US and Canadian citizens are increasingly interested in buying property here in Spain due to our favourable climate, beautiful landscapes, rich culture, and relatively affordable property market. We are frequently asked whether there are issues for US and Canadian citizens in buying property in Spain. In short, the answer is absolutely not. There is no difference between US and Spanish nationals in the actual purchase but there is in terms of being able to live full time in the country.
I’ll look at the residence restrictions and then recap the buying procedure.
Residence Restrictions
The first thing to remember is that owning property does not automatically grant residency.
For those planning to stay in Spain for extended periods, a visa or residency permit will be necessary.
There are three possible visas for non-EU citizens wishing to reside permanently in Spain. We have written extensively about each of them. Click the title to go to the appropriate article:
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Golden Visa. For purchases of property in excess of €500.000. The Golden Visa enables holders to travel freely in the Schengen Area, to work in Spain or in any other country. It does not automatically imply fiscal residence, which may be important to some applicants.
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Digital Nomad Visa. Introduced for people who can work remotely whilst enjoying the culture and climate of Spain. Fiscal residence is mandatory, but highly preferential tax rates are offered. Particularly appealing for high earning freelancers.
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Non Lucrative Visa. Designed for retirees who have income from pensions, rents, dividends etc. from outside Spain. Work in Spain is not allowed. It has to be applied for outside Spain at the consulate nearest the applicant’s residence. Some consulates take the attitude that only passive income is allowed. That is to say, income from employment, even outside Spain, is disallowed.
Buying Procedure
1) Research and Select a Property
We will then negotiate the price and conditions on your behalf. Once these are established we will draft the Private Contract in Spanish and your native language.
2) Hire a Lawyer:
Hiring a local lawyer who specialises in real estate transactions is essential. We can recommend a good one (there are many lazy and even incompetent ones). We will send the Private Contract to your lawyer for his perusal, so he can make any changes he deems necessary. We will then agree those changes with the seller.
Once both parties are happy with the terms of the contract, they sign. This can be done remotely. You do not need to be in Spain as long as you have given your lawyer a Power of Attorney, which costs very little and which we strongly recommend. He will then be able to open a bank account for you and deal with the painful bureaucratic processes involved after purchase.
3) Loans
If you need to finance part of the purchase, let us know at the outset as it may have an influence on the property you buy. Spanish banks are cautious and very conservative. Don’t expect to borrow 80% or 90% of the purchase price plus costs. It won’t happen. We do not recommend you go directly to one bank and wait for their response. That can be a slow process. Better to let the experts deal with it. We will put you onto a specialist who knows which banks are prepared to lend how much at any one moment in time.
4) Complete Guide To Buying Procedure
For full information see https://www.anotherwayoflife.com/buyers/buying-procedure
And for the best way to prepare to buy see: https://www.anotherwayoflife.com/buyers/ten-step-guide-to-buying
5) Exchange Rate Fluctuation
The cost of your property acquisition will depend not only on how the market is moving, but also on how the exchange rate is moving. If you are planning to buy at a future date (say) six months ahead, it may be possible to lock into the current rate with a currency trader.
Here’s how the USD to EUR has moved over the past 5 years:
And here’s how the CAD to EUR has moved over the same period.
Conclusion
In conclusion, buying property in Spain as a US or Canadian citizen is a feasible and attractive investment, provided you work with anhonest agency that speaks Spanish, understands the process and all the underlying documentation necessary to guarantee a perfect and troublesome free purchase.