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Spain

Situated in Southwestern Europe, Spain is regarded as one of the world’s most popular holiday destinations. It is a vibrant country admired for its majestic landscapes and excellent quality of life and a nation with a rich history and unique culture and traditions. Spain has one of the most important economies in Europe. It is also a full member of the EU and the Eurozone.


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Country Information 

Spanish residents benefit from unrestricted travel across Europe, as well as the country’s high quality of life. Individuals living in Spain also have one of the longest life expectancies in the world.

Population:

47.2 million

Language:

Spanish

Economy:

Capitalist, with a balanced mix of manufacturing, services, and agri-food industries.

Currency:

Euro





Living in Spain



Spain remains a highly desirable location both for travel and residence. Its capital city Madrid and port city Barcelona are world-famous and draw millions of visitors to the country’s shores every year. The unique essence of Spain can be felt in its lively music and dance traditions such as flamenco, cuisine that is influenced by the seafood found in the waters that surround the country, and in the architecture of the sophisticated cities that inspired some of the world’s greatest artists.


A country that is as geographically diverse as it is culturally, Spain has a landscape that ranges from citrus orchards to snow-capped mountains, to hot beaches, to rugged hills. The climate is temperate, with hot summers and cool winters. Bordered to the west by Portugal, to the northeast by France, and to the far south by Gibraltar, Spain enjoys both Mediterranean and Atlantic coasts, and residents and citizens of Spain have easy access to the rest of Europe, Latin America, and North Africa — allowing for ultimate ease of travel.


Impressive legal system

The country employs a civil law legal system (with regional variations), which benefits both residents and citizens alike. Spain is a significant model for freedom and human rights, including those of the LGBTQIA+ community, with same-sex unions respected throughout the nation. Moreover, the country’s life expectancy rate averages at 82 years, which is a notably high rate worldwide.


Advanced economy and business landscape

Despite suffering a severe economic recession following the 2008 global financial crisis, Spain has recovered impressively, even recording consecutive years of GDP growth that is above the EU average. Its economy is the fourth largest of the Eurozone, and Spain was ranked an impressive 30 out of 190 on the 2020 Ease of Doing Business Index. Its industries are strong, with the textile and apparel (including footwear) industry a global leader in the fashion space. The Spanish economy is dynamic and rapidly growing.


Attractive tax regime for residents

Residents by investment do not become tax residents unless they spend more than 183 days per year in Spain. Non-residents are taxed in Spain only on Spanish-sourced income, in accordance with applicable ‘tax treaty’ provisions, which may result in lower tax rates on dividends, interest, royalties, and capital gains. Taxation depends on the nature of the income and on the investor’s tax residence status. A new regulation (the Beckham Rule) provides a flat tax rate for Spanish tax residents relocated from abroad during their first six years of effective residence.


Spain

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Benefits of a Spanish golden visa


  • High quality of life
  • Ability to include a spouse or unmarried partner, financially dependent children of any age (adult children must be full-time students), and financially dependent parents of the main applicant and/or their spouse who are 65 years and older
  • Access to the public healthcare and education systems in the country
  • A vibrant EU country that has majestic landscapes
  • The possibility to apply for Spanish citizenship after two years of effective residence for Sephardic Jews and their descendants, and for citizens of Ibero-American countries, Andorra, Equatorial Guinea, Portugal, and the Philippines
  • Top-tier international and private schools and universities teaching in both Spanish and English. Henley & Partners Education can assist in securing the best educational opportunities for your family


Spain golden visa requirements

The Spain Residence by Investment Program requires that a foreign individual fulfills one of the following investments in the country:

The acquisition of real estate with a minimum value of EUR 500,000 (one or several properties)
Investment funds, bank deposits, or listed company shares in Spanish financial institutions with a minimum value of EUR 1 million.
A government bonds investment with a minimum value of EUR 2 million
Documentary evidence of the investment must be provided as part of the application process.

Procedures for the Spanish golden visa

Applications to the program must be made through the prescribed forms and must be accompanied by the appropriate fees and supporting documents. Residence permits have an initial duration of three years and are renewable for five years upon request, provided that a minimum investment in Spain is maintained by the applicant.

The application process comprises two stages:

In the first phase, applicants apply in their home country for a Spanish residence visa that allows them to reside and work in Spain for one year.

In the second phase, applicants apply for a Spanish residence permit. If they have come to Spain on an ordinary tourist visa, they may apply for the residence permit directly, thus omitting the first phase.

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The residence permit applies to the main investor, spouse or partner (including unmarried or same-sex unions), and all economically dependent descendants.

There is no minimum stay requirement to maintain residence status but obtaining the first residence permit requires a visit to Spain.

Citizenship

Residents may apply for citizenship only in their 10th year of residence in Spain. However, Sephardi Jews and citizens of Equatorial Guinea, Latin America, and the Philippines can apply for Spanish citizenship after only two years of effective residence in Spain. Dual citizenship restrictions apply to most foreign nationals.




Spain Real Estate

Everything you need to know about acquiring premium real estate in Spain and linked to the Spain Residence by Investment Program


Minimum real estate investment

EUR 500,000

Type of​ ownership

Full Ownership

Rental income opportunity

3-5% on residential property

Holding period of real estate

Necessary to maintain and renew the residence permit

Spain real estate

As Western Europe’s second-largest country by area after France and with 7,000 km of coastline, Spain offers a vast and attractive real estate market. The country features 17 autonomous regions and many different locations with their own alluring features.

