Being prepared in advance with paperwork required for a property in Spain purchase means less hassle and more time benchmarking and choosing property. For many Spanish property buyers the biggest problem and cause of delay recently has been obtaining their legally required NIE number because of rules changes and fewer offices to process applications.
NIE is the abbreviation for Número de identidad de extranjero, which in English means an identification number for foreigners. According to Spanish law every foreigner who buys a property in Spain has to obtain an NIE from the Spanish government, regardless of their nationality and whether or not they become resident in Spain.
The Spanish tax authorities use the NIE to control the fiscal obligations of all foreign property owners in Spain, mainly to assess you or process your annual tax payments such as income tax (IRPF) and the annual wealth tax (Patrimonio). Not paying these taxes (or making provisions to pay these taxes in your country of residence under a double-taxation treaty) can incur heavy fines. Therefore it is both mandatory and in your interests to obtain an NIE.
If you become resident in Spain you will need an NIE for all your fiscal interactions with the Spanish state. If a foreign couple buys a property in Spain together and register the property in both their names, then both of them must obtain an NIE.
A NIE number is required when you:
- Buy or sell a property in Spain.
- Apply for a business permit.
- Apply for a mortgage or any other type of loan. This identification number will be requested from any financial entity you may want to deal with.
- Open a Spanish bank account and activate it.
- Pay your Spanish taxes.
- Inherit assets in Spain.
- Apply for a driving licence in Spain, apply for an international driving license, and to validate driving licenses issued in EU and non-EU countries within Spain.
- Carry out many other transactions in Spain.
Foreigners who do not own real estate in Spain, but are resident in Spain, need an NIE card for opening an account with a Spanish bank or utility company.
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