Introduction to the Spanish Golden Visa

For decades, Spain has stood as a magnet for foreign investors, especially drawing the attention of European and British buyers in search of idyllic holiday homes in a warmer climate. However, since 2013, the country has undergone a transformative shift in its appeal to global investors with the introduction of the Spanish Golden Visa programme. This initiative has transformed Spain into an enticing destination that offers a comprehensive package, combining lucrative real estate investment with the added bonus of residency visas. Now, investors from every corner of the world are drawn to the prospect of not only owning property in Spain but also obtaining a valuable residency permit. This permit grants the freedom to travel seamlessly to Spain with the added perk of spending up to 90 days out of 180 days within the Schengen Zone. In this guide, we will unravel the intricacies of buying property in Spain, providing a roadmap for investors keen on making Spain not just a holiday destination but a second home with lasting residency benefits.

Spanish Golden Visa Programme Overview

  • A minimum real estate investment of €500,000.
  • Include your whole family; Spouse, dependent children + dependent parents.
  • Receive Spanish Residency within 2-3 months.
  • Low government fees and renewal fees.
  • Complete free choice of real estate options.
  • Visa free travel throughout the EU Schengen zone.

Spanish Real Estate Market.

Spain’s property market has exhibited resilience and attractiveness to both investors and individuals seeking a second home. Popular areas for property investment include coastal regions like the Costa del Sol and Costa Blanca, offering a sunny Mediterranean lifestyle, and Barcelona and Madrid, known for their vibrant culture and economic opportunities. The Balearic and Canary Islands also draw attention, particularly Ibiza and Mallorca. The market has seen an increased demand for modern, energy-efficient properties, and coastal areas remain sought after for vacation homes. It’s essential for potential buyers to consider factors such as local amenities, transportation, and potential for rental income

Commercial or Residential Real Estate

Golden Visa buyers in Spain have the flexibility to invest in either residential or commercial properties, with the option to purchase a single or multiple units, as long as the total investment meets the minimum threshold of €500,000. Commercial properties typically attract lower transfer taxes compared to residential ones and often yield higher rental returns. Depending on your investment goals and whether you plan to utilize the property, the choice between residential and commercial properties can significantly impact profitability. La Vida recommends this unique commercial investment model to Golden Visa investors, featuring an upfront yield and guaranteed buy-back from the developer. This approach minimizes the overall investment outlay to just €350,000, plus fees, making it an attractive option for those seeking a passive, lower-cost route to obtaining the Golden Visa. If however you envisage yourself buying a residential property, perhaps a luxury vacation home along the coast then La Vida has access to a wide portfolio of properties to meet your criteria.

Spanish Mortgages

Foreign investors may want to consider taking a Spanish mortgage. Usually, a maximum loan to value of 60-70% for non-Spanish residents. However, it is essential to note that the initial €500,000 euros, a prerequisite for obtaining a Golden Visa, must be a cash investment and cannot be financed through a mortgage. For properties exceeding this minimum requirement, investors have the flexibility to leverage a Spanish mortgage for the surplus amount. For instance, if a property is valued at €750,000, the investor is required to make a cash investment of €500,000. Subsequently, they can explore Spanish mortgage options to cover the additional €250,000. Spanish mortgage interest rates are currently around 3% – 4%.

Property Acquisition Costs and Taxes

Understanding the costs associated with purchasing a property in Spain is crucial for investors. Generally ranging between 11% – 14% of the property’s purchase price, the closing costs vary based on the region and property type. Additional expenses include obtaining an NIE number and connecting utilities. Below is a summary of the main purchasing costs to budget for. Note that some fees will vary if the asset is considered residential or commercial.

Acquisition Fees
Average fees, variable on region.
Notary fees 0.5%  – 1% of the purchase price
Land Registry fees 0.5 -1% of the purchase price
Legal fees 1 – 2% percent plus VAT
VAT (New build only) 10% VAT,  plus 1.5% stamp duty (AJD tax)  (Total 11.5%)
Residential Transfer Tax (ITP) 6% – 10% of the purchase price
Commercial Transfer Tax 1.5 – 2.5% of the purchase price

Golden Visa and Legal Fees

Spanish Lawyers will typically charge a set fee to assist you with both your property acquisition and the Golden Visa application process. Typically, these can be around €4,000 – €5,000, depending on the legal company and the level of service you may require. You will also need to factor in legal fees for every golden visa renewal. Lawyers will charge approximately €1,500 for each renewal. The governments fees for the Golden Visa permit are the lowest in Europe. The Golden Visa permit is just €73 per person, and renewals are just over €78 per person.

Spanish Income Tax Requirements

Holding a Golden Visa doesn’t automatically make you a tax resident. As a Golden Visa holder, you are not obligated to pay tax on your worldwide income unless you choose to become a tax resident by residing in Spain for a minimum of 183 days per year. If you remain a non-tax resident, you would be subject to a 24% income tax on any income earned in Spain, such as rental income from properties. See our full guide on Spanish taxation for more info.

Buying Process and Golden Visa Timeline

Typically, most real estate purchases can be completed within 2-3 months from the date you place a reservation deposit on the property. Reservation deposits will vary but are usually around 10% of the overall property price. Once you have signed your public deed, your lawyer can then start the process to submit your Golden Visa application. Spain is one of the fastest countries in Europe to process a Golden Visa residency permit. Once the application has been submitted, the Spanish Consulate will respond within 21 days of submission and successful applicants will receive a one-year temporary residency permit in their passport. In the months following, applicants will need to visit Spain to submit their biometric data and start the application for the TIE, which is the next three-year residency card.  This can be renewed after three years and then every five years following.

Citizenship through the Spanish Golden Visa Programme

Spain’s Golden Visa programme is not a citizenship programme. However as per Spain’s naturalization law, after a decade of continuous residency, individuals are eligible to apply for Spanish citizenship and acquire a Spanish passport. Notably, there exists an expedited path to citizenship, reducing the waiting period to just two years for citizens of specific nations. This streamlined process is available to nationals from countries which are former Spanish Colonies, such as Mexico, Brazil, Peru, Argentina, the Philippines, Cuba, Bolivia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Venezuela, Panama, and Paraguay.

To find out more about the Spanish Golden Visa programme and how the buying process works, arrange a free consultation with our expert advisors.

Tags: golden visa guides, spain

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