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Ishana Investment Group
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The NIE (Número de Identificación de Extranjero) is the identification number in Spain for everyone who is not a Spanish citizen. Both EU citizens and non-EU citizens get issued a NIE. The NIE is not a fiscal residency identification; you can have a NIE and be fiscal resident in another country.
How do I get my NIE number in Spain
Follow these steps to obtain a NIE number:
Fill out the NIE application form (EX-15), and print. You can also obtain this form at any NIE office. You must fill out the form in Spanish, but for help in filling out this form, see the English version and French version, or our filled out version. The marital status abbreviations are single/Married/Widowed/Divorced/Separated (in that order).
If you're in Spain, go to the police station or Oficina de Extranjeros. Outside of Spain, go to the nearest Spanish Consulate (the "Consulate dept legalizaciones", not the Embassy).
You must bring:
- The filled-out form
- A copy of your passport (all pages)
- A passport photo
- Approx. 9.64€ to pay Tax Form 790.
Note: The Spanish government revised the NIE application process in April, 2012.
Once you have decided on the property that you want to buy, the process is as follows:
Preliminary check on the property.
With a nota simple from the Property Registry (Registro de la Propiedad), you'll find out if the property is free of debt, if it really belongs to the seller, and if the description of the property matches what the buyer has been. We get this document from (Registro de la Propiedad).
In the process of buying an existing property in Spain, the mortgage is going to take the most time. The current laws have changed in Europe and an average mortgage from beginning to end can take up to 6 to 8 weeks.
Firstly, we go about retrieving all the documents that the bank asks for. Then they can pre-approve you, and you can safely sign the pre-agreement and down payment once we have found the property knowing that you can cover the money required.
Between the seller and the buyer, it's best to have a contract in place until the public deed of purchase is ready. It's usually a simple document in which the seller expresses their intent to transfer the property to the buyer, and the buyer expresses their intent to buy at the price and conditions agreed upon. At this time, the buyer also gives to the seller a percentage of the agreed-upon price, typically 10%.
The typical agreement in Spain (contrato de arras) is if the buyer backs out of the contract, they lose the deposit; if the seller backs out, they have to pay double. Of course, the buyer and seller may choose another type of agreement as there are several options to consider at this stage.
Once the bank has a copy of the pre-agreement, they hire an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. The bank will only give you a loan equal to a determined percentage of the appraised value of the house.
Some buyers and seller require an estimation or evaluation of their property to see if it is in market values. We at Ishana offer the service of valuations and can also arrange for an appraiser to give you a value on your property. Additionally, our appraisers are also registered architects should you want to refurbish your property present projects or request for a license to make any extensions.
The property transfer must be certified by a notary. The deed of purchase will be given to the buyer after the notary reads it and the parties present agree to the contents of the deed. The following must then be presented: proof of identity (or power of attorney) of both parties, the seller's title of property certifications from community, town hall, confirming all payments are up to date and the buyer's payment. The buyer and seller sign the contract; beneath their signature, the notary signs and the deed is ready for taxes.
After the closing
Once the closing is done, the follow-up work is to make sure the utilities are in order, taxes are paid (see Taxes below), and that your new ownership of the property has been registered (see Property Registry below). With a Spanish property in your name, you will need to file yearly income tax and property tax. Even if you have a valid will in your country of origin that includes your Spanish property, we also recommend having a Spanish will drawn up.
For the buyer: transfer tax(impuesto de transmisiones patrimoniales) and stamp tax(impuesto de actos jurídicos documentados).
If the seller is an individual, the buyer pays a transfer tax. This tax varies between 7% and 8% of the purchase price, depending on the whether it is a purchase from the builder or whether it is a resale or second hand.
For the seller: a local tax called the plusvalia.
With a copy of the deed in hand, the seller must go to the town hall. After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property's valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia.
You must register your deed at the local office. This guarantees that your ownership rights to the property are fully protected.
The commercial and civil codes in Spain are complex and require a Spanish lawyer with a deep knowledge of both if you want to achieve your goals in Spain. If Spanish is not your native language, it may be harder to work with a lawyer and understand the content of a contract.
Our affiliate lawyers in Spain are specialists in real estate, immigration, business law, company formation, and intellectual property. We also partner with lawyers throughout Spain to provide you with service in English wherever you need it.
