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Our ultimate 2024 guide to buying your property in Spain
Since we started to invest in the Spanish real estate market in 2012, we have built a network of local real estate experts in Spain and become the one-stop-shop solution for foreigners looking for help to buy a property in Spain.
Foreigners, we have built this network first to find the solution for ourselves… then we wanted to share our network and our experience with other foreigners.
In six years, our readership grew to more than 460,000 from around the world!
To assist you even better, we launched this new series of four articles so that you get all your answers and all our tips before going after your dream property. We will cover the subject with 4 main articles:
- How should you start your Spanish property search?
- Where are the best places to buy a property in Spain?
- The best search tips for buying your Spanish property (if you are too busy start here)
- The 18 things to do as a new property owner in Spain (or anywhere)
Too busy? Here is our quick-read summary:
The ultimate guide to buying your Spanish property – Our key insights.
- The article is the introduction guide for foreigners buying property in Spain, leveraging the authors’ expertise and network.
- It outlines the process for starting a property search, including setting objectives, budget, and home criteria.
- It lists the different criteria you should use to compare the different potential properties and avoid an emotional decision.
- Criteria are different for a first home, a second home or an investment property.
- Don’t miss our dedicated pdfs with our exhaustive lists of criteria for each case in our third article: The best search tips for buying your Spanish property
- It recommends working with local experts as property hunters, and technical advisors, and obtaining an NIE (local tax number).
- To avoid pitfalls, the guide suggests hiring a real estate lawyer for legal aspects.
Our ultimate guide to buying your Spanish property, our 2 minutes video
Would you like to watch this video in your own language? Click at the bottom right of the video on “cc” to get subtitles in your language.
But before going into more details about your own property search in Spain, let’s answer some typical questions asked by our readers:
Is buying property in Spain a good idea?
Spain is one of the top destinations for property investment, for three main reasons: 320 days of sun per year, its quality of life and the property prices are not too expensive compared to other European countries. Here we have listed more than 10 reasons for buying a property in Spain.
Is it a good time to buy property in Spain in 2023?
Property prices were very strong before the financial crisis in 2008, they fell up to 2013-2014 and since 2014 we saw a nice rebound in terms of prices and activity. Have a look at our Spanish real estate outlook for 2023 and don’t miss our Spanish real estate prices quarterly report for more on that.
What do I need to know about buying a property in Spain?
With good experts, you can even buy a property without being physically in Spain. We strongly advise you to work with a property hunter and a technical survey of the property could be interesting as well. Apart from that, you need an NIE (local tax number) and a bank account to be able to buy your Spanish property. Read more on the NIE here: Your ultimate guide to your Spanish NIE number.
What are the pitfalls of buying property in Spain?
It is cheap and easy to buy a property in Spain if you are assisted by local experts speaking your language. To avoid any legal or technical risks, we strongly advise you to hire a real estate lawyer to ensure that all the legal aspects of the property are fine. If you have doubts about the structure or technical aspects of the property, you can ask for a technical survey of the property. Last but not least, a property hunter will help you as well to avoid pitfalls and to make the process easier, quicker and even less expensive.
If you want to read more on that subject: Why do you need independent legal and tax partners for your property acquisition in Spain? and The 7 pitfalls of buying a property in Spain.
Now that the introduction is done, let’s start with our first article on your Spanish property search.
Here is the content we will cover:
How should you start your Spanish property search?
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Why would you buy a property in Spain?
Buying a property abroad most of the time starts with one of those two objectives: either enjoy a better quality of life (buying for yourself) or diversify assets (investment). People looking to enjoy the Spanish lifestyle will either buy a second home, relocate or retire in Spain. Don’t miss our article on working remotely from Spain.
We will first take the view that you purchase your property to enjoy a better quality of life. We will review later the pure investment case to diversify assets. -
What are your objectives?
To be efficient in your property search, don’t hesitate to list your objectives: most of the time, you are not alone to share this new dream and listing your objectives is important to find the property fitting most criteria of all persons involved in the project. Is it a second home? Is it a first home? Is it a house or an apartment? Do you want it close to the beach? Do you want a pool? Do you want a garden? Do you want a terrace?… Each person involved in this project should list his own objectives so you will be able to draw a list common of all the people involved in this project.
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What is your budget?
Of course, your budget will be the first thing to consider before searching for a property: how much can you spend? So, the first step before searching is valuing your assets. After that, you will check with your local banker if they can give you a mortgage for a property in Spain and you will check if you can get a mortgage from a Spanish bank. Read our guide for more on this: Your ultimate guide to your Spanish mortgage. Most of the time, you don’t need a mortgage but it could be wise for two reasons: better diversifications of your assets and it could diminish your taxes if you rent your property.
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The perfect criteria for your future dream home
Buying for yourself?
Second home or First home?
Foreigners looking to buy a property in Spain are usually buying a Spanish second home to enjoy the sun 320 days per year, for the quality of life and for the beaches. For sure, Spain has a lot to offer. Spain is for instance ranked as the healthiest country in the world, in front of Italy and Iceland. There are many reasons for this, to give a few: higher life expectancy at birth, better health care system, Mediterranean diet, and better work-life balance,…
Property criteria
Criteria important for second-home buyers could be split into two main categories: location criteria and property criteria.
Location criteria
- Beach proximity
- Airport proximity
- Golf proximity
- Discover the best new build projects located on a golf resort
- …
Property criteria
- Number of sleeping rooms
- Pool
- Terrace
- Specifics about the property
- …
First home Criteria
If it is a first home, of course, your criteria will be different than if it is a second home.
- Proximity to shopping is more important
- Access to public transportation
- An active neighbourhood 12 months per year and not only in the summer
- School proximity could be important for families
- Proximity to hospitals and other medical facilities could be important for people retiring
Even if you buy your Spanish property as a second or first home and not as an investment property (to rent it), we would advise you to read the next section as a lot of foreigners forget that one day, they will need to sell their property. So, it is important to understand if the property would fit the local market or not.
Buying as a real estate investment?
If you buy your property as an investment, your criteria will be different than if you buy the property for yourself: your goal will be to secure a net return on your investment over your holding period.
Investment criteria
- Amount to invest: make fair estimates of the cost to be invested in the property: the property itself, renovation costs, furniture (if any),…
- Mortgage costs. Read more on that in our detailed article: Find the best Spanish mortgage rates
- Yearly costs related to the property: maintenance costs,
- Costs related to the management of your property: many third parties involved: access, cleaning,…
- Fees related to the rental of your property: rental websites, local partners,…
- Regulations: rental regulations vary depending on the local regulations for local Spanish authorities: short-term rentals are not allowed all the time. Read more on that: Tourist rental in Spain: What is it? Is it legal?
