According to Article 9(1)(a) of the Spanish Income Tax Act (Spanish Income Tax Act), a person has their habitual residence (residencia habitual) in Spain if they stay in Spain for more than 183 days of a calendar year (aňo natural). They are subject to Spanish tax law, including for German occupational pensions and other retirement income. However, this also applies vice versa, meaning that if the center of life is in Germany, all assets and income in both countries are also taxable.
The main difference lies in the treatment of wealth tax liability—as a Spanish resident, you are liable for tax on your worldwide income in Spain at the applicable tax rates. There are also significant differences in inheritance and gift tax law.
RH tip: Before purchasing a property, you should definitely have your personal tax situation reviewed by a competent international tax advisor, as it is not possible to make a blanket statement on this matter. We would be happy to refer you to one of our partners for international tax law. The NIE number is a number used to identify foreigners (número de identificación para extranjeros). The NIE serves as a tax number for foreigners.
This is particularly necessary in the following cases:
- the purchase or sale of real estate in Spain (and subsequent registration of ownership in the Spanish land registry),
- the commencement of an inheritance (and subsequent entry in the land register),
- Establishment of a company (e.g., S.L. or SA),
- Operating a business
You can find more information in our guide: "NIE number – The Spanish tax identification number."Both buyers and sellers ask themselves this question at the beginning of the decision-making process.
Basically, it can be said that, from a purely legal standpoint, it is possible for many brokers to establish contact. The only question is to what extent this makes sense.
As a prospective buyer, you need a competent, trustworthy, and reliable partner at your side who is committed to advising you. If you have made the right choice, one real estate agent is usually sufficient, as they have a detailed overview of the market.
RH tip: An efficient property search tailored to your own individual criteria is much more successful and effective than numerous viewing tours. Save your time with unnecessary viewings with lots of real estate agents for the finer things in life. The preliminary contract is usually drawn up in German (if the buyer and/or seller are German-speaking) or in English (if requested by the buyer and seller) and in Spanish. The notarized purchase contract is always drawn up in Spanish, as the property is located in Spain.
RH tip: At the notary appointment, you can request a German-speaking translator (for a fee) to translate the contract.In principle, non-residents in Spain can also register a mortgage on property located in Spain. However, there are some differences in treatment between tax residents in Spain and non-residents, i.e., citizens who are taxable in other countries.
Mortgages for foreigners living in Spain or Spaniards living in another country differ from standard mortgages granted to Spanish citizens residing in Spain. For example, they only allow financing of up to 70% of the purchase price, compared to 80% for Spanish citizens, they tend to have higher interest rates, and a large amount of documentation must be submitted.
However, this does not mean that bank financing is fundamentally impossible when purchasing property in Spain. You just need to be aware of these differences.
The difference in treatment is due to the bank's liability in the event of a possible repayment default.
RH tip: By taking out a mortgage when purchasing real estate, you can reduce wealth tax , inheritance tax, and gift tax, as these are considered debts and are deducted from your net assets. For this reason, taking out a mortgage to purchase a property in Spain has positive tax implications .For you as a buyer or seller, choosing the right real estate agent is crucial to the success of the planned transaction you desire.
Admittedly, the selection of real estate agents in Mallorca is extensive, making it challenging to choose the right one without prior knowledge.
When choosing an agent, you can consider standard criteria such as their online presence, reputation, and property listings. A personal recommendation from your network would undoubtedly be very beneficial in your decision-making process.
RH tip: In addition to all of the above criteria, please place emphasis on the broker's personal qualifications and life experience, not only in relation to real estate in Mallorca. When making decisions of such importance, a reliable contact person is more useful in the long term than a "big" name, where you will have to deal with changing contact persons.
Even an extensive range of properties on the website says little about the detailed knowledge of the individual properties. Last but not least, the real estate agent should ideally have a good command of your native language.