We provide the following legal services:
- Property transactions: We perform all the background checks on the property, and manage relations with the notary and broker/seller to ensure the real estate purchase goes smoothly.
- Immigration: Step-by-step assistance to obtain a residence permit for you or your family from our in-house immigration lawyers.
- Contracts: We cover all your needs, from drafting contracts and agreements to complex transactions.
- Intellectual property: We register your trademarks, brand names, and patents in Spain.
- Labour lawyer: We highly recommend hiring a labour lawyer for advice as soon as you, as employee or employer, enter into a conflict regarding a firing.
- Inheritance: We register the death, process the will, negotiate the proper division of assets, and register the new ownership of properties in Spain.
- Wills: We draft your Spanish will to ensure your properties in Spain will be transferred according to your wishes.
- Litigation: We offer a comprehensive business litigation and dispute resolution service that covers the main areas of commercial and civil law, always looking for the solution that best suits the client's interests.
- Debt collection: With our debt collection service, we charge our fees in proportion to the amount actually recovered.
What is the role of a notary in Spain?
A notary in Spain has a more elevated role than in the UK or USA; they do much more than just verify signatures. To gain the title of notary requires years of additional studies. At the closing, the notary takes over, acting on behalf of both parties to make sure that the transaction is proper and agreed to.
How does a power of attorney work in Spain?
A power of attorney done in Spain in front of a Spanish notary grants the authorised officer to act as your legal representative with full efficacy within the area of powers granted in any country world-wide. The efficacy is such that, in Spain, even though the power of attorney has been revoked, unless the deed granting power of attorney is not withdrawn, the authorised officer may continue to act on your behalf (or to your detriment). For this reason it is important to define specifically the powers granted and find out about their respective effects. We can advise you about these points, and let you know the steps to follow to obtain international legitimization if you want the document to be effective outside Spain (The Hague Apostille).
Where do I get a power of attorney that is valid for Spain?
A power of attorney may be validated by a notary in Spain, by a notary at the Spanish Embassy, or by Spanish notaries outside of Spain.
What is The Hague Apostille?
The Hague Apostille allows a public document from one country to be recognized as a valid document in another country, among countries that have signed The Hague Agreement. This is done by having an authority affix a stamp on the document to certify its authenticity. Anybody who has a public document that needs to recognised in another country can apply to have them affixed with The Hague Apostille. For further information about where to go for your country, see www.hcch.net.
In Spain, there are three authorities that can issue an Apostille, depending on the type of document:
- For documents issued by a judicial authority, the Apostille is issued by the Secretario de la Sala de Gobierno del Tribunal Superior de Justicia.
- For documents authorized by a notary or private documents with signatures legitimized by the notary, the Apostille is issued by the deacon of the Colegio Notarial.
- For documents issued by the national administration, the Apostille is issued by the Jefe de la Sección Central de la Subsecretaría del Ministerio de Justicia.
For further information and contact data, see the Ministerio de Justicia.
Inheritance in Spain
The challenging part of inheritance is the inheritance tax. If the deceased person is:
- a resident of Spain: If the heirs are non-EU, the Spanish national tax rate applies. If the heirs are resident in Spain, then the Spain regional rate where the deceased person lived at the time of death applies.
- Non-resident of Spain, but resident in the EU: If the heirs are non-EU, the Spain regional tax rate applies. If the heirs are residents of Spain, then the Spanish national rate applies.
- Non-resident of Spain and non-resident in the EU: The Spanish regional tax rate applies, meaning that after Brexit, if you inherit a property in Spain, you will be subject to the regional rate.
We can handle the inheritance procedures for you. We process the will, negotiate the proper division of assets, register the new ownership of properties in Spain, and respond to any other inheritance issues. The first steps are to know whether a Spanish will was ever drawn up, and whether the deceased was a resident or non-resident of Spain.
The procedure for dealing with property of non-residents after death
The first step is to establish the existence of a Spanish will. The Central Registry of Spanish Wills in Madrid should be contacted. If a will exists, the deceased's death certificate will be required in order to apply for a legal copy of the Spanish will.
A valuation of the deceased's estate in Spain will also be required.