- Taxes related to your property: most of the time you have to pay taxes locally and in your home country. Read more on that: What taxes do you have to pay on your Spanish property?
- Don’t forget that you will need to sell your property later on: try to buy a property that is in demand on the market where you buy: Not too big, not too small, 2 bedrooms, with outside space like a garden or a terrace (even more since Corona), in a not too bad neighbourhood,…
Have a look at one of our earlier articles on that subject: What return will you make on your Spanish property?
The criteria for searching your investment property in Spain won’t be the same as if it was your own property: if you buy a property for yourself, you will look for a property with specific characteristics: sea view, pool,… When you look for an investment property other location and property criteria could come to mind.
Location criteria
As your goal will be either to rent your property to people living in the city or to tourists some specific criteria will be important
- Close to local transportation
- Close to economic activities (Companies, universities, research centres,…)
- Close to tourist activities in the case of tourist rental
Property criteria
- Go for a standard size
- Try to buy a sound property
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How much does it cost to buy a property in Spain?
Depending on the fact that you are buying a resale or a new build, the cost will be different but a good rule of thumb is 14%. Read more on that in our detailed article: The cost of buying a Spanish property.
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How much does it cost to own a property in Spain?
A good estimate is 0.7% as we wrote in our detailed article: The cost of owning a Spanish property.
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How do our partners help you with those first steps?
- We have a local mortgage broker dedicated to getting mortgages for foreigners. Ask for a free mortgage quote.
- Our property hunters are there to assist you to find the perfect property more on that in the 3rd article: “How should you search for your dream property?”
With our team of more than +100 local real estate partners, HowtobuyinSpain helps foreigners to buy real estate in Spain.
The experts from our network are active in all the fields you need:
- Property finders
- B&B
- Spanish property lawyers
- Spanish tax advisors
- Architects
- Money Transfer
- Mortgage
- Holiday rental management
- Insure your Spanish property
- Property survey
- Renovation
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Are you looking for a property lawyer in Spain? Follow the link and get one of our local lawyers. Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Get in contact with one of our 100+ local partners!
Stéphane Senior analyst and strategist at HTBIS
Stéphane, with over 20 years of experience in real estate, finance and entrepreneurship, is the co-founder of www.howtobuyinspain.com. With an extensive network of local partners in Spain, his deep commitment to the real estate sector combined with strong analytical skills and a problem-solving mentality have fueled his success. Constantly eager to learn and passionate about teaching, Stéphane believes in the power of knowledge sharing to master any subject.
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]]>The post Your Ultimate 2023 Guide to Obtaining a Spanish NIE Number – NIE Spain appeared first on How to buy in Spain.
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Your ultimate guide to your Spanish NIE number
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What is the Spanish NIE?
NIE is the abbreviation for “Número de Identificación de Extranjero”, it is a tax ID for foreigners in Spain. You shouldn’t compare it to the Spanish Golden Visa as the Golden Visa allows foreigners to get a residency if they invest in Spain.
Check our one-minute videos on that:
And here is our first Youtube video we did on the same content, you can watch both but the content is the same.
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Why do I need the Spanish NIE number?
- Open a bank account
- Buy a property or insure it
- Get a mortgage
- Sign an internet or a phone contract
- Open a utility contract
- Buy a car or get a driving license
- Sign a work contract and get Social security
- Setup a company
- … and pay taxes
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What do I need to get my Spanish NIE number as a European citizen?
Step 1: Fill in THREE forms in BLOCK CAPITALS “EX – 15 Solicitud de Numero de Identidad de Extranjero NIE y Cert“, per person requiring the NIE. You have to fill it in this Spanish version! But here is a very useful Version where you will find everything translated into English with precise instructions.
Step 2: Fill in ONE Form 790 in BLOCK CAPITALS, here is the electronic version, and here is the Pdf version of the form 790 pre-filled, per person requiring the NIE. This is the document regarding payment instructions to get the NIE.
Step 3: Make a copy of all the pages of your Passport
Step 4: Two recent Passport pictures
Step 5: Document proving why you need a Spanish NIE number, which differs depending on your intentions. In most cases it is one of those:
-going to buy a property in Spain
-job contract from the Spanish company
-self-employed: a company ownership certificate
-students: an acceptance letter from the school
Step 6: Your future address in Spain and proof of health insurance if you are going to live in Spain
Step 7: NIE application fee, less than 15€ (you could need to pay it to the nearest bank in cash)
All those documents must be brought to the nearest Spanish Embassy or Consulate after taking an appointment or the General police office in Spain, read further “How do I get my Spanish NIE number?”
Step 8: For a non-European citizen, proof of legal entry into Spain, like a landing ticket.
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How do I get my Spanish NIE number?
There are two easy ways to get your Spanish NIE: either in your home country at the Spanish consulate or embassy, or in Spain. You can get it and do all the steps alone if you are not in a hurry or you can get it done by a third party if you are busy or in a hurry.
At the Spanish consulate in your own country
We found the most demanded Spanish embassies and consulates here below but if you don’t find your country, here is the main site to find any Spanish embassy or consulate in the world.
Here are the addresses of some Spanish consulates and their Instructions for the NIE:
- Spanish consulates in the United Kingdom and here are the instructions written by the consulate to get the Spanish NIE in the United Kingdom
- Spanish consulates in France and here are the instructions written by the consulate to get the Spanish NIE in France.
- Spanish consulates in Belgium and here are the instructions written by the consulate to get the Spanish NIE in Belgium.
- Spanish consulates in the United States and here are the instructions written by the consulate to get the Spanish NIE in the United States
- Spanish consulates in Canada and here are the instructions written by the consulate to get the Spanish NIE in Canada.
In Spain, at the Directorate-General offices of the Police,
- Check the list of the Directorate General offices of the Police in Spain to get your NIE number
- make sure you don’t need to register online before showing up, it’s the case in Barcelona for instance. Here is the link to book your meeting online (Spanish).
There are some conditions to get it:
the foreigner’s identity number, NIE, must be granted by the Directorate General of the Police if those foreigners are not in Spain in an irregular situation.
Foreign nationals who are related to Spain due to their economic, professional, or social interests may apply personally for the NIE from the Directorate General of the Police, either directly or through the Foreign Nationals’ Offices or Police Stations. In the event that the foreigner is not in Spanish territory at the time of the application, he/she will request the assignment of the NIE from the General Police Headquarters for Foreign Nationals and Borders, through the Spanish Consular Offices abroad. More on that in Spanish on the website of the Spanish police.
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Who can get the NIE Spain number?
- Yourself
- A duly mandated representative
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How long does it take to get my Spanish NIE number?
Between one hour to up to 2 months depending on the way you do it. So plan accordingly!
