7 Essential Steps for Investing in Spain
Investing in real estate is an attractive financial investment, especially when it is done in the right areas.
Many investors have been choosing Spain to invest in real estate because of this country’s advantages in the real estate field. Are you considering buying a property in Spain? If yes, here are the necessary steps to do so.
1. Obtain the Foreigner Identity Card
The first step to investing in Spain is to obtain a Foreigner Identity Card. This is an essential document for any new foreign investor in Spain, as the deed of purchase cannot be signed without it. Also, the Foreigner Identity Card allows foreigners to open a non-resident account.
It should be noted that it can take a long time to obtain. This could slow down the process of investing in Spain. However, an alternative has recently been proposed to new investors to facilitate their task.
In fact, as a transitional measure, they can use a Tax Identification Number instead of the Foreigner Identity Card. Thus, they can move forward in the steps while the document is issued.
2. Define your budget and make a financing study
After obtaining the Foreigner Identity Card, the next step is to study the financing. It will be necessary to define the budget and to look for financing.
On this point, you should keep in mind that Spanish banks only lend up to 80% of the property’s value, not including notary fees.
Sometimes, for non-domiciled people, this rate can be lowered to around 50%. Therefore, before buying an apartment in Spain in a city like Barcelona, it is crucial to have a reasonably large budget in advance.
3. Proceed with the search for the property
Once you have defined your budget and found the ideal financing, the next step in investing in Spain is searching for and selecting the property you wish to purchase.
It is highly recommended that you call on a professional in this field, especially if you are not in Spain.
According to your needs and budget, the latter will find the ideal property for you.
4. Make the necessary verifications
The next step in finalizing your project to buy a property in Spain is to make the necessary verifications on the property.
This consists of making sure that the documents of the property you wish to purchase are in order as required in Spain. For example, you can request a report on the legal status of the property.
5. Reserve the property
Once you have completed the previous step and have found the property you want, you will have to agree with the seller on the property’s value. Then, reserve the property.
Once you have agreed on a price, you must proceed to the property reservation to seal the deal. It consists of paying a certain amount, generally between 1000 and 4000 euros, and is endorsed by a reservation contract.
In this way, the seller will be obliged to withdraw the property from the sale. According to the validity period of this pre-contract, you will have time to complete all the other necessary steps to finalize the purchase of your apartment in Spain.
6. Signing the sales agreement
Once all the necessary checks have been made and the property is in order, it is time to sign the preliminary sales agreement.
This is a private contract signed between the buyer and the seller, which contains all the details of the sale and related clauses.
The sales agreement is usually required once the notary signs it, and neither party can withdraw from the transaction.
At this stage, the property buyer is called upon to complete the sum paid at the time of reservation up to approximately 10% of the property’s value.
7. Finalizing the transaction at the notary
Once all the preliminary steps have been completed, the act that will definitively validate your purchase in Spain is the deed of sale signed before the notary.
The notary will be responsible for authenticating the signatures and ensuring that both parties and the financial settlement respect the terms of the transaction agreement. It is important to remember that the Foreigner Identity Card and the signed sales agreement must be presented.