Giménez Torres Abogados
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Foreigners can own and occupy real estate and can hold shares in property owning companies. There are no restrictions on foreigners owning or occupying real estate, it is just required that individuals obtain a foreign identification number (N.I.E.) and companies a tax identification number (N.I.F.).
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
No. There are no restrictions on lending for the purchase of real estate by foreign companies. Registrars may request to submit a certificate of laws if the loan is subject to a foreign legislation.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
When purchasing a new real estate property directly from a developer or constructor, the buyer must pay Value Added Tax (VAT) and Stamp Duty (AJD). The standard VAT rate is 10% of the purchase price for residential properties and 21% for commercial properties, except in the Canary Islands, where the equivalent tax (IGIC) applies at a rate of 6.5%. Reduced VAT rates may apply in special cases, such as 4% for social housing. The AJD (Stamp Duty) rate varies between 0.5% and 1.5%, depending on the Autonomous Community where the property is located.
For second-hand real estate purchases, private buyers are required to pay only the Property Transfer Tax (ITP), which ranges from 6% to 10% depending on the Autonomous Community. In certain cases, transactions between businesses or companies may be subject to VAT instead of ITP, provided specific conditions are met.
Notary and Land Registry fees are almost always paid by the buyer.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Real Estate Tax (IBI) must be paid annually to the municipal council and calculated taking into account the real estate property’s cadastral value. IBI tax can be passed on to the tenant provided that it is clearly specified in the contract, but the responsible for paying the referred tax is always the owner of the real estate.
Personal Income Tax or Non-Resident Income Tax must be paid on second homes, whether they are rented out or not. The applicable tax depends on whether the owner is a private individual who is tax resident in Spain or a non-resident. In all cases, the owner is responsible for paying this tax, and it cannot be passed on to the tenant. However, a Spanish tax resident’s main residence is exempt from Personal Income Tax.
Wealth Tax/New Solidarity Large Fortune Tax must be paid or just submitted in case the acquisition value of the property exceeds certain thresholds (depending on the Autonomous Community). The main residence of Spanish tax residents is also subject to the referred taxes above certain thresholds. The owner should pay these taxes and can´t be passed on the tenant.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
There are no tax breaks for foreigners who buy real estate in Spain. Although until April 3, 2025, foreigners who purchased a real estate worth at least €500,000 could obtain a Golden Visa that allowed them to enter and leave Spain whenever they wanted, with the entry into force of Organic Law 1/2025 this option was eliminated.
How is the ownership of Real Estate evidenced in your jurisdiction?
The Land Register provides evidence of title. The registration system provides legal certainty to all parties involved in a transaction. A right or title recorded in the registry prevails over any other right or title. The transfer of real estate or the grant of rights over property should be executed by public deed in front of a notary before being registered with the Land Registry.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
The name of the owner is one of the details that must appear in the Land Registry and cannot be kept confidential, further details that appears in the Land Registry are the description of the property, the location, the registration data and the charges/encumbrances if given