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How long is it valid?
More than five years ago, the NIE was valid for only a few years but now, your NIE number remains valid forever. So, once you did the work, you can buy a property (if this was the reason why you needed one), even if it is in 5 years.
Take our advice: get your NIE right away!
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Download and print our infographics!
NIE Spain number, everything you need to know
Further reading on the subject
Looking for a qualitative new build property? Check our listings from reliable developers.
Discover the best new build projects in Spain available right now
If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market.
If you are about to buy in Spain, have a keep look at our useful article: The most loved Spanish regions for foreigners’ properties: British, French, German,…
FAQ on Spanish NIE number
How do I get an NIE number in Spain?
To get a NIE, it's easy, fill the forms and get a meeting at your Spanish consulate. If you are not available, someone else can go do it for you. Read our step by step guide for more.
How long does a Spanish NIE number last?
NIE numbers are valid forever. So, don't wait, ask it now as it could take between 1 and 2 months.
How much is an NIE number in Spain?
The actual cost is less than 15€. Pay attention, you need to pay this in Cash at some consulates.
What documents do I need for NIE in Spain?
We have listed all the documents you need in our article: you need to fill 2 forms (the first one 3 times), you need a copy of your passport, two recent pictures, and a document proving why you need it,... Check our full list on our site
Looking for a property lawyer in Spain? Follow the link and get one of our local lawyers.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partners!
The post Your Ultimate 2023 Guide to Obtaining a Spanish NIE Number – NIE Spain appeared first on How to buy in Spain.
]]>The post Buying a property in Spain: Is a Spanish notary enough? appeared first on How to buy in Spain.
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Buying a property in Spain: Is a Spanish notary enough?
Why an independent lawyer is strongly advised?
This article is the second part of our main paper: “Your ultimate legal checklist of your Spanish property.” Have a look at the bottom of this article for the other parts of this article.
The Spanish notary will prepare the contract and issue the public deeds. He will make sure that the seller and the buyer are correctly authenticated and that the buyer is paying the purchasing price to the seller. Remember what, Alejandro Ruiz-Ayúcar Seifert, Notary of the Notarial College of Madrid wrote: Why buy a property in Spain? The view of a Spanish notary
We are very pleased to share the insights of our local lawyer in Valencia, Sophie explaining what are the added values of an independent lawyer.
“In Spain, the role of the Notary is completely different from the one in other European countries. Although Spanish Notaries also have a duty to advise and inform their clients, their formal obligations are limited and their investigations are often limited to obtaining an extract from the property register.”
Sophie explains further:
“All other steps such as urban and fiscal audits, obtaining certificates of operation of facilities, soil contamination or the lack of co-ownership debts, being an approach left to the goodwill of the parties.”
The legal rights for the property buyers should be detailed in the contracts.
Often, the standard models of deeds of sale of notaries provide a series of waivers to the few rights of the buyer, such as the right of obtaining the certificate of absence of tax debts, the certificate of the president of the community of co-owners or the coordination between the data in the property register with the data in the cadastre and the real data. The only document on which the notary remains firm is the energy certificate since if this certificate is not attached to the act, fines of around 6,000 euros can be imposed both on the buyer and the seller.
This energy certificate, whose qualification often oscillates between E and G is of little importance compared to all the other guarantees which should benefit the buyer.
If you don’t want to protect yourself, you can buy a property in one day in Spain
In fact, to buy in Spain, if you have a NIE (foreigner identification number, read more on that here: Your ultimate guide to your Spain NIE number – NIE Spain) and a Spanish bank check, you could go to the Notary to sign the transaction almost the day of your first visit of the building.
To buy in Spain is very easy. What is not, is knowing what you buy.
As Sophie sums up:
“ it is in this context that the role of the lawyer is essential, not only to collect the documents that will allow you to sign and obtain the registration of the property at your name in the property registry (management procedures) but especially to obtain the documents to which the law does not give you obligatorily access before the sale but whose study is essential in order to know the ins and outs of your purchase (audit procedures).”
Your lawyer will help you to know the ins and outs of your Spanish property purchase
For example: the general assemblies of co-ownership of the last three years in order to check if Extraordinary works are not expected in the near future in the building, the statutes of the co-ownership, energy supply invoices over 12 months to verify that the building is well connected to these services, that the contracts are adequate and the normal consumption, occupancy license to be sure that the property meets the conditions of habitability, the report of stability of the building (report IEE) for buildings of more than 50 years of age in the Valencian community, the urban planning report confirming that your building is not the subject of a land-use plan or is not located in the maritime-terrestrial area that is part of the public domain, etc., etc.
Often, when the lawyer asks all of these documents to real estate agents, they will answer that “all these documents are not necessary to sign”. They are right, as stated above, a NIE and a check are enough to sign, but not to know what you are buying. The lawyer must therefore fight and fight to obtain this essential information for the buyer and to which, for reasons including data protection, he does not have access without the cooperation of the agent or the seller.
Many issues could happen when you buy a property if you don’t do your due diligence properly
Here are some real cases witnessed by Sophie:
- the purchase by a non-resident of a qualified apartment VPO or “Vivienda de Protección Official” as a second residence, while these apartments VPO must be occupied (among other conditions) in principal residence only
- the purchase of a house located in a green space where it is forbidden to build and which can, therefore, be the subject of only small conservation works until it can be destroyed to set up the green space; the purchase of a house in a residential development (urbanization) that is not completed (developer in bankruptcy) and on which lays latent urban charges to complete the installations (sidewalks, power lines, sewers …) that do not appear on the simple note “Nota Simple”;
- purchase of a property that has been acquired by succession or purchase within less than 5 years for a value lower than the cadastral value or the tax value, resulting in a risk of tax requalification that the building will bear, even after resale (until the expiry of the 5 years period);
- the purchase of an apartment whose communal swimming pool must be partially destroyed because it encroaches on the maritime public domain …
That is why your Spanish lawyer will work for you hand in hand with the Spanish notary to make everything watertight.
Your lawyer will make the communication of that information contractually mandatory
These situations can in principle be avoided by examining all the documents concerning the property in a magnifying glass, even if they are not “mandatory”, hence the interest of making the communication of this information contractually mandatory, and to provide the list of these documents from the signing of the contract of “reservation” (which is actually a firm offer from you which, when accepted, will form a private contract of purchase for all effects, and not a “simple reservation”, so be sure to write it very carefully).
Thank you again to Sophie, our legal partner in the region of Valencia, for her insights. Find Sophie and all some of our most active partners and team members in our team secti
This article: “Part I. Buying a property in Spain: Is a Spanish Notary enough? Why an independent lawyer is strongly advised?” is part of an extensive article covering the legal and tax aspects of a property acquisition in Spain:
Introductory paper: Why do you need independent legal and tax partners for your property acquisition in Spain?
