PROPERTY INVESTMENT

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After several years of price declines real estate is now at rock bottom prices and the Spanish property market offers considerable potential for capital gains in the coming years. Investors need to consider their purchase carefully. Is it for investment and rental or lifestyle? There are many offers on the market from developers and banks but location and property type is critical to the success of the investment.  Investors needing our services may wish to check our procedure or read more detail for the golden visa program in Spain. To contact us, speak to an expert and for further details on the procedures and our property portfolio enquire here.

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Non-Lucrative Residence Visa

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If you wish to immigrate in Spain and you have sufficient income to support yourself and your dependents, you may apply for a Non-lucrative residence visa. This visa does not entitle you to work in Spain.

You must have income of at least €25,560 annually, plus €6,390 per each additional family member. Income may be derived from investments, annuities, sabbaticals and any other sources of income. 

The visa issued will have a validity of three months and fifteen days, with multiple entries and 90 days of stay in Spain. Within one month of your arrival in Spain, you must apply for a residence permit and a foreign national identity card. 

The residence permit is usually issued for a period of 2 years, renewable, provided that you still meet the economic requirements and you have lived at least 183 days in Spain each year.

After 5 years of holding the temporary residence permit, you will be eligible for permanent residency. 

The permanent residency will entitle you to live and work in Spain indefinitely. 

After 10 years of legal residency (temporary or permanent) you may be eligible for naturalization. To become a Spanish citizen, you will be required to commit to renounce your previous nationality, have financial stability, no criminal record, attend an interview and prove your degree of integration into Spanish society, e.g. knowledge of Spanish language, culture, values and participation in Spanish social activities.

Note that nationals of the Philippines, Andorra, Spanish-American countries, Equatorial Guinea, Portugal, as well as individuals with Jewish Sephardic origin, may be eligible for citizenship after two years of legal residency.

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Requirements

 

- Not be in Spain with irregular immigration status.
- Be over 18 years old.
- Evidence of economic means sufficient to support your stay and, depending on the case, to support your family, during the length of stay you are applying for, without working.
- Negative criminal record issued in the last three months by the authorities of the country or countries where you have resided in the past 5 years.
- Medical insurance subscribed with a company legally entitled to operate in Spain.
- Notarized document explaining why you are requesting this visa, the purpose, the place and length of your stay in Spain and any other reasons you need to explain, with a certified translation into Spanish.

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Restricted Nationalities

 

European Economic Area

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Dual Citizenship

 

Spain only recognizes dual citizenship for nationals who have acquired Spanish nationality at birth. Naturalized citizens must renounce their previous nationality, except those from countries with which Spain has concluded a double-nationality agreement. Currently, citizens of the following countries may become Spanish naturalized citizens, without giving up their previous nationality: Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Equatorial Guinea, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Puerto Rico, El Salvador, Uruguay and Venezuela.

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Documents Required

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• Original and photocopy of passport

• Medical Certificate

• Original Police Clearance Certificate

• Proof of income

• Evidence of Health Insurance

• Receipt of payment of fees

• Notarized document regarding purpose of stay

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Taxation in Spain

 

To be a tax-resident in Spain, you must spend more than 183 days in the country during a calendar year or have your center of economic activities located there, if it is not stated otherwise in a tax treaty.

Tax-residents are subject to Personal Income Tax on their worldwide income. 

PIT is levied at progressive rates by the state and each autonomous region. The lowest combined top marginal tax rate is 43.5% in Madrid (on annual income exceeding €60,000), and the highest is 48% in Catalonia (annual income exceeding €175,000.20) and Andalusia (annual income exceeding €120,000).

Savings income is taxed at progressive rates between 19% and 23%. This includes capital gains and investment income such as dividends and interests. Rental income is taxed at personal income tax general rates.

Non-residents are subject to Non-resident income tax at a flat rate of 24% on income from Spanish sources. If a non-resident is a resident within the EEA that has concluded a tax exchange of information agreement, he or she will be subject to a reduced rate of 19%. Regarding dividends, capital gains and interests, they are subject to a 19% tax, unless the tax rate is reduced under a tax treaty.

Spain has enacted extensive controlled foreign company (CFC) rules, under which income retained in a non-EU controlled foreign company may be attributable.

Municipalities levy a real property tax up to 1.3% on the cadastral value of property. Transfer of real properties, which are not subject to V.A.T., may be taxed at a 6% tax rate, although this may vary according to each autonomous region.

Inheritance and gift tax ranges from 7.65% to 34%, although it may be higher in some autonomous regions. 

Net worth tax is levied at progressive rates between 0.2% to 2.5%. Each autonomous region sets its own minimum amount exempt and its own scale rates. Madrid does not levy net worth tax.

The V.A.T. standard rate is 21%. Certain goods and services are taxed at 10%, 4%, 0% or are exempt. Regarding corporate taxation, resident entities are subject to 25% income tax on their worldwide income.

Please Note: This should not be construed as tax advice. Flag Theory | Passports.IO has access to a global network of qualified attorneys and accountants who can give you the proper advice for your particular circumstances. Contact us for further information.

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COMPARE GOLDEN VISA PROGRAMS

 

Spain is not the only country in Europe offering a golden visa program and residence permit through real estate investment. Visit our pages on Portugal and  Greece to compare the immigration investment requirements and benefits of their golden visa residency programs and also the citizenship by investment programs in Cyprus and Malta.

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