Many foreign investors are looking for home, especially in large capitals (Madrid, Barcelona or Valencia), Levante and Andalusia.
The Valencian Community is the region where the sale of flats and houses by foreigners is most active: according to data from the College of Notaries, in 2018 more than 30,000 real estate transactions with non-resident buyers were registered in its three provinces. Andalusia (19,000), Catalonia (15,000), Madrid (9,000), the Canary Islands (9,000), the Balearic Islands (6,000) and Murcia (5,000) are other communities that most frequently attract these buyers. By provinces, Alicante, Santa Cruz de Tenerife, Malaga, Girona and Las Palmas are the most demanded by foreigners looking for houses and flats in Spanish territory.
A large part of these operations is signed by British citizens, who in 2018 increased their purchases compared to the previous year: 15,300, 18% more than in 2017. This increase occurred even after the Brexit referendum.
French (8,242) and Germans (7,913) are other common foreign investors in Spain, along with Romanians, Moroccans, Chinese and Russians.
Why do foreigners invest in housing?
The drop in prices in the last decade has led many foreign citizens, especially from the nationalities least affected by the crisis, to invest in housing. Establishing a generic profile, this buyer has high purchasing power, has enjoyed his holidays here and takes advantage of the situation to buy at an affordable price, especially in coastal areas.
Another reason is the per capita income: with minimum wages that double or even triple that of Spanish, some European citizens (British, German, Danish, Swedish, etc.) take half the time that we do to pay a mortgage, which facilitates the purchase of a second residence with good financing conditions.
A third reason that justifies the increase in foreign investment in our real estate market is the quality of life. In a global and digitized world, many entrepreneurs and young families seek to move to Spanish cities or rural areas due to their climate, culture, gastronomy, communications, etc.
What type of home is this buyer looking for?
One of the great demands of non-resident property buyers in our country is the enhancement of outdoor spaces, especially terraces that offer light and can be used as leisure space.
Most of them are looking for flats or houses in beach areas, especially in the case of vacation homes. Foreign clients with high purchasing power and who invest in luxury homes in Spain also look for properties located in neighborhoods and prime areas of cities or in urbanizations with security and a high level of privacy.
Finally, international clients take sustainability very seriously, and when investing in housing they value aspects such as energy certification or the efficiency of the facilities.
Particularities of selling a flat to foreigners
If you are looking for a fast and solvent buyer, or if you already have a foreign buyer interested in your home, this information may be interesting for you.
First of all, you should know that there is no legal restriction for a foreign person to acquire a property. In this sense, when selling a flat to foreigners the same conditions are required as for a Spanish citizen, although with some particularities.
To start the financing, although this does not affect the seller. Many citizens without residence apply for mortgages in our country, with the bank in charge of verifying if they have debts in their country, complying, in turn, with international regulations on money laundering. If the bank has doubts about it, it will not grant the financing. On the contrary, if these citizens decide to take out the mortgage in their country and their bank grants it, there will be no problems in carrying out the transaction.
Along the same lines, banks grant less mortgage credit to foreign citizens: 70% for the purchase of a home and not 80% as is usual in our country.
The particularities of the sale of a flat to foreigners are linked to who the foreign person is, the buyer or the seller. This condition (that of a non-resident citizen) applies to people who do not meet these requirements:
- Reside 183 days a year.
- Carry out most of your economic activities.
- Have a spouse or minor children who habitually reside.
When selling an apartment to non-resident foreigners in Spain, the buyer is required to obtain the Foreigner Identification Number (NIE) before registering the sale. This procedure can be done at the Foreigners Office, at the General Immigration Office or at the Spanish Consular Offices. On the day of signing before a Notary Public, this document must be correctly completed and signed, and presented together with the original and photocopy of the buyer’s passport or identification document. It is also advisable for him to open a bank account in our country to credit the payment of the sale and the taxes derived from the operation.
Otherwise, the process is very similar to any transaction of these characteristics between Spanish citizens. The sale requires a public deed, before a Notary Public and registered in a Property Registry located in Spain. Depending on whether it is a new or second-hand apartment, in this contract the corresponding taxes must be settled: Capital Gains, Tax on Patrimonial Transmissions and Legal Documents (ITPAJD), and VAT (if the house is new 10% and if the percentage marked by the autonomous community where the house is located is second-hand). Foreign buyers must also pay Non-Resident Income Tax (IRNR).
From Sky Marketing we advise our clients to sign a deposit contract before the sale to guarantee the security of the operation.
Is it advisable to seek professional advice?
One of the problems that many people find when selling an apartment to foreigners is the language. Sometimes, it is difficult to understand all the procedures, so it is quite common to hire an interpreter. It is a question of security for both parties. He thinks that the Spanish legal system is unknown to the majority of foreigners who want to buy a house in Spain, and that they too should seek advice to guarantee compliance with all the procedures carried out.
On these occasions, it may also be advisable to hire a lawyer to resolve any question or situations of mistrust due to lack of solvency, fraud, etc.
Our advice for this type of transaction is to be advised by experts in the sector. Not only because we have the means and knowledge, but also because this type of client looks for their home in Spain through professional portals, and at Deplace we work with some of the most important.
In addition, online real estate agencies such as Tajarat properties take advantage of “protect”, that is, all the new technologies applied to the real estate sector, thus guaranteeing the sale of your house over the Internet. Our services include home appraisal, ad creation, buyer analysis and filtering, paperwork management or negotiation, among others.
Are you interested in selling your apartment to foreigners? Contact us.