Spain residence permit by buying real estate

Although there are no restrictions in the law on purchasing commercial real estate or land, most investors buy residential property. A registered residence address is a prerequisite for obtaining a residence permit.

The standard package of documents has to be attached to the application. If the property has been purchased and registered, a notarized purchase and sale agreement and a certificate of registration of ownership are required. If only the deposit has been paid, a preliminary agreement and a bank statement showing the required amount must be attached.

The application can include a husband or wife and children under 18, as well as adult children and parents, as long as they are financially dependent on the main applicant. Partners in a civil marriage can also obtain a residence permit upon confirmation of family relations. Other family members can also be added to the program later.

The documents are submitted to the Spanish Migration Service in person. This can be done in one visit to the country. Entry is allowed with a special investor visa.

An application for a residence permit is considered over a period ranging from twenty days to one-and-a-half months. A temporary residence permit for six months can be obtained after the conclusion of a preliminary contract for the purchase of real estate.

Basic requirements and documents:

1. Age over 18 years old.

2. Completed and signed applications.

3. Two 3,5 × 4.5-cm color photographs on a white background.

4. Existing passport valid for at least 1 year.

5. Photocopies of all passport pages.

6. No criminal record in Spain or in any country where the applicant has lived for more than 5 years.

7. The absence of a ban on entry to other countries with which Spain has signed visa-free agreements.

8. Legal presence in the country.

9. Public or private health insurance valid for at least a year.

10. Payment of visa processing fee.

11. Proof of investment: extract from the cadastral register of the property and purchase and sale agreement.

12. Proof of financial independence. The amount required is calculated case-by-case based on the IPREM indicator, which in 2021 is €564.9. For example, for a family of three, the applicant’s bank account must have a balance of at least €41,000.

The first time the residence permit by investment, Autorización de Residencia para Inversores, is issued for 2 years, then it can be extended for another 5 years.

Individual cost calculation for residence by investment in Spain

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If the property does not meet the conditions of the program in terms of price or was acquired many years ago, a foreigner may be issued a residence permit without the right to work, Residencia Temporal No Lucrativa.

What is the difference between a residence permit, permanent residence, and citizenship, and how to get them

Requirements for obtaining a residence permit without the right to work:

1. Own or rent residential property in Spain.

2. Sufficient finances for living on: the applicant needs to confirm an account balance exceeding IPREM multiplied by 400% for each month of their stay in the country as a residence permit holder.

Each case is considered individually. For example, an applicant may be rejected if they are not in a position to integrate into the local community: they do not know Spanish at the basic level, do not understand local customs and traditions, and cannot form a relationship with their neighbors. Applications for a residence permit by investment are not subject to this requirement.

After five years of moderate growth from 2015 to 2020, the property market cooled off rapidly in the economic recession caused by the Covid‑19 pandemic. However, Spain appears to be a viable investment destination again as yields are rising.

Prices have still not recovered to pre-crisis levels: in the period from 2007 to 2015, prices fell by 40% and since then have grown only 2‑3% per annum.

Many properties are being built specifically for investors. Resort real estate, which usually belongs to the elite class, is in demand. Villas are available for sale in the Balearic Islands, Costa Brava, Costa Dorada, Costa Blanca, Alicante, Benidorm and other cities on the coast.

The total transaction costs for buying real estate in Spain range from 10 to 15% of the purchase price. This includes the property transfer tax, ranging from 6 to 10%, depending on the region and the commission charged by the real estate agent. In addition, value-added tax and stamp duty are charged for a new property. For example, for real estate costing €500,000, the additional cost is between €50,000 and €75,000.

One of the main advantages of the investment program is that the investor is not required to live in the country permanently. In order to maintain and extend a residence permit, the investor needs to spend 183 days a year in Spain. They are free to spend the rest of the time in any one-year period abroad or in their country of origin.

After another 5 years (in total after 10 years), investors can apply for Spanish citizenship. For citizenship, they will need to prove continuous residency, pass a basic language test and show their link with the country.

Under the terms of the program, real estate must be kept in ownership for 5 years after obtaining a residence permit. After that, it can be rented out or sold and the initial investment returned to the investor. As long as the investor continues to own the property, they will be able to renew their residence permit an unlimited number of times.

Investing in real estate is one of the best ways to obtain a Spanish residence permit. We have listed its main advantages below:

• the application is considered quickly: it takes from 20 days to 1.5 months;

• a residence permit in Europe can be obtained for the whole family immediately;

• it is sufficient to live in the country for 183 days a year;

• visa-free entry and travel in the Schengen countries;

• the right to work or conduct business in Spain;

• pleasant warm climate and popular resorts;

• the standard of living is higher than the European average;

• access to a high-quality medical system;

• opportunity to open accounts in Spanish banks.

There are several programs in the European Union that allow an applicant to get a residence permit by investment in real estate.

For example, in Portugal there is a lower minimum investment amount and more investment options, and citizenship can be obtained after 5 years. In Greece, applicants have the choice of purchasing a property or signing a long-term rental agreement.

For those who need to get an EU passport faster, we recommend taking a closer look at Malta Citizenship Program. Obtaining a passport requires a substantial investment, but an application for citizenship can be submitted a year or three years after obtaining a residence permit.