Does Buying Property in Spain give you Residency

Does Buying Property in Spain give you Residency

Does buying property in Spain give you residency? The Spanish Golden Visa grants automatic residency in Spain when you purchase property for 500,000€ or more. This can be any type of property: home, commercial, land, or a combination of properties. The golden visa does not require you to be in Spain 183 days of the year.

The Golden Visa for Spain is a residence visa issued to a non-EU national who intends to make a significant investment in the Spanish economy. The visa offers the holder and their family members residency in Spain and visa-free access to the Schengen Zone. In most cases, Spain Golden Visas are issued to someone who purchases real estate. However, they are also available to businessmen who invest in a Spanish company, which is why they are referred to as Spain Investor Visas as well. Spain Golden Visa is neither a visa nor a citizenship program. The program offers residency permits to those that invest in Spain. It is not designed as a program for outsiders to get citizenship.

Read also: Buy a Property and obtain a Golden Visa for Europe

Do you get a residency when buying a property in 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.

Benefits of a Schengen zone residency permit

Holders of a Schengen zone residency permit enjoy the following benefits:

  • Travel visa-free. You can travel freely to all countries within the Schengen area
  • EU rights. You are free to live, work and study in your country of residency
  • Security. A safe place to go to in times of economic or political uncertainty

  • The 26 countries making up the Schengen zone are:

    1. Austria
    2. Belgium
    3. Czech Republic
    4. Denmark
    5. Estonia
    6. Finland
    7. France
    8. Germany
    9. Greece
    10. Hungary
    11. Iceland
    12. Italy
    13. Latvia
    14. Liechtenstein
    15. Lithuania
    16. Luxembourg
    17. Malta
    18. Netherlands
    19. Norway
    20. Poland
    21. Portugal
    22. Slovakia
    23. Slovenia
    24. Spain
    25. Sweden
    26. Switzerland

    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.

    Golden Visa Spain and Portugal
    Buying Property in Spain to get residency

    * 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.

    Recommendation

    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?

  • You are not already a citizen of the EU, Switzerland or the European Economic Area
  • At least 18 years old
  • Qualifying investment
  • Clean criminal record
  • Spend a minimum of seven days in Portugal for the first year, then no less than 14 days each subsequent two-year period (this is called the stay requirement)

  • In addition, Spain applies some additional conditions:

  • A valid medical insurance and an official health certificate
  • Must have enough funds to reside in Spain

  • 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:

    Spain

  • Annual property taxes are typically around €200-400
  • Income tax is only applied if you are resident in Spain for over 183 days.
  • Any (rental) income derived from the property is taxed at 24.75%
  • Capital gains taxes are between 24-27%.

  • Portugal

  • Visa holders don’t need to pay taxes on income produced outside of Portugal, if this income is already taxed elsewhere
  • Any Portuguese-sourced income would be taxed at a flat rate of 20% during the first ten years
  • You can also pass on your wealth to a spouse or dependent without incurring inheritance or gift taxes.

  • 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?

  • Spain. Legal costs are normally around €9,000 for a family of four for the initial application and €2,500 for each renewal.
  • Portugal. Government fees per family member for application of the Portugal golden visa are €5,173.60. Renewal fees every two years apply at 50% of those rates. In addition there is a processing fee on application and renewal of € 520.40 for the main applicant plus € 80.20 per family member. Dependents younger than 18 years-old will be included free of charge.

  • 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!

    Related posts

    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...

    Continue reading

    Buying Property in Spain NIE Number

    A NIE (Número de Identidad de Extranjero) is required for almost everything in Spain, and applying...

    Continue reading

    Buying Property in Costa Blanca Spain

    Buying a property in Costa Blanca in Spain. How to make your dream a reality, with advice on legal...

    Continue reading
    × How can I help you?