If you are considering buying a property in Spain, this is probably one of the best times to do so and obtain a Golden Visa by investment in real estate. After a few years of economic recovery, the effects of the COVID are starting to be felt in the real estate market. As a result, they are probably at their lowest value or even rebounding slightly, so a good portion of the properties that are on the market can be bought for a fraction of their real value.
For Indian investors, the purchase of a property in Spain in which they invest an amount of at least 500,000 euros will allow them to apply for the Golden Visa Spain or special residence permit for investors.
However, before buying a real estate property in Spain we advise you to spend some time researching and informing yourself on what to do and what to avoid in order to stay away from the problems and difficulties that others have experienced in the past. Here is some useful information and advice to help you plan your purchase for the Golden Visa by investment in real estate.
1.- Choosing the property, paying the deposit and signing the reservation document
Our first advice is to put yourself in the hands of a reputable real estate agent who will help you find and choose the perfect property that meets your needs and expectations. The intervention of an agent will usually save you time, money and surprises. Their fees are always paid by the sellers, so there is no cost to your pocket. A solvent agent with a long experience in the area knows the properties perfectly well, the locations that may interest you most according to your expectations, the best locations within each complex or development, the nearby facilities, the distance to health or leisure centers or the security of the area, and it is a fact that, besides the price, it is important to take into account all these factors when choosing a property. In Orience, we usually work with Colibree, a real estate agency implemented throughout the territory and consisting of highly professional agents.
Once you have chosen the property, it is advisable to pay a deposit and signing a reservation document. The deposit is usually a small amount (between 3,000 and 6,000 euros) that is held by the real estate agency or the seller’s lawyer and serves to secure the purchase and remove the property from the market, as well as to freeze the price. It is important to emphasize that, should the buyer decide not to complete the transaction, he/she will not be able to recover the deposit.
2.- Appoint a local lawyer to advise you on the purchase
Your local lawyer has the tools, contacts, knowledge and experience to verify the legal capacity of sellers, developers and other intermediaries; to draft or review every document to be signed that may compromise your interests; to ensure that all legal requirements are met; and to make sure that the property is free of debts, liens or encumbrances.
A local lawyer not only knows the applicable legislation, but also the area and the potential problems or advantages of one or the other option, so his or her knowledge will be very useful to you.
At Orience we have a team of lawyers with extensive experience in the Golden Visa by investment in real estate sector. In addition, we can carry out most of the procedures by power of attorney, which will allow you to make your purchase without the need to travel constantly to Spain.
3.- Open a bank account
You will need a bank account in Spain to pay for the property and all the expenses associated with it, such as the community fees and the bills for the utilities of the property (water, electricity, etc.). You can use any bank in Spain, but it is advisable to open the account in a bank that has a branch located near your property.
Before opening the account it is advisable to prepare all the personal documentation, as you will have to go through a strict compliance process
4.- Obtaining the NIE
The Foreigners’ Identification Number (known by its Spanish acronym NIE) is a unique, personal and invariable number used to identify foreign taxpayers. All foreigners with economic, professional or social interests in Spain are obliged to apply for the NIE before the competent body of the Ministry of the Interior. You can obtain the NIE at the Spanish Consulate or Embassy in your country of residence or at the Police Station of the Spanish city where you live, work or intend to buy a property. The problem of doing it in person is usually the time needed, the queues to be done, etc. Orience offers its clients a fast and hassle-free NIE service.
5.- Study of the property and signing the purchase contract
Once the deposit has been paid and the reservation document has been signed, the owner or his representative must provide the purchaser with the documentation of the property that will allow him to study the viability of the operation from a legal, urbanistic and fiscal point of view. Normally it is somewhat complicated for a private individual who does not have basic knowledge of the Spanish legal system to carry out these checks personally, so it is always advisable that they place themselves in the hands of a professional. At Orience we carry out exhaustive checks in property registries, town halls, communities of owners, supply companies and other organizations.
The signing of the private purchase contract takes place between two weeks and one month after the delivery of the deposit and is usually accompanied by the payment of 10% of the purchase price. There are different types of purchase contracts, but the most commonly used is the Deposit Contract, which provides that if the buyer withdraws from the purchase, he/she will lose the amounts paid. If, on the other hand, it is the seller who withdraws, he must return double the amount received.
6.- Signing of the deed of sale and delivery of possession
The purchase process ends with the signing of the public deed of sale by the buyer and seller. At that moment the seller grants title to the property to the buyer and the buyer delivers the rest of the agreed price. The signing of the deed of sale is formalized before a notary public. The notary is a public servant and, therefore, independent of the parties, who gives public faith that these have agreed the transaction and that they have done it according to the law.
Prior to the signing of the deed you will have to transfer to your Spanish bank account the funds to cover the price, taxes and expenses that will be incurred. Due to the investment control policies and the obligation to certify the payment methods and the origin of the funds, it is convenient to prepare the transaction in advance.
As soon as the deed is signed at the notary’s office, your title deed is already reflected in the Land Registry as a result of the notary’s own telematic presentation. However, further processing is required, which consists of withdrawing the original document from the notary’s office, settling and paying the corresponding taxes and, finally, presenting the deeds at the Land Registry for full registration.
If the property is not registered in your name in the Land Registry, you will be able to own it privately, but you will not enjoy the guarantee that the registration in the Land Registry offers you against third parties. The registration process is usually completed within one month.
7.- Apply for the Golden Visa
Once you have completed all the procedures detailed here, you will be able to apply for the Golden Visa by investment in real estate. The investors coming from India, must carry out this process in the consulate of their city of residence. Orience guides its clients through the entire process and, if necessary, contacts the corresponding consular office.