Part I. Buying a property in Spain: Is a Spanish Notary enough? Why is an independent Spanish lawyer strongly advised?
Part II. Buying a property in Spain as a foreigner: Are you allowed to buy a property in Spain as a foreigner? Do you need a Visa? Who is buying? How do you finance?
Part III. Legal due diligence on your Spanish property
Part IV. Tax aspects related to your Spanish property: acquisition, ownership and sale of your Spanish property
Part V. Inheritance, Estate Planning and Granting a Will in Spain
For easiness of reading, it is split into five different articles: they could be read one after the other or separately.
Read more: Buy a property in Spain? The 9 steps to your Spanish property.
Looking for a real estate lawyer in Spain? Follow the link and get one of our local lawyer.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partner!
Stéphane Senior analyst and strategist at HTBIS
Stéphane, with over 20 years of experience in real estate, finance and entrepreneurship, is the co-founder of www.howtobuyinspain.com. With an extensive network of local partners in Spain, his deep commitment to the real estate sector combined with strong analytical skills and a problem-solving mentality have fueled his success. Constantly eager to learn and passionate about teaching, Stéphane believes in the power of knowledge sharing to master any subject.
The post Buying a property in Spain: Is a Spanish notary enough? appeared first on How to buy in Spain.
]]>The post What is the real cost of owning your Spanish property in 2023? appeared first on How to buy in Spain.
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What is the real cost of owning your Spanish property as a non-resident?
Congratulation for your purchase, now let’s check the annual costs of owning your property.
You’ll have those divided into five different groups: Taxes, Insurance, Utilities (Electricity, Water, Gaz, Television, Internet, Telephone), the charges of your own property and eventually Community Charges.
Let’s have a look at a concrete example: a two bedroom apartment in Barcelona of 100 m2 with a market price in 2022 of 440.000€ and a “valor Catastral” of 100,000€. We assume a rental value of 18.000€.
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Taxes
If you want to have a detailed view from our experts on this subject, have a look at our article: What taxes do you have to pay on your Spanish property?
Here is a quick summary:
a. Local Tax: IBI, “Impuesto sobre Bienes Inmuebles“:
What is it? A local tax on any Spanish property.
Who has to pay for it? Any owner of a Spanish property, local or foreigner.
How do you know? You’ll get a letter after June of any year but some local authorities don’t send it. You owe this tax
Who is the beneficiary? The tax is payable to your local Town Hall. Those are for infrastructure, waste collection,…
If you pay too late, you will have to pay a penalty.
Where can I pay it? Your local Town Hall, a few of them are available online.
Our tip: A few of them allow domiciliation of payment: very easy, they will take the amount from your account every year. A very good solution if you are living abroad. Make sure your account balance is sufficient: some banks would refuse to pay or would charge you a high interest if the account would fall into negative territory.
How is the Tax Calculated? The IBI is based on the “Valor Catastral“. The “Valor Cadastral” can be legally adjusted if needed by any Town Hall.
Our tip: by working with a lawyer, he will make sure that the previous owner paid for it, if it is not the case, you’ll have to pay for him!
What if your property is empty? You owe the tax!
Our tip: After buying a property, register your property with the Town Hall within two months. Take all the official documents with you. Most of the time, your lawyer will do this for you.
If you forgot it, your local town hall could recoup the amounts due for the last 5 years + penalties… So, now you know!
The IBI for the apartment in Barcelona is under 0.6% of the “Valor Catastral“: i.e. 360€
b. State Tax: You are renting it. You are not renting it… Modelo 210 – Form 210
A. You are renting out your apartment => Quarterly filling, before the 15th of the month following the end of the quarter.
The State tax for the apartment in Barcelona is 19% of the “Rental Value“: i.e. 3648€ on an annual basis and 912€ on a quarterly basis.
Our Tip: you have items that could reduce this amount, check with (y)our lawyer.
B. Your apartment is not rented => Yearly filling
The State tax for the apartment in Barcelona is under 0.2% of the “Valor Catastral“: i.e. 200€
Where can you find the Spanish form 210 directly in English?
Where can you find the official information for filing your Spanish Form 210 in English?
Have a look at the help guide written in English by the Spanish Authorities.
Our Tip: Pay attention, if you bought the property with someone else (spouse, kids,…), everybody needs to do one filling for the taxes!
Our Tip: Take advantage of our network and get your filling done by someone on the ground.
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Insurance
The insurance should be around 0.05% of the price of your property.
The insurance for the apartment in Barcelona is under 250€.
Our Tip: Many insurance brokers in Spain speak foreign languages. Ask a quote from our home insurance partner in Spain.
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Utilities
If your apartment in Barcelona is empty, you’ll have a few charges just to have accounts open and running:
+/- 15€ / month for water
+/- 20€ / month for electricity
+/- 6€ / month for gas
For a total of 41€ / month if your apartment in Barcelona is not rented.
If your apartment in Barcelona is rented, charges may increase up to 150€ / month. With inflation rising since 2021, you should expect those costs to increase even more in the future.
Our Tip: If your Gas meter needs to be reopened, you’ll have to get a technician to certify that your installation standards is fine. Count about 150€ for this.
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Community Charges
This charge depends on the property you bought:
- Is there a lift in the building?
- Is the property new? Does it need more or less of maintenance?
- Are many properties empty?
- Do you have a swimming pool?
- How often is the property cleaned?
For your apartment in Barcelona count between 50€ and 100€ per month.
Our Tip: Ask for the last Assembly documents before buying. Your lawyer will do this in general. You will get a much better picture on those costs and on the costs carried on the property in the past or to be done in the future.
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Charges of your own property
- Do you have a private garden?
- Do you have your own private pool?
- The paintwork needs doing?
- Do you have a mortgage? Check our paper we wrote on that to find out what is your monthly mortgage payment: What is the cost of your Spanish Mortgage? Your ultimate Mortgage calculator
To sum up: 0.8% per year:
- 0.15% Local tax,
- 0.05% National tax(not rented ),
- 0.05% Insurance,
- 0.1% Utilities (empty),
- 0.3% Community charges,
- 0.1% Property charges
Do you want to be sure of the cost of buying a Spanish property? Read the news we wrote on this. Last but not least another interesting paper is: cost of living in Spain vs any country in the world.
All those information are from reliable sources. We advise you to check those with your fiscal and legal advisor in Spain in order to get all those costs up to date and adjusted to your specific situation. Find your Spanish property lawyer here.
Do you want to start searching immediately?
