Investing in luxury Real Estate and exclusive properties in Spain can be a highly lucrative decision for your portfolio. This has led to an increasing number of foreign investors inquiring about purchasing luxury properties in one of the world’s most promising Real Estate markets. At Golden Partners, we assist you in navigating the Spanish Real Estate market with confidence and success when you wish to invest in Real Estate.
In this post, you will find a comprehensive guide addressing the common questions our clients have about understanding the luxury market in Spain, selecting the ideal location, the buying process, financing and costs, the most important legal and bureaucratic aspects, and other considerations before investing in Real Estate in Spain.
Understanding the luxury market in Spain
In 2023 alone, the Spanish Real Estate market experienced notable growth with a 6.2% increase in housing prices, according to the Ministry of Transport, Mobility and Urban Agenda. Moreover, the demand for housing remains strong, supported by policies that encourage foreign investment and market stability, as reported by the National Institute of Statistics.
Before embarking on the purchase of a luxury property, it is essential to understand the landscape of the luxury Real Estate and exclusive properties in Spain. Spain offers a diverse array of options, from the sunny coasts of Marbella to the urban enclaves of Madrid and Barcelona. Each region has its unique characteristics and advantages, allowing investors to choose according to their preferences and objectives.
Choosing the ideal location
When considering how to buy luxury Real Estate and exclusive properties in Spain, location plays a crucial role. Areas such as Marbella, with its stunning beaches and luxurious lifestyle, are very popular among foreign investors (such as the new residential complex Golden Hills).
Barcelona and Madrid, on the other hand, offer great cultural and commercial opportunities. Other cities like Seville or Alicante are also attractive due to their pleasant year-round climate.
The buying process
The process of purchasing luxury Real Estate and exclusive properties in Spain involves several steps, from searching and selecting the property to signing the contract and registering the property. Having the advice of legal experts, such as the professionals at Golden Partners, can facilitate this process, ensuring all regulations are met and the investment is secure.
Financing and costs
When considering how to buy luxury Real Estate and exclusive properties in Spain, it is important to take into account all the associated costs.
Thus, a foreign investor in Spain, classified as a non-tax resident by Spanish tax authorities, will face the following expenses:
1. Property Transfer Tax
The Property Transfer Tax (from Spanish, ‘ITP’) varies between 6% and 10% of the purchase price, depending on the Autonomous Community.
2. Value Added Tax
For new homes in Spain, VAT (from Spanish, ‘IVA’) is a fixed tax rate of 10%. For new commercial premises and plots, VAT is 21%.
3. Stamp Duty
The AJD (from Spanish, AJD) ranges from 0.5% to 1.5% of the purchase price, depending on the Autonomous Community where the property is located.
4. Notary fees
Notary fees in Spain range from approximately 0.5% to 1% of the purchase price and include the public deed of sale.
5. Administrative or legal fees
If you use an administrative service or a law firm to handle the bureaucracy, costs can range from €300 to €500 for administrative tasks, plus a percentage of the lawyer’s fees for all legal and bureaucratic document preparation and submission.
6. Appraisal
If an appraisal of the property is needed, the cost is approximately between €300 and €500.
It is important to note that if you are already a tax resident in Spain, you may have additional tax advantages or deductions depending on your particular situation, such as the deduction for the purchase of a primary residence, which are not available to non-residents, and always depending on the Autonomous Community where you decide to establish your permanent residence.
Regarding financing, many buyers opt for mortgages, which requires careful evaluation of the available options and the conditions of the Spanish financial market.
Thanks to the Golden Visa, your taxation as a resident in Spain could be much lower without having to meet the residency requirement for at least the first two years. Additionally, your immediate family can also benefit from it.
Legal and Tax Considerations
Buying luxury Real Estate and exclusive properties in Spain involves a series of legal and tax considerations. The Building Law in Spain, for instance, regulates construction defects such as hidden defects or delays in the delivery of your property, while the Beckham Law offers tax benefits to foreign residents, such as a 24% tax rate on the first €600,000 instead of the marginal rate of 47%, which can be even higher in some regions of Spain. Our team of Real Estate lawyers can provide crucial guidance to maximize benefits and minimize risks.
Additional considerations
In addition to financial and legal aspects, it is important to evaluate other factors such as local infrastructure, quality of life, and leisure opportunities. Spain is known for its excellent climate, rich culture, and high quality of life, making it an attractive destination for luxury property buyers. According to Numbeo’s 2023 Quality of Life Index, Spain ranks 20th worldwide, standing out for its work-life balance, healthcare system, and safe and clean environment.
Hire the best Real Estate lawyer
Having the advice of Real Estate law experts offers multiple advantages when knowing how to buy a luxury property in Spain:
- Optimizes your time in managing Real Estate investments.
- Deep knowledge of legal requirements and regulations of the destination country, helping you make informed and appropriate decisions for your purchase or investment.
- Overcomes language and cultural barriers, facilitating the understanding of the country’s registry and administrative practices. Our team is accustomed to dealing with foreigners from all over the world.
Buying luxury Real Estate and exclusive properties in Spain can be a rewarding and profitable experience. At Golden Partners, we are dedicated to offering personalized and expert advice to make your investment a success, accompanying you throughout the investment process in the Spanish Real Estate market or at any stage regarding the acquisition of your property, even if you have experienced any difficulties.
At Golden Partners, we are leaders in legal and tax advice for investing in Real Estate in Spain, with offices in Madrid, Barcelona, Malaga, and Tenerife, although we assist you throughout the entire country. Please, feel free to contact us through our contact form.
