Legal Tips for Romanians Buying Property in Spain

The purchase of a property in Spain by Romanian citizens is increasingly common, especially in tourist areas with high appeal such as the Costa Blanca. Although Spain offers a favorable legal framework for foreign buyers, it is essential to understand the specific legal aspects of the process to avoid potential issues and ensure a successful buying experience.

In this article, we will detail the essential legal steps that Romanian citizens should follow when purchasing a property in Spain, from obtaining the Foreigner Identification Number (NIE) to taxes and sales contracts.

1. Obtaining the Foreigner Identification Number (NIE)

The NIE is an essential requirement for any foreigner who wants to conduct financial transactions in Spain, including property purchases. This number is necessary to register the property in your name, open a bank account, and fulfill your tax obligations in the country.

Where to apply: You can apply for the NIE at a police station in Spain, a Spanish embassy or consulate in Romania, or through a legal representative in Spain.
Required documentation: Generally, you will need your passport and a letter justifying the need for the NIE (for example, the property sales contract).
Processing time: Obtaining the NIE usually takes a few days if done in person in Spain, although it may vary depending on the time of year and location.

It is recommended to obtain the NIE as soon as possible, as it is required for all other legal and financial aspects of the purchase.

2. Opening a Bank Account in Spain

Opening a bank account in Spain is another important step for Romanian citizens who want to purchase a property, as it facilitates the payment of taxes and other property-related expenses.

Required documentation: You will need to present your NIE, passport, and in some cases, proof of income or financial solvency.
Advantages: Having a bank account in Spain makes it easier to arrange payments such as Property Tax (IBI), community fees, and public services like water, electricity, and internet.

The bank account also simplifies the process of paying the property price, especially if the seller requests transfers in euros.

3. Deposit Contract: Purchase Commitment

The deposit contract is a preliminary agreement to the final purchase in which the buyer and the seller commit to completing the transaction. This contract usually requires a deposit of 10% of the purchase price, which will be returned to the buyer if the seller decides to cancel the transaction.

Purpose of the deposit contract: This contract ensures that both parties are committed to proceeding with the purchase. If the buyer withdraws without a justified reason, they will lose the deposit.
Content of the contract: The deposit contract should include important details such as the property price, the deadline for signing the deed, terms and conditions, and any other clauses agreed upon by both parties.

The deposit contract is a crucial step in purchasing a property in Spain, and it is advisable to have it reviewed by a lawyer to ensure that all terms are fair and beneficial.

4. Signing the Public Deed Before a Notary

The public sales deed is the official document that transfers property ownership in Spain. This act must be carried out before a Spanish notary and is an essential step to complete the purchase.

Notary's role: The notary in Spain is a public official who ensures that the transaction complies with the law. They also verify the parties' identities, confirm that the property is free of encumbrances, and register the title transfer in the Property Registry.
Required documentation: You will need the original property deed, the buyer's and seller's NIE, the deposit contract, and proof of purchase funds.
Payment of the remaining price: At the time of signing the deed, the buyer will pay the remaining property price to the seller, typically by bank check or transfer.

Once the public deed is signed, the notary will register the property in the Property Registry in the name of the new owner.

5. Taxes and Expenses Associated with Property Purchase in Spain

It is essential to understand the taxes and additional costs involved in purchasing a property in Spain, as they represent a significant part of the total transaction cost.

Transfer Tax (ITP): This tax varies between 6% and 10% of the purchase price, depending on the autonomous community. In the Valencian Community, where Altea is located, the ITP is usually 10%.
Notarial and registration fees: The notary's fees and the cost of registering the property in the Property Registry typically range between 1% and 1.5% of the purchase price.
Legal and agent fees: It is advisable to have a lawyer oversee the purchase process, especially if you are a foreigner. Legal fees generally range from 1% to 2% of the property's value. Real estate agent fees are often included in the sale price.

Make sure to budget for these additional expenses to avoid surprises during the purchase process.

6. Annual Property Taxes

Once you own a property in Spain, you must pay certain annual taxes, regardless of whether you use the property as a primary residence or a second home.

Property Tax (IBI): This is a municipal tax paid annually and varies depending on the property's cadastral value and location.
Non-Resident Income Tax (IRNR): If you do not reside in Spain but own a property, you must pay this tax, which is calculated on the cadastral value of the home. If you rent the property, IRNR applies to the rental income.
Wealth Tax (IP): Depending on the value of your assets in Spain, you may be subject to this tax, which applies to non-residents who own high-value properties in the country.

A tax advisor in Spain can help you meet your tax obligations and optimize your tax situation.

7. Non-Resident Obligations and Rental Requirements

If you plan to rent out the property when not in use, it is important to know the local rental laws in Spain. There are specific regulations in each autonomous community, and some require a license to rent the property to tourists.

Tourist rental licenses: In many regions, including the Valencian Community, it is necessary to obtain a tourist rental license to rent the property short-term. This involves meeting certain requirements and registering the property with the local tourism office.
Declaration of rental income: As a non-resident owner, you must declare rental income and pay IRNR. Rental taxes must be declared quarterly and apply to the generated income.

Complying with rental regulations and declaring income correctly will help you avoid legal issues and fines.

Conclusion

Buying a property in Spain as a Romanian citizen is a process that can be highly rewarding and profitable, as long as you ensure to follow the necessary legal steps and meet all tax and registration obligations. From obtaining the NIE to signing the deed and paying taxes, each stage is essential to complete a successful transaction and protect your investment.

With the support of our team at our real estate agency in Altea, you can enjoy your property on the Costa Blanca without complications and comply with all Spanish regulations.