Spain is a country with many opportunities for real estate investment, and proof of this is that, over the past decade, foreign investments have been a key factor in the growth of the Spanish economy.
Some reasons to invest in real estate in Spain include:
A high quality of life, with a landscape boasting 8,000 kilometers of coastline, beautiful beaches, and excellent weather with over 300 days of sunshine each year.
A very active real estate market, where advantageous buying, selling, and rental transactions are possible.
Most foreigners looking to invest in Spanish real estate seek properties in Valencia, Madrid, Barcelona, Costa del Sol, the Valencian Community, and the Balearic Islands, with a particular focus on luxury homes.
How to Invest in Real Estate in Spain: Taxes and Fees for Foreign Investors
Foreigners wanting to make real estate investments in Spain must consider two aspects that directly impact the taxation of the transaction and the types of applicable taxes:
- Whether or not they have Spanish residency.
- The country of origin of both the buyer and the property seller.
The purchase of any property is subject to the payment of the Property Transfer Tax and Stamp Duty (ITP) within one month of the sale if the property is pre-owned, or the Value Added Tax (VAT) if the property is new.
In both cases, the buyer is also responsible for paying the Property Tax (IBI) annually once they become the owner.
Is a Residence Permit Required to Buy Real Estate in Spain?
No. However, investing in Spain as a foreigner involves a dual tax burden, which is why many buyers consider acquiring tax residency in the country.
To apply for tax residency, investors must prove they stay physically in Spanish territory for more than 183 days a year or have the main base of their activities or economic interests in the country, either directly or indirectly.
At INVAMA, we advise our foreign clients and provide access to our legal department for consultations and the necessary administrative procedures for purchasing a property, such as obtaining a NIE (Foreigner Identification Number), opening a bank account, and legal assistance throughout the buying process.