Real Estate Investment

Why do I need a Spanish bank account?

If you want to buy a property in Spain, you will need to open a Spanish bank account. You will also need it to pay utility bills and taxes.

There are two types of accounts in Spain: resident accounts and non-resident accounts.

A Spanish resident is a person (Spaniard or foreigner) who meets the following requirements:

1. Resides in Spain for more than 183 days in a calendar year;
2. Has a center  of economic interests in Spain (business, real estate);
3. In the event that his/her spouse and minor dependent children reside in Spain.

The main criterion for classifying a person as a resident of a particular country is the first one – actual residence in the country for more than 183 days a year, but paragraphs 2 and 3 are also essential.

These rules are universal. The laws of other countries, including yours, provide for similar requirements for recognizing a person as a tax resident of their country.

Thus, if you are a permanent resident of Spain, then you open  a bank account on an equal basis with Spanish citizens, as a resident.

If you do not plan to live in Spain for more than 183 days a year, then you need to open a non-resident account, which is absolutely possible and usually does not cause any problems if you prepare all the necessary documents. The easiest way is to open an account with a large Spanish bank BBVA, if necessary, our staff will help you with this issue.

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How do I open a bank account?

There are several banks in Spain that open accounts for non-residents. These are banks: BBVA, Caixa, Santander, Bankinter  and some others.

Each of them has its own requirements for the package of documents, however, everything the bank wants to know about you comes down to three questions:

• Where do you get your money from? It is important for the bank to understand that you have earned or acquired your money honestly and, very importantly, have paid taxes on it. Therefore, he will ask you to show where you  got the money that you are going to transfer to the Spanish bank. As evidence, a certificate of 2 personal income tax returns (income tax return of your country), tax returns, a gift agreement, a certificate of  inheritance are suitable.
• What are you doing at the moment? You work, do business, are retired, or even do nothing and do not plan to do anything in Spain (and therefore, for example, you apply for a residence permit without the right to work). To do this, you can provide a certificate of employment, a certificate of OGRNIP for individual entrepreneurs, etc.
• Why do you want to open a bank account in Spain? It is important for the bank to understand why a foreigner needed to open a bank account in Spain. Therefore, the purchase of  real estate  is just such a justification, and the real estate reserve agreement signed by you confirms the need to open an account.

One of the most loyal banks to the citizens of the CIS is BBVA.

To open an account with BBVA bank, you will need:

• Real Estate Reserve Contract. This is a document that has the value of a preliminary contract, which is concluded between the developer (seller) and the buyer, indicating the main terms of the transaction. At the time of signing the reserve contract, the buyer pays the seller a small amount of money (usually 5-10 thousand euros) to confirm the intention to buy the property.
• Certificate of employment indicating the position held, length of service, salary.
• 2-NDFL certificates for the previous two years.
• Individual entrepreneurs provide a Certificate of Registration of Individual Entrepreneur (OGRNIP) and a tax return for the previous two years.
• Passport 

In other banks, you may be required to:

• A certificate that you are not a resident of Spain. This document can be obtained from the Spanish police station or the foreigners' office, or in your home country at the Spanish Consulate. Production time is about 10 days.
• The NIE  is a foreigner's registration number that can be obtained from the Spanish Consulate in your home country.

All documents must be translated into Spanish by a sworn translator. You can find such a service at the Spanish Consulate in your country, and our manager can also help you with the contacts  of a sworn translator in Spain.

How to avoid being declared a resident of Spain if you don't want to

Importantly. This information is only relevant for those who really need to maintain their tax residency if it provides a lower tax rate than in Spain. If this is not important for you, you can safely skip this section.

• Comply with the rule of staying in Spain for less than 183 days. At the same time, it is the actual stay that matters, not the planned one. For example: if you decide to depart from Spain on the 183rd day, and your flight is delayed, and you actually spent 184 days in Spain, this is no longer good in your case. To control the number of days spent in Spain, there are convenient applications on the phone, for example, the free Schengen app
• Since no one stamps your passport when crossing borders within Europe, it will be useful in your case to visit a police station in another country yourself and ask for a stamp of entry and exit from this European country. Accordingly, you will be able to confirm to the Spanish authorities that you were absent from Spain during these days.
• At the beginning of each new year, take a certificate confirming that you are a tax resident in your country from the tax office of your country.

