We receive more and more inquiries from clients in Argentina who want to buy one or more properties in Spain. We explain here all the steps to buy a home in Spain if you live in Argentina.
But first, if you are wondering why you should buy a property in Spain, we recommend you to read this post of our blog: 6 reasons to buy a property in Spain if you live in Argentina.
1) Decide what to buy and where
There are options for all tastes and needs: in the center of a large city, in a neighborhood, in the suburbs, in a medium-sized city or in a village. House or apartment? How many rooms? The decision depends on what your objective is. If you prioritize profitability, it will be a one or two-bedroom apartment in the center of a big city. If you want to protect your capital and have a place to live if necessary, you will have to choose according to your needs and tastes.
In all cases, it is key that you get advice from your team. Explain what your objectives are, why you are buying in Spain and they will tell you what property to buy and where.
2) Choose your equipment in Spain
Your team can be a real estate agency, an agency, a lawyer's office. Or a trusted person in Spain who hires the necessary professionals for each step. The key is that they are trustworthy and have proven experience. Dedicate time to this step, because it is the most important. Much of the success or failure of the investment is decided in the choice of your team.
3) Obtaining NIE and opening a bank account
It is necessary to obtain the Foreigners Identity Number (NIE) to buy a property in Spain. It is not necessary to have a residence permit to obtain the NIE. You can apply for it at the Spanish consulate closest to your address in Argentina. or by appointing a representative in Spain.
Being a citizen of the European Union does not change the procedures to be followed when buying a property in Spain as a foreigner.
You must have a bank account in Spain to transfer from Argentina the money with which you will buy the house. Both accounts must be in your name, and they are called mirror account. In theory, it is possible to open the account from Argentina through a proxy, but the reality is that it is difficult to find a bank that accepts it. Your team will have to ask in the bank offices of the city where you buy, until you find one that allows you to open the account from Argentina.
4) Select, analyze your property and negotiate price
Your team will search for properties that fit your budget and requirements. They will visit them and let you know when they find one that fits what you are looking for. Before making the decision to buy, it is necessary to analyze the condition of the building in which the apartment is located, or the house you want to buy. For this, we recommend you to have a technical architect visit the property and study the report of the last ITE (Technical Inspection of Buildings). This inspection is mandatory every 10 years, -for buildings older than 30 years-. unless it is a detached house, in which case this inspection is not done.
It is also essential to verify the registration status of the propertyThe Spanish law presumes that the buyer is aware of them, and cannot later claim ignorance of them. Spanish law presumes that the buyer knows them, and cannot then allege ignorance.
If all is well, then the purchase price is negotiated. Your advisory team will tell you how much the price can be lowered but, in general, don't expect a discount of more than 10% in the best case. In Spain, sales prices are not usually inflated as in Argentina and then negotiated.
5) Choosing the notary's office
The buyer chooses the notary's office -that's what they are called in Spain-. Fees are regulated and all of them charge ehe same fee. However, some notaries increase their fees by including documentation that is not necessary in the deed. One of the criteria of the notary bill is the number of pages of the deed.. Therefore, the criteria to choose will be the recommendations in terms of honesty, efficiency and speed.
6) Sign earnest money contract
In Spain there is no boleto de compra-venta, so common in Argentina. The signing of the earnest money contract is the moment when the parties agree in writing on the sale price, the buyer pays a deposit and a deadline is set for the completion of the transaction.
The deposit or reserve is typically 3% of the selling price. The deadline for the signature at the notary's office is usually two months. If the buyer does not pay, he loses the reservation. If the seller decides to cancel the sale, he must pay the buyer double the reservation.
It is common for the earnest money contract to be signed at the real estate agency handling the sale, but it can also be signed at an agency, law firm or notary's office.
7) Preparation of documentation
Getting everything ready for the signing of the deed usually takes between one and two months. The notary's office is in charge of the preparation and is in contact with the buyer and the seller to gather the documentation. Before the signing of the deed, the buyer must pay to the notary between 10 and 15% of the sale price, as a provision of funds. From there the notary's fees and expenses and the purchase taxes are paid.
If the property is new, a VAT of 10% of the sale price is payable. If it is used, a VAT of Property Transfer Tax (ITP) which varies in each Autonomous Community. The fluctuation is important and ranges from 11% of the purchase price in Catalonia to 4% in the Basque Country. There are deductions according to age and income, so it is advisable to seek advice. These taxes for the purchase are paid with the provision of funds that you will make to the notary's office before the signature.
8) Payment, signature and key handover
Meeting at the notary's office on the agreed date, the buyer presents the check with which he completes the payment and the notary reads the deed. The parties sign it and the keys are handed over to the buyer.
The buyer takes a copy of the deed. The original will be delivered by the notary's office after a few weeks, once it has been registered in the Land Registry.
The signing of the deed is the only time in the entire process when we recommend traveling from Argentina. It is not essential; a person of your extreme confidence can sign the purchase on your behalf. But if you are buying a property, it is worth paying for a plane ticket to be there on the day of the signing and be able to personally see what you have bought.
After purchasing
Now that you are a property owner in Spain you will have to do some formalities to get everything in order. For example, the Property Tax will be debited from your Spanish bank account. If you are going to rent the property, you will have a lot to discuss with your trusted team in Spain.
You must also tax advice. It is necessary to analyze your new tax situation, both before the Spanish Tax Agency and before ARCA.
Taxes payable
- Rentals do not pay VAT, but the income obtained is taxed. For non-residents the tax is 24% per year, not on the total rent but on what exceeds the non-taxable minimum.
- Each municipality collects the Real Estate Tax (IBI), which is paid quarterly. But it is not expensive. For example, an 80m2 apartment in Barcelona valued at €300,000 will pay about €500 per year.
- Residents in Spain do not pay personal property taxes on their real estate. But non-residents who keep the property unoccupied must pay between 1.1 and 2% of the cadastral value per year, depending on the municipality in which the property is located.
- Argentina and Spain have an agreement to avoid double taxation. Therefore, you will not be charged twice for the same tax. But a tax will be charged that does not exist in one country and does exist in the other.
- If you live half a year plus one day in Spain, you will have your tax residence in Spain. And the same goes for Argentina. That will define what taxes and what tax rate you will pay in each country.
Management and advisory services
If you have already decided to buy a property in Spain and you need help, MBT Abogados offers our clients in Argentina the integral service of buying a property in Barcelona and its surroundings, which includes:
- Housing selection.
- Check documentation and building condition.
- Price negotiation.
- Preparation of documentation for the notary's office.
- Accompaniment at the time of signing.
- If it will be rented, advice on the choice of the property manager.
- Tax advice regarding taxation in Spain and Argentina.
- Advice on opening a bank account in Spain and how to bring the money from Argentina.
- Preparation of powers of attorney if necessary.
- Advice and assistance in obtaining a mortgage in Spain.
You can consult more information about this service in this post of our blog.
Do not hesitate to contact us at email or Whatsapp To request a quote. We are a law firm in Barcelona, specializing in services for Argentinians.
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