When we talk about the real estate market, we are referring to “Real Estate” in Spain, a term widely used today. Specifically, we are referring to properties that, by their very nature, cannot be moved from the location where they are situated.
It also means real estate, and is an Anglo-Saxon term that encompasses the rental and sale of properties. In that sense, Spain is currently one of the preferred destinations for investing in real estate. It ranks seventh among the most attractive countries for investment in this sector.
Legal Updates on Real Estate in Spain
Despite the challenges, the real estate sector in Spain saw a 32 % increase in investments in 2021 compared to 2020. We’re talking about more than €12,000,000,000. Compared to 2019, the increase was 1.6 %, and all signs point to this year being 2.4 % higher than 2021.
That is why technical expertise is crucial to successfully completing a negotiation of this magnitude. Investors should never overlook details such as:
- The necessary compliance requirements.
- Legal assistance.
- Coordinate the notary offices.
- Stay up to date on your taxes.
- Registration in the appropriate registry.
- Required documentation.
Equally important is the implementation of anti-money laundering measures under Law 10-2010. This process takes time, and investors may become discouraged; that is why professional advisors are available to provide guidance on these matters.
What to keep in mind
Anyone interested in investing in real estate in Spain should keep a few things in mind.
1. The legal system
Provide a detailed description of the transaction, including the financial capacity to make the purchase and the legal details that will ensure it is fully protected.
2. Contracts
It is essential to pay close attention to the validity of the contracts to be entered into, as well as their details regarding warranties, terms, and penalties for breach. This is of paramount importance because it helps anticipate potential adverse events that could jeopardize the success of the transaction.
3. Taxes
It is advisable to familiarize yourself with all the details regarding taxation and the costs associated with maintaining the property. It is important to thoroughly understand the country’s current legal framework well in advance.
Can anyone invest in Spain?
Yes, any individual or legal entity may do so, provided that the investment does not fall within the range of €1,500,000 to €3,000,000. In that case, it must be subject to a special regime under Royal Decree 664/1999, which also applies to funds originating in tax havens.
Stages of the investment
In Spain, the payment for a property is made in two installments. The first, known as the “arras,” ranges from 5% to 15% of the sale price. It serves as a way to seal the commitment and includes a penalty for breach of contract. The contract will specify when the remaining balance is to be paid in the second installment.
Can the procedure be performed in another country?
Yes, especially if the investor is based in the EU. In some cases, a visa is required, but the investor can authorize legal representation by granting a power of attorney, a procedure that can be completed in their home country.
When the investment exceeds €500,000, the investor is eligible for a golden visa. This is an incentive for those who wish to bring their capital into the country. A good legal advisor will help you obtain it without having to travel.
A good time
Now is definitely a good time to invest in real estate in Spain, provided you have the necessary professional guidance. With expert legal advice from specialists in the field, you can successfully complete your transaction and maximize your investment. For any questions, please contact the law firm of Carlos Baño León, as we are experts in real estate law and have been dedicated to this field for over 35 years.