How to choose a good real estate option for investment?

Formulate your goal.  You want to obtain an investor's residence permit and keep your tax residency; transfer children to a warm climate and earn money on the rental business; ensure the right to work in the European Union for adult children;  Do you want professionals to take care of your property in Spain and transfer income to you every month, or do you just want to "bury a golden bucket" in the European Union... Different properties are suitable for each purpose. So start with your goal.

Decide on the location. Go on a trip around the country, try on every city or village as a tourist. Will you feel comfortable here? Is this  the place you would like to visit? Put yourself in the shoes of a guest, your tenant, or a future buyer.  And don't forget that life isn't just about money, it's also  about the quality  of your family's life. Goals may change over time, and you may want to use your investment home for your vacation yourself.

Don't rush to make a choice. Yes, good objects are "leaving", but some objects will be replaced by others. You won't find really interesting investment options in public databases. What is available to everyone is usually less cost-effective. Give us a task and we'll look for what you need.

Consider. Calculate taxes, utility bills, transaction costs,  rental income, inflation, currency fluctuations.

Compare. Compare the weather, sea temperature,  traffic on the roads, the contingent of residents, the level of security, the rating of schools in the area, the distance to the airport, infrastructure and entertainment in the city. Compare the liveliness of the city  and the presence of tourists  in both summer and winter.

Consult a lawyer and an accountant.  The first thing to do in a foreign country is to get acquainted with a lawyer and a tax advisor. Such a simple recommendation will allow you to find the right solution for the implementation of your goals, save money and nerves. Timely consultation costs a completely reasonable amount of money, but allows you to avoid wrong actions. Ask all your questions. Specialists will give detailed answers to those questions that you may not have asked yourself right away. If you need the advice and contacts of a lawyer and tax advisor who speaks your language, we will recommend you specialists who have been advising us and our clients for many years.

Make a decision based on your experience. An agent is your representative on the ground, thousands of kilometers away from you. Therefore, it is important to choose a person or company that you will trust, who will not only show you real estate and attractions, but  also  help you build a personal strategy depending on your task.  At the same time, if you have decided to invest in overseas real estate, it means that you already have your own accumulated experience and business intuition.

New building or resale?

The secondary property is suitable for those who want to quickly start renting it out and earn money almost immediately after purchase. The quick launch of the facility is an undoubted advantage of investment housing.  However, such housing increases less in value and the opportunity to earn money is almost exclusively on rent. At the same time, the secondary property is in a good location and does not fall in price over the years, which is also an advantage.

The advantage of a new building is that by the time the construction is completed, the price of the property will increase by 10-20%, despite the fact that you invest  only  25-40% of your own funds in installments at the construction stage. New housing always attracts the attention of tourists, taking into account modern technologies and construction standards, so it is easier to rent. With that said, over time, you can make money on both the increase in value and the rent.

By the way, it should be noted that in Spain it is customary to rent out renovated apartments. Therefore, when you receive the keys, all you have to do is order furniture and hang curtains. We will provide you with a complete preparation of the property for rent, including, if necessary, the services of a designer.

Why is it profitable to invest in a new building in Spain?

Ask any developer in the CIS about the procedure for paying for real estate. The answers will not surprise you with variety: "Pay 100% of the cost and wait three years for the construction to be completed." If you plan to borrow, you will pay a mortgage for all these three years while the construction is underway.

In Spain, the situation  is completely different, and it is worth taking advantage of this. According to the law, the developer is prohibited from accepting 100% payment until the completion of construction and commissioning of the house. Therefore, at the construction stage, the buyer pays 25-40% of the cost of the property. As a rule, this amount is paid in interest-free installments  for up to 6 months. And only after the object is built, put into operation, all the documents are drawn up and the developer completes the repairs in the apartment,  the buyer must pay the rest of the amount. At this point, the buyer decides whether he will pay with his own funds or with a mortgage. You will start making mortgage payments only from the date of the transaction.

On the day of the transaction, the buyer makes the final payment to the developer, receives the keys and can immediately move into his new home.

Thus:

1. The investor invests only 25-40% at the construction stage, not 100%.
2. There is no situation when the house is still under construction, and the buyer is already paying the mortgage.
3. You get a completely ready-to-move apartment with renovation, kitchen furniture and appliances, as well as all plumbing
4. You live in your house or apartment from the first day of the final payment.