Property investors may choose from a sunny villa by the Mediterranean Sea to a cosy apartment in the lively central Madrid, to a traditional country house in the green north region, to a hideaway in a Pyrenees ski resort. Despite recent price hikes (with over 1.6% rise in 2020), the average real estate price in Spain is 36% below the peak of the ‘property bubble’ seen in April 2007, with some regions reaching 50%.

Acquisition of property in Spain

After a decade of price declines, property prices have started to recover in Spain since 2017, making now a perfect moment to step into this asset class. Price increases are expected in the coming years, in line with low interest rates in Europe and economic recovery in Spain. The possibility of high rental incomes is also an advantage in Spain, thanks to short-term tourist leases and the increasing tendency of locals towards rental housing. Historically, only 22% of permanent housing has been rental in Spain, compared with 49% in Germany and 36% in France. Governments have introduced incentives to encourage rental housing, and the population increasingly favors this more flexible option.




Are there any restrictions on the acquisition of real estate in Spain by foreign buyers?

No, foreign nationals can acquire property in Spain without any restrictions. Once they are provided with a local tax identification number and have a bank account in Spain, they may also apply for a mortgage-backed loan. ​

How can immovable property in Spain be acquired?

Properties must always be acquired before a Spanish public notary. The buyer may act in person or through a representative via a power of attorney. An acquisition is also possible through a holding company, but there are extra costs for companies domiciled in tax havens..

What additional expenses will the real estate transaction incur?

Buyers are required to pay a 4% title deed fee, along with a circulation capital fee based on the property’s value. The value cannot be less than the value in the appraisal report, which shows the actual value of the property. The revolving capital fee is determined as compensation for the services provided during title deed transactions and must be paid during processes such as the sale or transfer of the property. It typically ranges from approximately 10,000 to 15,000 Turkish Lira and is subject to change.

Does the applicant need to open a bank account in order to purchase property, and if so, what is the procedure?

An account in a local bank is necessary to settle the agreed price for the property because the seller would require bank cheques as the means of payment to transfer the property ownership. Besides, an account in Spain is useful to facilitate the payment of all property-related expenses and taxes. Opening a bank account in Spain usually takes a few weeks and requires some documentation about the holder for the bank (for example, an income certificate and a certificate of the source of funds). Having an account in a Spanish bank will also help the buyer apply for a mortgage-backed loan. Mortgage-backed loans to foreign borrowers are frequent in Spain and may reach 50% of the property value.

What kind of returns can be expected from property investment in Spain?

Returns vary depending on location, type of property, market conditions, and contractual terms. For housing properties, the average monthly rent in early 2021 was EUR 10.65 m2, with significant differences between regions (for example, EUR 14 per m2 per month in Catalonia versus EUR 6 per m2 in Murcia). The actual annual gross yield lies between 3% and 5%. If the property can be rented to tourists on short-term contracts, the annual yield may easily rise to 7–9%. However, this result is subject to holding a tourist license, which some regions and municipalities have made more difficult to obtain in recent years. Commercial properties have returns around 5–7% per year, reaching 10% in new businesses with high demand, such as self-storage centers, warehouses, and logistics facilities.

How is rental income taxed?

Assuming that the property owner is not a tax resident in Spain, the rental income is taxed with the annual non-resident tax, which has the following rates:

  • 19% for residents of the EU, Iceland, and Norway
  • 24% for all other residents

Only in the first case (EU residents), the owner will be entitled to deduct property-related expenses. However, if the owner’s country of residence has a double taxation agreement with Spain, the tax paid in Spain may be deducted in the home country. The same rules apply to properties owned through corporate vehicles abroad.

What other immovable property-related taxes and charges are imposed in Spain?

As a result of the 2008 financial crisis, Spain imposed an additional tax on properties of non-resident citizens for their own use (not rented). The measure has remained in place as it is also considered an incentive for bringing properties on the rental market. In this case, the annual non-resident tax with the rates mentioned above will be applied to a fictitious rent equal to 1.1–2% of the property’s cadastre value, depending on the location. If the property is owned through a company in a tax haven, the fictitious rent will amount to 3% of the cadastre value.

Spain Residence by Investment Program frequently asked questions

The Spain Residence by Investment Program, also known as the Spanish Golden Visa, offers residence to individuals and their families through significant economic contributions to the country.

Investment options include real estate purchases, investments in Spanish businesses, and contributions to government bonds.

Benefits include the right to live, work, and study in Spain, visa-free travel within the Schengen Area, and access to a high quality of life.

The minimum investment starts at EUR 500,000 for real estate purchases.

Processing times for residence by investment applications may vary. Please contact us to find out more.


Yes, the main applicant can include their spouse, dependent children, and dependent parents in the application.

There are no mandatory residence requirements, but applicants must visit Spain at least once during the first year and maintain their investment for a certain period.

Required documents include a valid passport, proof of investment, health insurance, a clean criminal record, and other supporting documents.

Yes, after maintaining residence for ten years, investors may be eligible to apply for Spanish citizenship.

Applicants must make a qualifying investment, submit the application with the necessary documents, undergo a due diligence process, and visit Spain to capture biometric data.