The best cities to invest in Property in 2018

Considering that in Spain, people most generally prefer to purchase their houses rather than renting them, one might think that this option is more profitable for us.

It is, in fact, the uncertainty of the markets which may make us to want to find a better choice to invest in, and the purchase of a house emerges as a right option, even more so considering that the purchase of a property for its subsequent rental is on the rise in recent months.

The smaller size apartments seem the most interesting ones, and in most province capitals, the average size is around 55 square meters. Nonetheless, there are also exceptions, such as Lleida, where the average flat for sale has around 160 square meters.

Obtaining the higher profitability out of an investment depends heavily on a number of factors that we must keep in mind when buying a property for, afterwards, renting it, such as if it has an elevator or how many rooms it has or the condition of the house.

The cities that show higher profitability and a significant positive trend with respect to the previous year are Madrid, Málaga, Valencia and Alicante.

The housing shortage in the capital city centres makes people increasingly interested in buying in the ‘suburbs’; this is what happens, eg, in Madrid. In the case of Barcelona, ​​the interest is also shifted to residential areas such as Baix Llobregat and Vallés. Valencia and Alicante, though, have very competitive prices in their downtown areas and Málaga is noteworthy due to the relevance of its district of ​​La Malagueta.

To avoid unnecessary risks, best advice is to resort to the help of experts. They will assess all the data and will recommend you the most suitable investment to your profile and to your needs.

Taxes foreigners must pay in order to acquire their housing in Catalonia

In Spain, any foreigner can acquire a property in the same way a Spanish citizen does, however, a non resident person needs to meet several other requirements to carry out the operation

Firstly, it will be necessary to have the Foreigner Identification Number, which can be obtained in both the country of origin and Spain. Otherwise, it´s not necessary to have an account in Spain, but by opening one, the purchase management can be much easier.

The purchase of a house is charged with several taxes:

  • The Value Added Tax (VAT), in case of new houses or first transmission (10%).
  • The Property Transfer Tax, in case of second-hand residences or second transfer. The tax rate in Catalonia is 10% if the property value doesn´t surpasses a quantity of 1.000.000€ (it would be 11% from here on out). It must be paid in case VAT is not applied in the transfer.
  • Documented Legal Acts Tax. It must be paid in case the house is purchased and VAT is applied and if is purchased by means of a mortgage.

In addition, there are several other expenses to take into account, such as the Public dead in the notary and the registration of the deed in the Property Registration Office. In case it´s necessary to request a mortgage, both the valuation and public notary must be included within the mortgage taxes.

Over the year, it would be necessary to face other taxes too: Real State Tax, the Wealth Tax– as the case may be-, Personal Income Tax or, if the foreigner doesn´t live in Spanish territory permanently, it will be necessary to pay the Non Resident income tax.

In order to avoid any further complications, the ideal would be to put oneself in a property agent´s hand, since this person will guide you during the whole process. From the choice of the more suitable house for you to make easier any purchase – selling procedure.

 

HOW TO OBTAIN AN NIE

The NIE (Número de Identidad de Extranjero) or Foreigners’ Identity Number is a unique and exclusive personal identification number assigned to foreigners who have economic, professional or social interests in Spain.

Foreigners can apply in person to the Directorate-General of the Police, directly or through Spain’s consular offices abroad.

It is easier to obtain the NIE in the country of origin, preferably requested one to two months in advance. One only needs to contact the embassy and once the appropriate documents have been sent and the application has been processed, the NIE will be sent to your home.

To apply for the NIE in Spain, it is necessary to first arrange an appointment, both for citizens from inside and outside of the European Union.

The documents necessary for an NIE application for citizens of the European Union are the following:

  • Proof of prior appointment
  • Passport or identity document from your country of origin (copy and original)
  • Form EX-15 of application for the NIE.
  • The completed and signed Modelo 790-012 form.

For citizens outside of the European Union, in addition to the aforementioned documents, must bring a certificate of legal registration.

In addition to this documentation and depending on the particular applicant, one may have to present additional documents to justify one’s NIE application, depending on whether one is working, studying or training.

It is very important to bear in mind when presenting documents from other countries, that they must be translated to Spanish or the joint official language of the region in which one is applying.

 

Once one is in possession of all these documents, one may visit the Directorate-General of the Police or a Foreigner’s Office (Oficina de Extranjería) to have the application processed.

If you have any questions, please consult the website of the Interior Ministry  http://www.interior.gob.es or the Ministry of Employment and Social Security http://extranjeros.empleo.gob.es

 

GOLDEN VISA

The Golden Visa or Spanish Investment Residency, was created with the passing of the Entrepreneurs’ Law (Law 14/2013 of 27 September, to support entrepreneurs and boost internationalisation). The objective is to facilitate and simplify entry into and residence in our country through the provision of visas and residency permits, which are valid throughout the national territory, to foreigners from outside the European Union who are not entitled to the rights of free movement and residency and who purchase property located in Spain. Where this is the case, the investor acts in the capacity of a normal or legal person.

One of the defining characteristics of these visas and permits is that by reducing the periods of time taken by the relevant authorities to provide them, the acquisition process should be streamlined for non-EU investors who satisfy the requirements of Law 14/2013.

An investor will be entitled to request a property investment visa, which will be sufficient to allow residency in Spain for at least one year. Investors will also be able to request visas for a partner and any children under the age of 18 or who are over this age but economically dependent on the main investor.

In order to obtain the visa, the applicant must prove complete ownership of property in Spain of a value equal to or greater than €500,000, in addition to fulfilling the general requirements of entry and residency for foreigners who do not intend to engage in paid activities.

The initial residency permit for investors will last for two years. Once this period of time has elapsed, any investors wishing to remain in Spain can request a renewal of the investor residency permit for the same two-year period.