Discover the best new build projects in Spain available right now
If you don’t know where to buy, this general article on the Spanish Real Estate market could be very useful: Everything you ever wanted to know about the top 20 Spanish real estate markets
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This infographic could help you before buying your new property in Spain.
Don’t try to do it alone, you think you will save money, but you will WASTE money
Stéphane Senior analyst and strategist at HTBIS
Stéphane, with over 20 years of experience in real estate, finance and entrepreneurship, is the co-founder of www.howtobuyinspain.com. With an extensive network of local partners in Spain, his deep commitment to the real estate sector combined with strong analytical skills and a problem-solving mentality have fueled his success. Constantly eager to learn and passionate about teaching, Stéphane believes in the power of knowledge sharing to master any subject.
Our FAQ on Cost of buying a house in Spain
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The legal checklist of your Spanish property
Why do you need a Spanish lawyer or tax adviser?
Here are some of the main works carried out by your Spanish lawyer before the purchase of your dream property in Spain.
You should pay attention: the laws are changing all the time and are specific for each of the Spanish autonomous regions. That is why at howtobuyinSpain.com we work only with local independent lawyers who specialise in Spanish land laws and Spanish Tax laws. Of course, our local lawyers speak many languages and are used to working with foreigners.
This article was written with the help of many of our local lawyers. The only goal of this article is to help you to understand this subject but we advise you to meet a lawyer to discuss this further. If you don’t have one, howtobuyinSpain.com works with many partners all over Spain, don’t hesitate to ask us for help.
Of course we all dream of those beaches…
But before that, stay with your feet on the ground.
Independent lawyers and tax experts: Why do you need an independent local legal partner?
Independent means that they work to protect your interest, not the one of the real estate agent or the one of the developer.
Buying a property in Spain has some costs, a good start on this subject is the article we wrote: What is the real cost of buying your Spanish Property?
Of course, owning a property in Spain has some costs as well, we wrote another article to help you guess what will be your yearly running costs What is the real cost of owning your Spanish property?
Before buying your property, it is important to know your motivations, to know where you are searching, what are your criteria’s, and to do your market research,… Have a quick look at our checklist: Our top 10 pieces of advice for buying your property in Spain, that could be helpful to start your property search in Spain efficiently.
Buying a property in Spain is easy as we described here The 9 steps to your Spanish Property but there could be many pitfalls.
In this article, we will explain to you why you shouldn’t acquire a property in Spain without the assistance of a local independent lawyer.
The structure of this extensive article covers the legal and tax aspects of property acquisition in Spain:
This introductory paper: Why do you need independent legal and tax partners for your property acquisition in Spain?
Part I. Buying a property in Spain: Is a Spanish Notary enough?
- Why an independent lawyer is strongly advised?
- Many issues could happen when you buy a property if you don’t do your due diligence properly
- That is why your Spanish lawyer will work for you hand in hand with the Spanish notary to make everything watertight.
Part II. Buying a property in Spain as a foreigner
- The practical aspects linked to the purchase of your Spanish property as a foreigner.
- Are you allowed to buy a property in Spain as a foreigner?
- Who is buying the Spanish property?
- What are the impacts of your matrimonial regime if you are buying a property in Spain?
- What documents should you provide if you are buying a property in Spain?
- How do you finance your Spanish property purchase? Do you need a mortgage?
Part III. Legal due diligence on your Spanish property
- Legal due diligence checklist for a Resale property in Spain
- How do you settle the IBI tax, “Impuesto sobre Bienes Inmuebles”, between the seller and the buyer?
- Pay attention to the pre-emptive rights of the administration
- Legal due diligence checklist for a new build (or “off Plan”) property purchase in Spain
- Once the construction has been finished a few items should be checked
Part IV. Tax aspects related to your Spanish property
Taxes related to:
- the acquisition of a property (new build or resale),
- the ownership of a property, and
- the sale of the property.
Part V. Inheritance, Estate Planning and Granting a Will in Spain
- The Spanish last will and testament will make the process of succession and inheritance over your Spanish assets quicker, easier and less costly.
For the easiness of reading, it is split into five different articles: they could be read one after the other or separately.
Looking for a real estate lawyer in Spain? Follow the link and get one of our local lawyers.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partners!
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Are you buying your dream property in Spain?
Since we started to invest in Spain in 2012, we have built a network of local real estate experts in Spain and became the one stop shop solution for foreigners looking for help to buy a property in Spain.
Foreigners ourselves, we have built this network first to find the solution for ourselves… then we wanted to share our network and our experience with other foreigners.
In two years, our readership grew to more than 140,000 and are coming from more than 210 countries around the world! We are really pleased with that.
It is cheap and easy to buy a property in Spain if you are assisted by the local experts speaking your language. Check our interesting articles:
- Why do you need independent legal and tax partners for your property acquisition in Spain?
- 6 reasons why a personal real estate shopper in Spain will be very helpful for your property search
- Our top 10 pieces of advice for buying your property in Spain
- Top 8 tips for not wasting money when you buy in Spain
The experts from our network are active in ten fields:
- Property finders
- B&B
- Lawyers
- Tax
- Architects
- Money Transfer
- Mortgage
- Insure your Spanish property
- Property survey
- Renovation
We get many requests flowing in every week as 130.000 foreigners bought a property in Spain in 2022 and the growth is continuing.
Check the feedback we have received lately from our customers:
“Thank you for your help.”
“Your website is really a very interesting source of information.”
“We found the help we wanted for purchasing our property.”
“Thanks to your website, I got the ins and outs of buying a property in Spain.”
How did we help our customers during the last months?
Our activity is strong and we can’t update this page regularly as we have to manage the requests coming in. We receive the most requests from England but actually they really come from all over the world. This is why we love it so much.
What are the services people are looking for? Property finders in Spain, mortgage financing thanks to our partnership with a mortgage broker negotiating with all the biggest banks in Spain, legal and tax advice and currency hedging. We started our partnership for your holiday home insurance in Spain in 2019. Last but not least, we have a survey partner if you need any technical review of a property before buying it.
Here is a quick overview of some requests we got in during the last months:
We got close to 300 Requests in 2022!
Here are a few samples of how we helped our customers in 2022:
- A couple from America is looking to invest in Valencia or Barcelona and find their future retirement home
Region: Valencia / Barcelona
Requests:
-Get in touch with our property hunter in the region of Valencia and our property hunter in the region of Barcelona
–Find a lawyer in Valencia and a property lawyer in Barcelona speaking English to assist with the purchase of the property in Spain. May I buy a property in Spain?
–How to finance my Spanish property? as I want to keep my current property for 5 more years before retiring.
–How to hedge currency risk while I purchase my property in Spain as I am American?
- A young manager from Soudan is looking for a new life in Spain.