If there is a Spanish will, then proceed with the administration of the estate in Spain. Only a notarised and apostilled copy of the death certificate is required.
If there is only a foreign will or intestacy, the following documents will have to be translated, notarised and apostilled before the administration of the estate in Spain can proceed:
- The death certificate
- The foreign will
- Grant of Representation or equivalent
- It may be necessary to provide a Certificate of Law to explain the law of intestacy in a particular country.
The legal formalities of transferring property to beneficiaries in Spain are completed before a Spanish Notary. The Notary ensures, for example, that the beneficiaries are entitled to the deceased's assets.
Inheritance tax for non-residents
Beneficiaries who do not have their usual residence in Spain are liable to this tax. Residents in Spain are also liable for this tax when the deceased person did not have their habitual residence in Spain.
The filing deadline for the inheritance tax return is 6 months from the date of death. Upon submission the Tax Agency will calculate the tax payable. Or, the taxpayer can opt for self-assessment, submitting the simplified form.
If a taxpayer who is required to make payment does not have a NIF, they must take the following steps:
Non-resident foreign national taxpayers must apply for a NIE, either from a police station that processes foreign nationals or from a Tax Agency office. The documents required to apply are:
- An authenticated photocopy of the passport of the taxpayer (the beneficiary).
- A photocopy of the Deeds of Acceptance of the Inheritance.
- A NIE application form.
- In the event of a taxpayer acting through a representative, the authorisation or power of attorney.
Non-resident Spanish taxpayers must apply for a NIF from a Tax Agency office by presenting the following:
- A Certificate from the Spanish Consulate in the country where you reside, confirming that you are registered on their Registry of Spanish citizens.
- An authenticated photocopy of the consular passport of the taxpayer (the beneficiary).
Types of Spanish wills
This is the usual form of will for most people in Spain. It is made before a Notary, who keeps the original document in his file. The Notary will send notification of the will to the Central Registry of Spanish Wills in Madrid.
This type of will is handwritten entirely by the testator. It must be signed and dated on each page by the testator. It must be verified as genuine before a judge. The deceased's closest relatives must verify the deceased's handwriting. Once this has been done, the judge will enforce the provisions of the will.
The details of your will are kept secret by placing them in an envelope. The testator must then declare the following before a Notary:
- that the provisions of the will are contained in the envelope.
- whether it has been written by a third party or by the testator.
- whether it has been signed by a third party or by the testator.
The Notary then seals the envelope and signs it. It is then filed by the Notary who informs the Central Registry of Spanish Wills.
Should I have a Spanish will made?
If you own property, yes. It is a slow and expensive process to get your foreign will recognized in Spain. For your heirs to get your Spanish property transferred to their names, the process is much simpler if there's a Spanish will. If there is no Spanish will registered at the Registro de Actos de Ultima Voluntad, then in the worst case, your property will pass to the local and regional government.
Before getting a will in place we need among other information establish your place of residence as it can affect the way the will is drawn out. All countries have their own system and limitations.
Is Spanish law applicable to my property?
When a foreign property owner dies with no will (intestate), Spanish law must be applied to their Spanish assets as a result. Be aware that this differs from countries such as the UK. The deceased in Spain must leave part of their estate to their compulsory heirs.
If however the property owner makes a will, they can bequeath their Spanish assets to anyone they please as long as the laws of their home country permit this. The Spanish Civil Code states that the assets that the foreign deceased had in Spain at the time of their death will be governed not by Spanish law but by their own national law.
What assets does my Spanish will cover?
The Spanish will covers those assets located in Spain. You should have a foreign will to cover any assets that you have in other countries. You must make sure that there are no legal conflicts between the application of your Spanish will and your will abroad.
What does your service include?
Once you discuss with us the full details of your intentions, we draw up the will, following your wishes to the extent possible, while adhering to requirements of Spanish law regarding wills. To be valid, this will needs to be notarized.
We will need you to:
- Provide the data for you, your heirs, and anyone else mentioned in your will.
- Choose a notary (or choose the location in Spain most convenient to you, and we will contact a notary there).
- Sign the will at the notary's office.
