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Sale of a property when the buyer or seller is not a resident

In Spain, it is not considered a problem when a foreign person wants to buy a property, as that person has the same rights as any other Spanish native. There is also no problem with a non resident or foreginer, who is already a property owner and who wants to sell their property, the only thing to have in mind is a series of questions which may present themselves before the Notary or at the Registry of the Property.

We begin by looking at what the Spanish Law of the IRPF understands as a resident:

  • Those who live in Spain for more than 183 days per year
  • They have their main activities on Spanish land, directly or indirectly
  • You are the spouse or partner of a Spanish resident with children who are under 18 and who habitually live in Spain and depend on that person

For those who do not fit in to any of these three requirements, here are some things to consider:

· 1 In the instance that the buyer be a non-native or not a resident

The buyer must obtain the identification number for foreigners (NIE) before signing the Public Deed. The request can be made in Spain at the Foreigners Office or at the General Immigration Commissariat or at the Spanish Consulate of the country which the application is being made. In order to do this you will need to fill out and sign a form, original and photocopy of the passport or identity document and communicate the causes that justify the request, in this case the purchase of a property.

It is also advisable to open a bank account in Spain given that through this account means of payment will be accredited as well as the payment of the corresponding taxes.

If the person who is not a resident meets with what we have previously mentioned they will have no trouble in buying the desired property and will have the exact same rights as a Spanish citizen.

 

· 2 In the instance that the seller is a non-native or not a Spanish resident

They should also obtain a NIE in order to be able to sell their property.

If the seller is not a Spanish resident, when carrying our a sale they will be subject to the following taxes.

Non Resident Income Tax (IRNR).

Tax on the Increase in the Value of Urban Land or Municipal Capital Gains.

As a general rule and to guarantee that the foreign seller/non Spanish resident meet their legislative requirements, the buyer is obligated to retain 3% of the purchase price when granting the Public Deed and to deposit that amount to the Public Treasury within a maximum period of one month as payment on account to the (IRNR). The buyer may be exempt from withholding 3% in the event that the seller certifies by means of a certification from the Tax Agency that is subject to the Personal Income Tax (IRPF) or the Corporation Tax (IS).

Likewise, the seller must pay the Municipal Capital Gains provided that the value of the land of the property is higher than at the time purchased. In this case, the buyer must take the precaution of withholding from the purchase price the amount corresponding to the Municipal Capital Gains in order to declare and pay it within a month, since if the seller does not pay the said tax the property would respond to the payment of the tax and therefore the Treasury would reclaim it from the buyer.

All of these specific requirements which affect foreigners and non-Spanish residents should be well explained and highlighted in the down payment contract, which is why once again we recommend seeking guidance from a real estate agency as experienced as Nova Mallorca or also a specialised solicitor.

Important real estate information

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