Region: no precise idea: Valencia / Barcelona ?
Requests:
–How to get a Golden Visa for Spain?
–Find a lawyer in Valencia and a property lawyer in Barcelona speaking English to assist with my Visa application the purchase of the property in Spain
- A couple from Belgium is looking to buy a family house in the Costa Brava
Region: Costa Brava
Requests:
-Get in touch with our property hunter in the Costa Brava region
- A couple from South Africa is looking to invest in Barcelona and find their future home
Region: Barcelona
Requests:
-Get in touch with our property hunter in the region of Barcelona
– Find a property lawyer in Barcelona speaking English to assist with the purchase of the property in Spain.
– A tax adviser in Barcelona to review my tax situation with the property
–How to finance my Spanish property? as I want to keep my current property for 5 more years before retiring.
–How to hedge currency risk while I purchase my property in Spain as I am Not European?
- A Dutch couple is looking to invest in Valencia for a holiday home close to the beach
Region: Valencia
Requests:
-Get in touch with our property hunter in the region of Valencia
–Find a lawyer in Valencia speaking English to assist with the purchase of the property in Spain.
–How to finance my Spanish property?
- A Luxembourg real estate investor is looking to invest in Madrid for rental income.
Region: Madrid
Requests:
-Get in touch with our property hunter in the region of Madrid.
-Get in contact with a local partner for a mortgage in Spain, get a better understanding of the minimum down payment needed to buy a property in Spain.
Example of customers’ other requests:
- A customer from Belgium found his holiday home in Andalusia and wanted to make an official bid with a lawyer
Our tip: never make an offer or sign before your lawyer saw the offer.
Region: Andalusia, Costa de Almeria
Requests:
-Get in touch with our property lawyer in the region of Costa de Almeria
-Check all the paperwork
- A couple from America looking to retire in the Valencian Community in 2019
Region: Valencia, Valencian Community
Requests:
-Get in touch with our property hunter in the region of Valencia
–Find a lawyer in Valencia speaking English to assist with the purchase of the property in Spain.
–How to get a mortgage in Spain as a foreigner?
–How to hedge currency risk while I purchase my property in Spain?
- An Australian couple looking to get the Golden Visa in Spain and buy a property in Barcelona
Region: Barcelona, Catalonia
Requests:
-Get in touch with our property hunter in Barcelona
–Find a lawyer to assist with the property purchase and with the Visa procedure.
–Money Transfer/currency risk: the purchaser needs to exchange Australia Dollars into Euros
- An English couple looking to know how to proceed to get a mortgage in the Valencian Community
Region: Valencia, Valencian Community
Requests:
-Understand how to get a mortgage in Spain as a foreigner
- A customer from England toured Spain during a full month looking for a horse-property to retire in Spain and found it in the region of Tarragona.
Region: Tarragona, Costa Daurada
Requests:
-Get in touch with our property lawyer in the region of Tarragona
-Find an architect in the Costa Daurada for assisting with a first survey of the property
–Money Transfer and currency hedging: the purchaser is from England and needs to exchange Sterlings into Euros
- A customer from Denmark is looking to buy a luxury property in Barcelona as a second home
Region: Barcelona, Costa de Barcelona
Requests:
-Get in touch with our property hunter in Barcelona
-Learn more about the legal and tax aspects of purchasing a property in Spain as a foreigner
- A Saudi investor had a budget to invest in a property in Madrid for rental income.
Region: Madrid
Requests:
-Get in touch with our property hunter in the region of Madrid.
-Get in contact with a local partner for a mortgage in Spain, get a better understanding of the minimum down payment needed to buy a property in Spain.
- A Dutch looking to retire in Alicante
Region: Alicante, Costa Blanca
Requests:
-Get in touch with our local property lawyer in the region of Denia
-Get in contact with a local partner for a mortgage, get a better understanding of the minimum down payment needed to buy a property in Spain.
- An institutional investor looking to invest in Madrid and Barcelona
- A Dutch looking to retire in Barcelona
Region: Barcelona, Costa de Barcelona
Requests:
-Get in touch with our local property lawyer in the region of Barcelona
-Understand the aspects regarding the Spanish NIE, why do I need it as a foreigner?
- A Brittish looking to retire in 6 months in Spain
Region: Many regions
Requests:
-Where can I find the most for my money?
-Rent my property 6 months per year to get some revenue
- A customer from Switzerland looking to buy in Andalusia
Region: Andalusia, Mijas
Requests:
-Get in touch with our local property lawyer in Andalusia
-Get in touch with our property hunter in the Andalusia
-Get in contact with a local partner in Spain for a mortgage
- Another customer from Switzerland looking to buy a second home in the old city centre of Girona
Region: Girona, Costa Brava
Request:
-Get in touch with our property hunter in the Costa Brava
So don’t hesitate, ask us, ask our property experts in Spain.
5 Reasons why you should work with our experts?
- We work with the best local professionals having the highest standards and speaking your language!
- We do the follow-up with our customers. We want to be sure that they are happy with the service provided.
- We ask our partners to provide the best service at a competitive price.
- Our partners are part of our network and want to stay partners with us: they will continue to do everything to remain part of our network.
- We confirm every year if the partners remain members of our network.
Looking for a property lawyer in Spain? Follow the link and get one of our local lawyer.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partner!
Senior analyst and strategist at HTBIS
Check the full HTBIS team here
FOLLOW US
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Congratulations, you found your Spanish dream property!
What is the cost of buying a property in Spain?
First question is:
- Is it a new-build property?
- Is it a resale?
Depending on your answer the cost will be slightly different but a good rule of thumb is 14%.
-
The cost of buying a New-build property in Spain: +/- 14%
- VAT =10%
- Property registration fees = 1.5%
- Lawyer between 1 and 2%:
- Other costs: Notary, stamps,…
The cost of buying a new build property in Spain
-
The cost of buying a Resale property in Spain: will be between 10 and 14%
- Transfer Tax = 6 to 10% at the general tax rate (but you have reduced rates in certain cases). This amount depends on which Spanish region this property is located.
- Property registration fees = 1.5%
- Lawyer between 1 and 2%
- Other costs: Notary, stamps,…
The cost of buying a resale property in Spain
Don’t miss What is the legal due diligence for your Spanish property?
Do you need a property lawyer or a tax advisor to assist you in Spain? Find a Spanish property lawyer in our network.
