Spain 🇪🇸
Invest in Spain's vibrant coastal properties and urban hotspots. Popular for holiday homes and retirement properties.
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Overview
Invest in Spain's vibrant coastal properties and urban hotspots.
Laws & Regulations
- Non-residents can freely purchase property
- Golden Visa program for investments over €500,000
- Property transfer tax varies by region (6-10%)
Investment Programs
- Golden Visa program for residency through investment
- Tax benefits for retirees in certain regions
Resident
stamp Duty
Impuesto de Transmisiones Patrimoniales (ITP) varies by autonomous community:
Rates:
- Madrid and Castilla y León: 6%
- AndalucÃa: 7%
- Catalonia: 10%
Additional Rate: Calculated based on purchase price or market value, whichever is higher
capital Gains Tax
Capital Gains Tax (Impuesto sobre la Renta de las Personas FÃsicas - IRPF) on property sales:
Rates:
- Up to €6,000: 19%
- €6,000 to €50,000: 21%
- Over €50,000: 23%
rental Income Tax
Income Tax on rental income (Impuesto sobre la Renta de no Residentes - IRNR):
Rates:
- EU residents: 19%
- Non-EU residents: 24%
Non-Resident
stamp Duty
Same ITP rates as residents, with additional documentation required
Additional Rate: 6% - 10% depending on the region
capital Gains Tax
Non-residents must pay Capital Gains Tax on property sales
Rates: 19% up to €6,000, 21% from €6,000 to €50,000, 23% over €50,000
Reporting Period: Must file a declaration within 3 months of sale
rental Income Tax
Non-residents must pay tax on rental income
Rates: 24% (19% for EU, Iceland, and Norway residents)
Additional Requirements: Quarterly tax returns required
Mortgage conditions in Spain:
Average Rates:
2 Year Fixed: 3.0% - 4.0%
5 Year Fixed: 3.5% - 4.5%
Deposit:
20% to 30% deposit typically required, 30% to 40% for non-residents
Title Issues
Thorough property rights check and debt verification needed.
Estimated Cost: €300 to €600 for title check
Hidden Defects
Errors in registry or hidden encumbrances can cause legal disputes.
Inspection Cost: Experienced lawyer recommended for full inspection
Squatter issues can lead to lengthy legal proceedings and additional expenses.
Estimated Legal Costs: €1,000 to €5,000 for residents, up to €7,000 for non-residents
Resident
interest Rates
Mortgage rates for residents depend on the ECB key rate. As of 2024, fixed rates range from 3% to 4% per annum. Variable rates are based on the Euribor index, which is around 4.12% as of September 2024. A markup of about 1% is usually added to the Euribor.
Range: 3% to 4% for fixed rates, Euribor + 1% for variable rates
Source: Euribor Rates
down Payment
Residents typically need a down payment of 10%-20% of the property value. Mortgage loans cover up to 80%-90% of the purchase price.
Range: 10% to 20%
Source: BBVA Mortgage Information
mortgage Term
Standard mortgage term for residents is 20 to 30 years. A longer term allows for lower monthly payments but results in higher total interest payments.
Range: 20 to 30 years
Source: Bankia Mortgage Information
documentation
Residents need to provide tax returns for the last 2-3 years, employment certificate, and income statement for mortgage approval. Missing documents can delay the process by several weeks.
Source: Mortgage Spain Documentation
casestudy
For example, an increase in the variable rate can increase your monthly payment by 20-30%. In 2023, many borrowers faced such an increase due to a sharp rise in Euribor.
Source: El Confidencial - Euribor Impact on Mortgages
Non-Resident
interest Rates
Mortgage rates for non-residents in Spain are higher than for residents. They start from 3.5% to 5% per annum. This is due to additional risks for banks as borrowers do not reside in the country permanently.
Range: 3.5% to 5%
Source: Sotheby's International Realty
down Payment
Non-residents need to make a higher down payment — from 20% to 40% of the property value. Banks on average provide loans covering 60%-80% of the purchase amount.
Range: 20% to 40%
Source: Santander Non-Resident Mortgage Information
taxation
Non-residents must pay capital gains tax when selling property (PlusvalÃa). The tax is 19% of the capital gain plus 17.2% social contributions, totaling 36.2%. Non-residents must file a tax return within 30 days after the sale.
Source: Spanish Property Insight - Taxes for Non-Residents
mortgage Term
For non-residents, mortgage terms are often limited to 15-25 years. This is due to higher risks for banks.
Range: 15 to 25 years
Source: Santander Non-Resident Mortgage Information
casestudy
One of the unpleasant cases that non-residents face is missed changes in contract terms. For example, one borrower faced delays and penalties due to errors in signing the contract and incurred legal support costs of €50,000.
Source: Idealista - Non-Resident Mortgage Issues
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