Below are some of the common mistakes that expats should be aware of when moving to Spain.
Not hiring a lawyer and failing to carry out Legal Due Diligence
One of the biggest mistakes expats can make when moving to Spain is failing to obtain independent legal advice.
While you are not always legally required to instruct a lawyer when purchasing property or dealing with other aspects of relocation, obtaining independent legal advice can help identify potential issues before you commit significant amounts of money.
A Spanish lawyer can assist with the relevant legal and administrative requirements. The Spanish lawyer will carry out the due diligence checks on the property and help identify issues such as outstanding liabilities, planning matters or problems with property ownership before they become costly problems.
Underestimating costs and ignoring regional tax differences
Buying property in Spain involves more than agreeing the purchase price. Buyers should also budget for taxes, notary and Land Registry fees, legal fees and, where applicable, mortgage-related costs.
As a general rule, buyers should allow an additional 10% to 15% of the purchase price to cover purchase costs, taxes and legal fees.
Spain offers a wide variety of regions, each with its own characteristics, cost of living and lifestyle. For example, new-build properties are generally subject to VAT (IVA) at 10%, while resale properties are generally subject to Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP), which varies between regions. For example, in Andalusia region the current rate is 7% (ITP). In other regions of Spain, the applicable rate may be higher and can reach 10%, depending on the relevant regional tax legislation.
Failing to account for these costs from the outset can leave buyers facing an unexpected financial shortfall.
Before committing to a property, it is advisable to research the area carefully and consider factors such as regional taxes and other municipality expenses, and the overall cost of living.
Delaying your NIE application and registration process
The NIE (Número de Identidad de Extranjero) is the identification number assigned to foreigners who have economic, professional or social interests in Spain. It is commonly required when carrying out various legal, financial and administrative transactions, including purchasing property and dealing with certain tax matters.
If you are planning to purchase a property or undertake other significant transactions in Spain, it is advisable to consider applying to obtain your NIE at an early stage.
Delaying the application until the last minute can result in unnecessary administrative delays and may complicate the process of completing a property purchase or dealing with other matters in Spain.
Regarding the registration process, it is also advisable to proceed immediately to avoid unnecessaries delays. The registration will provide important legal protection to the buyer.
Conclusion
Spending a little on independent legal advice at the outset can save you significant time, money, and stress in your property purchase. It is important to seek independent legal advice before making any major decisions and to avoid unnecessary costs, delays and stress.
At Nockolds, we are here to help you navigate the process with confidence and make your move to Spain as smooth as possible.