding debts with the local residents’ association.
Selling property in Spain as a non-resident has some costs involved. You can expect to pay around 3-6% of the sale price in estate agency fees. You’ll also need to pay the plusvalía, a municipal tax that goes to the local town hall. The value of the tax will depend on the number of years you’ve had the property, as well as how much its cost has changed. In Spain, land value increases every year, regardless of how the real estate market is doing, so watch out.
You’ll also need to pay capital gains tax if you’re making a profit on your sale. The amount varies: EU citizens pay it at a rate of 19%, while non-EU citizens must pay 24%. Like the plusvalía, this must be paid within 30 days of your sale.
It’s always best to work with a Spanish lawyer when you want to buy or sell a property in Spain. You might find that there’s a surprising amount of paperwork involved, and trying to do it yourself is a sure-fire recipe for headaches. With a legal professional by your side, you’ll find it a much less stressful and more comfortable task.