Spain attracts tens of millions of tourists each year. In fact, just before the COVID-19 pandemic put a halt on most international travel for tourism, Spain had ranked the second most visited destination in the world with 83.7 million visitors, just behind France with 90 million. Spain also finds itself as the second most popular spot for British expats to settle in. According to some estimates, approximately 370, 000 British expats have decided to make Spain their new permanent home.
With all this in mind, moving to Spain from the UK and spending your days among the friendly locals has become an alluring idea for many. However, since the UK officially left the EU, it is now considered as a third state when it comes to procedures and regulations regarding acquiring residency.
Multiple legal requirements must be cleared on the path to becoming a permanent resident. To navigate the bureaucratic system, avoid paying unnecessary taxes, and get settled in without much hassle, you should consider consulting a specialized solicitors and tax advisors firm.
Despite the initial inconveniences, Spain wouldn’t be such an enticing destination if it didn’t have a lot to offer. For example, the country enjoys around 320 sunny days in a year. It also has a vibrant and rich culture that spans different art fields such as paintings, architecture, music, and more.
For the more practically inclined, Spain offers low-cost living arrangements while having one the best-rated health care systems in the world. So, to embark on the journey to relocate to Spain permanently, it is crucial to choose and buy your perfect new home.
Buying A House in Spain
Figuring out the costs of the purchase and the associated taxes could be a hassle without any professional help, though. Let’s start with several important factors determining the total amount you may need to pay. For example, there is a significant difference between buying a new property from a developer and buying a resale one offered by a private individual.
A VAT(IVA) tax of 10% on the purchase price is applied in the first case. The property, however, must be considered a villa, flat, or apartment purchased for the first time and sold by a developer, banker, promoter, or usual trader. In addition, a Stamp Duty (AJD) must be paid for the transaction. The specific rate depends on the autonomous community where the property is located. As an example, properties in the region of Andalusia are taxed with a Stamp Duty of 1.2%.
When buying a home in Spain that has already been transferred one or more times in the past and the grantee is typically an individual, no VAT payments are required. However, a Stamp Duty for a resale home (ITP) is applied. Keep in mind that is different from the Stamp Duty on new homes. Again, the exact rate varies from region to region, with the rate in Andalusia being set at 7%.
Finalizing the purchase of the property will also involve several additional costs, starting with paying notary fees. These are almost exclusively handled by the buyer and depend on several factors such as the deed’s number of pages, the total value of the property, and the various documents that need to accompany the deed. Registering the property in the Land Registry may not be required by law but is still recommended as it provides legal protection for the property’s holders. Doing so will make the property legally registered in the buyers’ name.
You may also have to settle any legal fees incurred in the process. After all, to ensure that you get the best possible deal and to help you acquire all necessary documents, it is generally recommended to consult both a lawyer with sufficient knowledge of the local laws and a tax advisor.
They will help you through the process of conducting Conveyarcing or Due Diligence regarding the chosen property, acquiring your absolutely mandatory NIE (National Identification Number) number, as well as representing your interests before the notary or any public entities. The fees will generally be calculated based on the case’s complexity and workload.
Finally, to transfer the money for the purchase, you will need to open an account in a bank in Spain and transfer the funds to it. The transfer of the funds could incur international transfer costs, especially if they are in a currency different from Euro. To minimize these banking costs, you could seek a specialized broker.