A copy will be given to you. The original will be kept at the notary's office (or successor's office), thus avoiding risk of loss or theft. In addition, the notary sends a report to the Ministry of Justice, simply notifying the Ministry that the will has been made, without disclosing the contents. That way, it can be known which is the deceased's last official will. The record is kept secret until the death of the testator. At that time, we can know what was the deceased's last official will, thus avoiding possible errors that could later prove serious.
What if I want to change the contents of the will later on?
To change the contents requires a notary, so you would need to go through the same process.
As a couple, can we have a joint will made?
No. You need a will done for each of you.
What happens if the deceased has not left a will?
When the deceased has not left a will, the Spanish Law of Succession determines who shall inherit in the following order:
- The descendants of the deceased inherit in equal shares.
- If there are no descendants, the spouse inherits.
- If there is no spouse, any brothers or sisters of the deceased inherit in equal shares. If any brother or sister of the deceased has predeceased and left children, the children inherit their parent's share in equal shares.
- If there are no brothers or sisters, nephews or nieces, then cousins, if any, inherit.
- Finally, if none of the above family members exist, then the deceased's estate is inherited by the Spanish Government.
There are a wide range of mortgage products available in Spain. Mortgages are sold directly banks or through mortgage brokers. It is very important to research the market, to ensure you find the best deal that suits your requirements.
What documents will the bank ask for?
The documents typically required by a bank are:
- Your DNI/NIE number. (You must get apply for a NIE number before you can buy a property in Spain.)
- Your contract of employment
- Your last 3 payslips
- Your latest income tax return
- Your pre-agreement with the seller
- Proof that the property tax (IBI) on the house is paid up
- Details of other mortgages or loans that you may have
- All property deeds, both in Spain and overseas
- Certificate from work authorities (vida laboral), showing your past work history
- Records of your current assets (bank/mutual fund statements, etc.)
- Prenuptial agreements, if any
- non-residents: A certificate of nonresidency (form available from the bank)
- If self-employed: Local tax on economic activities (IAE)
- If self-employed: Records of your assets during the last two years
- If self-employed: VAT tax you paid for the last quarter and last year
What are the main types of mortgage in Spain?
The vast majority are variable-rate mortgages, though you can also find fixed-rate and interest-only mortgages. In a variable-rate mortgage, repayments vary according to the Euribor, the base rate set by the European Central Bank. A typical bank offer might be "Euribor + 1.99%, with no opening fee, no cancellation fee, and a first-year fixed rate of 2.49%.
What is the typical length of a Spanish mortgage?
In the past lenders used to offer between 5-40 years.
How much can I borrow?
The lenders will decide this after reviewing your personal and financial profile. In general Spanish mortgage lenders give 60% of the value of the property to foreign buyers of Spanish property. The interest rates remain universal for residents and non-residents.
Are there additional costs when obtaining a Spanish mortgage?
Yes. These can be summarised as follows:
When purchasing a property with a mortgage there are two deeds that the buyer will sign. The first in the purchase deeds of the property and the second is the deeds whereby you are taking on the mortgage against the property.
Any costs related to the purchase of the property are covered by the buyer. The costs of notary, registration of the mortgage and taxes incurred will be covered by the bank.
Property Valuation Fee: Before granting a mortgage, a Spanish lender will require the property to be valued by one of their own appointed appraisers. The buyer is responsible for this fee.
Mortgage Opening Fee: Most banks are now assuming this cost although it is approximately 1%.
Mortgage Insurance: It is a legal requirement of Spanish mortgages that you obtain general house and contents insurance. Depending on your circumstances, you might also consider life and mortgage insurance.
Mortgage Early Cancellation Fee: Buyers should be aware of this as it varies between lenders.
Mortgage Notary Fee: If a Spanish house is to have a mortgage registered against it, this must be declared before a Notary. The Notary will charge for this. The cost is covered by the bank for the mortgage. The purchase deeds are covered by the buyer.
Spanish Stamp Duty: (known as AJD) is a tax on mortgages which is paid to the government. It is calculated as a percentage of the mortgage. The cost is covered by the bank for the mortgage. The purchase deeds are covered by the buyer.
Deed Arrangement Fee: The lender has a department (gestoria) to arrange for the deeds to be correctly registered at the Land Registry. The buyer is responsible for the fee.
Land Registry Fee: Following completion the buyer will incur the land registry fee for completing the Registration.