-
Other costs to take into account
- Banking costs: Usually a percentage of the amount wired + cost of holding an account
- This could be very important if you don’t have a Euro account and need to convert your currency like Pound, Dolar, Yuan, Shekel, Ruble,… up to 3%
- Our Tip: You have companies specialized in wiring funds internationally working with segregated accounts at the major international banks:
1. You can lock a currency level
=> you will know the commission BEFORE wiring the money
=> you will know the level at which you will convert your currency in Euros BEFORE wiring the money
=> you will know the exact amount you need to wire in your local currency BEFORE wiring the funds
2. You wire the money in your currency
3. The company will wire the money in Euros in Spain on your Spanish account (Don’t forget your NIE, read our earlier paper on that) , your lawyer account,…
- Mortgage costs:
- Bank valuation of the property = +/- 750€
- Mortgage deed = +/- 750€
- Banking costs: Usually a percentage of the amount wired + cost of holding an account
If you want to check the monthly cost of your mortgage, or what is your purchasing power for a Spanish property, check our ultimate mortgage calculator!
Related Your definitive guide to your Spanish mortgage. How to get the best rates?
Do you want to find the best Spanish mortgage rates? Fill this quick form and ask our partner for a quote
- Real Estate agent fee: Here is the good news you were waiting for: the seller is paying this one 😉 in general.
Before buying, you want to know what is the annual cost of owning a property in Spain? Read our paper on this subject.
All those information are from reliable sources. We advise you to check those with your fiscal and legal agent in order to get all those costs up to date and adjusted to your specific situation.
Is the cost of living in Spain higher than in your home country?
Have a look at our detailed article and study on the subject.
If you are living in UK, here is our dedicated article: Cost of living in Spain vs UK.
Have a look at our detailed property buyers guides custom made for any nationality
Here are our FREE pdf property buyers’ guides written for all the foreign nationalities looking to buy in Spain: Click on your country flag, you will find your pdf report at the end of each article. Get most of our tips there.
Do you want to start searching immediately?
Discover the best new build projects in Spain available right now
Don’t know where to buy? Start with our general article: Everything you ever wanted to know about the top 20 Spanish real estate markets
1. Best Professionals 2. Follow up 3. Competitive pricing 4. Partners 5. Qualitative Check
Get your insights right to your mailbox? Register for our newsletter!
Our Tip: Don’t forget all our checklists before buying your property:
Finally, if you want more, check our very useful infographic: The 9 legal steps to your Spanish property
FAQ on the Cost of buying a property in Spain
Is buying property in Spain a good idea?
Spain is the number one country in Europe for holidays. It is 10% cheaper than Europe. Of course real estate is cheap as well and you have 320 days of sun. Read our article: 10+ reasons for buying a property in Spain.
How much is property purchase tax in Spain?
The cost of buying a property in Spain is between 10 and 15% depending on if it is a resale or a new build and where the property is located. Read our article for more on that.
Can I get residency in Spain if I buy a house?
In order to get residency in Spain, there are certain conditions attached to it (income, activity, nationality,...) So if you want to live in Spain and work in Spain, check with a lawyer. The Golden Visa could be the way to go as well. Read our article on that.
Do I need a Spanish bank account to buy a property in Spain?
The obvious answer is yes. You want to finance a property in Spain, you will have taxes, utilities, ... Get it right away. In order to open your bank account, you will need a NIE, see our news on that.
Looking for a property lawyer in Spain? Follow the link and get one of our local lawyer.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partner!
Senior analyst and strategist at HTBIS
Check the full HTBIS team here
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A low-maintenance rental property in Madrid
Profile of the buyer
a single mother from France, residing in Madrid
Goal of this real estate investment?
She wanted to invest her savings in the real estate market in Madrid, but with a full-time job and a baby she had neither the time nor the knowledge to make a safe, profitable purchase.
Her goal was an apartment she could rent out long-term that would give her the least amount of trouble and would gain value with time. Hands-off management and long-term capital gains were more important than obtaining the highest possible rental yield.
A small budget for this buy-to-let property in Madrid
The total investment (including taxes, fees, renovations, etc.) budget for this apartment was 200,000 to 220,000€ with no mortgage.
This budget is really on the low end of the current market in Madrid.
In which neighbourhood should you buy an investment property in Madrid?
We considered and analysed several neighbourhoods, but due to a combination of proximity to her home, property prices and trends, plus profitability, we focused mainly on the Puerta del Ángel neighbourhood. It’s an area that’s very close to the centre, but just outside of the M30 ring road.
The perfect investment property in Madrid?
After a month and a half of viewing and analysing properties, we found a completely off-market apartment through personal contacts. The apartment had a perfect combination of attractive features for a rental, a superb location right next to the subway, and the right price. The only caveat was that it needed to be upgraded and modernised. The client didn’t have the time or desire to deal with renovations, so we took care of this part as well, requesting and comparing budgets from contractors, and supervising the works. In the end, we handed her the apartment with the tenant already selected and a rental price above expectations.
Let’s check the investment return
- Total investment was 223,500€,
- The rental price was 900€ /month.
- Gross ROI 4.83%, net ROI 4.15%.
- Duration of the project: from start to finish it took us 5 months.
Would renovation add any value?
In this case, there were minor renovation works. If you are able to buy a property at a discount price because it needs some renovation, most of the time, it will be the best investment you could do as renovation works in Spain are not too expensive. Our property hunters do manage those works and we do have teams of renovation workers nearly in all major cities in Spain.
Is the Madrid property market too expensive in 2022?
Madrid offers some of the best returns in Europe. The entry price is extremely low, and average returns on Madrid property investment are some of the best in Europe- particularly among leading capital cities.
Are real estate returns interesting in Madrid vs. other major European cities?
According to Deloitte. Check the rental Yields for the major European Cities, Madrid and Barcelona have rental yields close to 5%.
If you want to read more on real estate investments in Spain, read our article we wrote a few weeks ago: What is the return on your Spanish property investment?… Above 10% according to the bank of Spain (as of May 2022).
Madrid is the 3rd biggest city in Europe in terms of size…
Although Madrid property prices rose in 2017, there is still much room for appreciation. Prices are still 54% off their peaks of mid-2007.
Madrid is the 11th City in Europe in terms of price/m²
But check on the above chart, the price/m² in London are 16.500€/m² and 12.500€/m² in Paris… while Madrid is at 3.500€/m².
Yes, less than one-quarter and one-third of the price of London and Paris. Period.
At the same time, rents are about 50% lower at 14€/m² vs 28-29 €/m² in Paris and London…
Madrid has a rental yield 2x bigger than other major European cities
Now, yes, you see why the return in Madrid is nearly twice as high as the one in Paris and London. Do you think that the price risk is higher in Madrid than in Paris and London?
Source: Deloitte property Index 2021, Overview of the European Residential Market
About Agnes and her team, our Property hunter in Madrid.
We help clients locate, purchase and renovate property in Madrid. Get in touch today if you’d like to learn how we can help you invest in Madrid.
