Do you want to buy a house from the USA or Canada? Do you have doubts about how to do it correctly? One of the most frequently asked questions in our office is “Can I buy a property in Spain if I’m from the USA or Canada? The answer is yes. The process is no different to what a resident of Spain or the European Union might go through.
In this guide, we will explain the buying and selling process in Spain and we will show you the steps you need to follow.
1. Set your budget
In Spain, there are a wide range of properties, from very affordable to very expensive, depending on factors such as the facilities in the house, the location, social status, whether it has a pool or not, and more. There is a vast offering and a variety of properties to choose from. In such cases, it is wise to set a budget and outline the specific features you want in the property.
The considerations can vary significantly, whether you are buying for renovation purposes, opting for an already renovated home, or acquiring a property for rental versus personal residence.
You’ll also need to consider whether you’ll opt for a mortgage or not. You need to consider which type of mortgage best suits you and your real budget.
2. Apply for your NIE in Spain
The NIE is a mandatory document when carrying out the purchase of the property, without it you will not be able to do so. This is an identification number for taxes and for other operations such as opening a bank account in Spain.
At Malaga Solicitors, we handle the entire process of requesting the number. Often, when an individual tries to request it themselves it can take up to 1 or 2 months due to the few appointments given by the State.
We always advise that after obtaining the NIE, you should open a bank account in Spain. Buying the property with money from an American bank can delay the purchase due to money laundering controls and various checks by the monetary authorities.
3. Find the property
In Spain there are many portals where you can search for a property such as: Idealista, Fotocasa, Yaencontre, and more. But often, this is not the best option if you don’t know the area or how people live there. It is important that you work with a specialised person such as a real estate agent.
Once you find a property in Spain that fits your budget and requirements, it is common to make a formal offer. With the help of one of our lawyers you can draft an offer with persuasive reasons for offering a specific price and negotiations.
If the sellers agrees to the offer, the lawyer will to draw up the Contrato de Reserva, a document through which the buyer reserves the house in exchange for the payment of an amount of money (usually 5-10% of the property price) , known as ‘the deposit’, which will later be subtracted from the price of the house. Once the fixed term has expired, the seller undertakes to hand over the property.
Over 6,500 Americans live in the southern region of Andalusia and they are happy living here, the ideal is to look for an area where compatriots live so that you can share experiences if needed at some point. Although you can also fully immerse yourself in Andalusian culture. You can take a look at Axarquia area and Malaga City area.
4. Complete due diligence checks
Before completing a real estate transaction, it is important to carry out a thorough review of the property. This due diligence includes an audit in which, in addition to a deep study of the risks and obligations associated with the property, all aspects of the transaction must also be examined from a legal, technical, commercial and environmental perspective. The detailed inspection and analysis of the property’s relevant information aims to identify any factors that may affect the transaction so that the buyer can make an informed decision.
When conducting due diligence on a property, it is important to examine various documentation such as deeds, land records, municipal documents and surveys. However, one aspect that is often overlooked but is absolutely critical to verify is the legal authority of the seller to complete the sale. At first glance this may seem trivial, but you need to confirm the seller’s ability to legally transfer ownership of the property to you. This means establishing whether they are the sole owner, or if joint ownership requires consent from other parties.
It is also prudent to determine if the seller is married, and if so, whether their spouse consents to the sale. While obtaining such agreement may seem like a formality, instances where it is lacking are more common than one might expect, with potential legal implications for the buyer. A thorough evaluation of the seller’s standing is vital to a secure real estate transaction.
5. Sign and pay your deposit
Finalize the initial contract, often referred to as the “Contrato Privado de Compraventa“, and submit your 10% down payment. Typically this deposit must be paid within 10 calendar days of signing.
Be sure to include a liquidated damages clause, also known as an arres provision. This stipulates that should the seller later renege on the deal, you are due a refund of twice your deposit amount. Now is also the time to wrap up any remaining legal reviews, so the transaction will be ready to close shortly.
Protecting your investment from the onset and performing all appropriate due diligence will help ensure a smooth property exchange.
6. Close and register the sale
To finalize the transaction, both buyer and seller sign the Escritura de compraventa document.
At this point, the buyer must provide the remaining payment balance and settle any additional costs. Their legal representative will then lodge the completed sale agreement with the “Notaría Pública” (public notary) to officially record the change in property ownership.
The document have to be sign into the nearest Land Registry office (“Registro de la Propiedad“) to have your name inscribed as the new legitimate owner.
Once registered, this marks the culmination of the purchase process. The buyer can now take possession of their newly acquired real estate investment and enjoy their new home. If you are going to be resident, you can put yourself on the municipal (“padrón”).
Can Canadians Buy Property in Spain?
The allure of Spain is continuously attracting Canadians eager to own property in the vibrant Mediterranean country. From the bustling streets of Madrid to the tranquil beaches of Costa del Sol, Spain presents an array of opportunities for Canadian investors.
Investment Opportunities
Spain offers lucrative real estate investment opportunities. Property values are steadily rising, and high-demand locations provide excellent potential for capital appreciation, making it a prime choice for Canadians seeking profitable ventures.
Understanding Cultural Integration
Moving to Spain involves embracing a unique cultural lifestyle. Canadians should explore the local customs, languages, and traditions to fully experience the rich diversity and warmth of Spanish society.
Navigating the Property Tax Landscape
Understanding the tax implications of owning property in Spain is crucial. Canadians should familiarize themselves with local taxes, such as the Property Ownership Tax (IBI), to ensure compliance and avoid unexpected financial burdens.
Sustainable Living
Spain is at the forefront of sustainable living, with numerous eco-friendly communities. Canadians interested in sustainability can find properties with green technologies, promoting environmental responsibility and energy efficiency.
Embracing the Lifestyle
The Spanish lifestyle is an enticing aspect for many Canadians. The focus on community, leisure, and health offers a balanced way of living, making Spain an ideal place for both retirees and younger families.
Local Community and English-Speaking Services
Many Spanish regions, especially in coastal areas, host vibrant expat communities. Canadians will find English-speaking services and communities, easing the transition and fostering a network of support and camaraderie.
If you still have doubts or need assistance for buying your house in Spain or the payment of taxes for residents or non-residents in Spain, please consult with us.
MALAGA SOLICITORS GROUP
Jose M. Lopez-Avalos – Solicitor
Tel. 952 901 225 – mail@malagasolicitors.com
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