Buying Property in Spain to get Residency
Buying a property in Spain to get residency. Traveling freely to and around the European Union is a dream for many of us. Would you like to visit Europe, travel around freely to see cities like Barcelona or Alicante in Spain, or simply enjoy the European way of life? Everything you need to know about buying a property in Spain to get residency.
Both Spain and Portugal offer a free Schengen visa for Europe if you buy a property above a minimum value. For many people this is an opportunity to make a dream come through. You can either buy a property as an investment or for your own use, to qualify and benefit. Everything you need to know about buying a property and obtain a Golden Visa for Europa
Read also: Buy a Property and obtain a Golden Visa for Europe
Benefits of a Schengen zone residency permit
Holders of a Schengen zone residency permit enjoy the following benefits:
The 26 countries making up the Schengen zone are:
3. Czech Republic
While Iceland, Norway, Switzerland and Liechtenstein are not a member of the European Union (“EU”), they are Schengen countries. Hence, a holder of a Schengen residency is able to travel freely to these countries as well.
At present, four more countries have applied to join the Schengen zone. These are Andorra, Bulgaria, Romania and Croatia. Until their application process is complete, passport controls remain in place for travel to these countries.
The Schengen zone does not include Ireland and Cyprus, even though they are EU members. The United Kingdom was never part of Schengen and has recently left the EU as well.
Comparison of residency alternatives
Below you will find a table that summarizes the main components and some important decision criteria for buyers/investors. Below the table you will find a more detailed overview for each of the countries.
* Portugal investment minimum starts at €280,000 goes up to €500,000 for biggest cities. Portugal will change investment rules from the start of 2022. See Portugal section below for more information.
Golden visa Spain
Spain’s visa program was established in 2013 to encourage investment by foreigners to boost economic prosperity. Under the program, investors and their families who invest at least €500,000 in Spain are offered an easy and quick way to obtain a Spanish residence permit. Spain offers a fast-track to citizenship for applicants from the Philippines and (most) Spanish speaking countries in Latin America.
After five years of living in Spain, investors can apply for permanent residency. Citizenship in Spain can be obtained after ten years (to qualify, applicants must have resided in the country for at least 6 months every year). Once applicants have either permanent residency or citizenship, the investment is no longer required. The Spanish visa application process is known for its speed and clarity.
Its main benefits are the fast processing time (within 60 days) and family residence plans. Your spouse and children under the age of 18 are guaranteed residency permits. Other family members can also obtain residency, provided documents can be presented that demonstrate they are your legal dependents.
Golden visa Portugal
Portugal’s visa program started in 2012 and has the following benefits:
The Portuguese visa program is more flexible than the Spanish program when it comes to eligibility of family members. It includes:
From 1 January 2022, the Portugal Golden Visa program will change. The minimum investment threshold to qualify for residency will increase to €500,000. In addition, new real estate investment restrictions will kick in. Properties in Lisbon, Porto, and other high-density coastal towns will not qualify for property investments under the Golden Visa scheme anymore.
People often ask us for our advice. Our answer is simple: if you are looking to get a European passport and an optimized tax solution, the answer is Portugal. If you want to own a property to live or invest in, we recommend Spain.
We believe Spain has the most economical potential in comparison, mainly because of the higher population numbers and better infrastructure. Within Spain, we favour Valencia and the region immediately south of it. Valencia is the third city in Spain and is about to be discovered as a tourist destination. It has an old city centre, a wonderfully large (and car-free) city park, a large beach, many museums and some impressive modern architecture.
The region south of Valencia includes the towns Denia, Javea and Calpe. They are part of a coastal area called Costa Blanca and are upcoming destinations for higher-end tourism. Especially Javea and nearby Moraira are our favourites. Both Denia and Javea also offer some great international schools, for all ages. This region is also well-connected to the international airports of Valencia and Alicante, which can both be reached in approximately one hour by car. The island of Ibiza is also located nearby and can be reached in 30 minutes by ferry.
The choice to where you buy a property is yours to make and we are happy to help you find your ideal property.
Golden Visa Frequently Asked Questions
What are the requirements for a golden visa?
In addition, Spain applies some additional conditions:
Do I need to live in Spain to get a golden visa?
There is no need to officially live in Spain to enjoy the golden visa benefits, unless you plan to apply for full Spanish citizenship in the future. In that case you are required to spend 6 months per year in Spain.
What are the tax implications?
We provide a summarized overview below, but in principle the following applies:
There’s also an option to register as a fiscal resident for tax purposes in Portugal, which allows you to benefit from Portugal’s Non-Habitual Tax (NHR) Regime. NHR is a generous tax program with numerous benefits pertaining to your global income. It offers tax-free incentives on certain categories for a period of up to ten years. Types of income that may qualify under the NHR program include: dividends, real estate income, capital gains from the disposal of real estate, pensions, royalties, business/self-employment profits
What are the legal cost to apply for a golden visa?
What other cost should I expect?
Most of our clients want to buy a new property, which still has to be built. In addition to the purchase prices, there is a transfer tax of 6%. For existing properties, the transfer tax is slightly higher than for new properties: 10%. While the legal fees vary, these typically are 4% of the purchase price. In other words, if you buy a new property, you should expect to pay 10% in total fees. For an existing property this is around 14%.
How long can I travel within the Schengen area?
With a valid resident permit you are free to travel to any country in the Schengen area. You may spend up to 90 days in each 180 days period outside of the country that issued your residence permit. These are the same rights as nationals in the Schengen countries.
Any other questions? Please contact us!