Send your request to our property hunter in Madrid, or follow the link if you are looking for a property hunter anywhere else in Spain. Ask us directly and benefit from the strength of our network!
Check the full profile of Agnes, our local partner, Property Hunter in Madrid
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Tourist rental – Part I
What is it?
In recent years the emergence and subsequent exponential boom of a new type of private accommodation for tourism, popularly known as “tourist rental”, has taken place in Spain. There are many owners and tenants who, through digital intermediation platforms, decide, respectively, to lease and sublet their apartment to foreigners for short periods of time. This is due to the economic-financial logic of the market: the purchasing power of the average foreign investor is currently greater than that of the average Spanish investor. Therefore, in the same way that real estate sales in Spain have benefited thanks to the increase of foreign investors, entrepreneurs in the housing leasing sector have tried to maximize their benefits by giving priority to the time factor and focusing
their services towards a profile of potential customer with greater purchasing power.
Is this activity legal?
Obviously yes! As long as all the requirements established by current legal regulations are met. In Spain, this regulation is assigned to the Autonomous Communities, so it is possible to find differences between points in the territory. For example, in Catalonia, it is necessary to previously communicate the start of the activity to the competent City Council to obtain the so-called “tourist license” that enables its development.
¿Do you have tax implications?
Of course. Any provision of services is a source of income for the provider (either in the IRPF if he is a tax resident in Spain, or in the IRNR if he is not) and, as such, is subject to taxes that tax his consumption (in Spain , VAT, or ITPAJD).
But before delving into it, which we reserve for our next article, it is necessary to differentiate the concept of tourist rental from both the rental of traditional housing and the accommodation services of the hotel industry, since its tax treatment is different. We will only refer to the first one in this article.
Tourist rental Vs Traditional housing rental.
As we said in the beginning, one of the main characteristics of the tourist rental is the temporary transfer of use of an apartment for short periods of time. On the contrary, the rental of traditional housing pursues a different objective, which is to satisfy the permanent need of housing of the recipient (¡we all need a place to call home!).
Tourist rental Vs Hosting services.
Here the differences are more subtle and difficult to appreciate; but while the first is mainly limited to the transfer of temporary use of a physical space along with a series of basic services, the second is characterized by offering complementary services, which are rather characteristic of the hotel industry.
Let’s see some examples:
“Basic” services typical of tourist rental:
• Cleaning and change of bed and bath linen provided at the entry and exit of the period contracted by each tenant
• Cleaning service of the common areas of the building (portal, stairs, elevator) as well as the urbanization (sidewalks and streets, green areas) in which the rented apartment is located
• Technical assistance and maintenance services for possible repairs of plumbing, electricity, glassware, blinds, locks and appliances
“Complementary” services typical of the hotel sector:
• Reception and permanent and continuous customer service in a space intended for this purpose
• Cleaning services and change of periodic bed and bath linen (not only at the entrance and exit of the client)
• Food and catering services, laundry, luggage storage, press, reservations, etc.
Conclusion
If you were interested in investing in the Spanish real estate market, you already have one more reason to do so: the possibility of carrying out the tourist rental activity, which will allow you to maximize the return on your investment during your tenure, and will be fully compatible with the private use of your apartment when you wish.
In our next article, we will analyse in more detail the fiscal implications of the development of the tourist rental.
This article is written by one of our independent partners in Spain, Maite, who is one of our Fiscal partners in Catalonia. Check her profile.
Looking for a property lawyer in Spain? Follow the link and get one of our local lawyer.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partner!
Maite
FOLLOW US
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The limitation of the rental price on housing in Catalonia
In the last reform of the Law for Urban Rents, on May 2019, in its Second Additional Provision, in relation to the rental price index, it was stated that the Autonomous Communities could define their own reference index in a specific way and adapted to their territory, for the exercise of their powers and for the purpose of designing their own public housing policies and programs.
Consequently, the Generalitat of Catalonia has approved a Decree Law 9/2019 of May 21, published in the DOGC on 05/23/2019, of urgent measures regarding the containment of income in housing lease contracts, in order to limit the price of housing rents.
How does it work?
First of all, before a limitation of the rental prices of housing rents can be established, the areas or areas of “tense market” housing (these are the municipalities or the areas of municipalities where the supply is at risk of insufficient rental housing in affordable conditions); for this, various aspects must be stated:
- as if the growth of the rental price and its cost in the family budget is clearly higher than the average in Catalonia;
- as if that there is a disproportion between the increase in the population and the number of available rental homes, or
- as if the cost of rentals increases above the CPI of the affected area.
Once the “tense market” zone or area has been fixed, the rent of the housing lease contracts may only exceed the Reference Index of the Rental Prices by 10%. An additional increase of 5% can be allowed due to special characteristics of the house (views, community areas equipped with a garden, swimming pool, etc …).
Newly built?
Likewise, newly built and fully rehabilitated homes may be rented at 20% above those established by the Reference Index, but only for 5 years after the completion of the works.
The rent review of these leases can only be carried out if expressly agreed, and with reference to the annual variation of the competitiveness guarantee index.
The Sagrada Familia, one of the many wonderful site to see in Barcelona
Already rented?
In homes that were already rented, and when the rent was higher than the price set by the reference index that should be applied, the last rent of the previous contract can be set as the initial rent of a new contract (producing, as evidence, the amount of the last receipt).
If the lessor collects rents above the limits established, the lessee will have the right to recover the difference between the legal limit and the rent he paid, with interest. It may be required by Courts, but the Department of Justice will promote mediation and other alternative dispute resolutions systems.
As a transitional regime, it is established that leases concluded prior to the entry into force of the Decree will continue to be governed by previous legislation. In case of renewal that involves extending the duration or modification of the rent, after the declaration of the area in which the house is located as a tense market, the provisions of these regulations shall be applied.
This Legislative Decree entered into force the day after its publication, that is, on May 24, 2019.
Morning natural lights in the master work of Gaudi: the Sagrada Familia
Different sectors have already objected this regulation, real estate professionals, owners and social organizations (Sindicat de Llogaters, Tenant Association, etc.) and all agree in their rejection for different reasons, but agree that it will not solve the problem of rental prices, since it is will most probably increase prices due to a reduction on the offer and, therefore, the real expectations of limiting rental prices will not be reached.
The different sectors coincide, however, that one of the measures to contain rental prices should be to increase the offer of social leased housing by the administration.
This article is written by one of our independent partners in Spain, Juan, who is one of our Legal partners in Catalunia. Check his full profile here.
Looking for a property lawyer in Spain? Follow the link and get one of our local lawyer.
Looking for another real estate expert in Spain: Mortgage, Insurance, Survey of property, Property hunting, …? Ask us directly one of our 100+ local partner!
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