Guide to VAT Numbers for Real Estate Buyers in Spain

All property buyers in Spain must have a tax identification number:

• Spanish citizens use their DNI (Documento Nacional de Identidad) as their NIF (Número de Identificación Fiscal).
• Foreign buyers must obtain an NIE (Número de Identificación de Extranjero), which serves as their tax ID for real estate transactions, banking, and other financial matters in Spain.
• If a foreign individual does not yet have an NIE, the Spanish Tax Agency may assign a temporary NIF (beginning with “M”), but an NIE is ultimately required.

• Spanish companies automatically receive a corporate tax ID (NIF).
• Foreign companies must obtain a Spanish NIF before purchasing property, regardless of their origin (EU or non-EU).
• The NIF for non-resident companies often begins with an “N.”
• If conducting cross-border EU transactions or seeking VAT refunds, companies may register for an EU VAT number (starting with “ES” followed by the NIF).

Foreign buyers can apply for an NIE in two ways:

• In Spain: Visit an Oficina de Extranjería (Foreigner’s Office) or designated police station.
• From abroad: Apply through a Spanish consulate in your home country.

Steps to Obtain an NIE:

1. Complete the Application Form – Form EX-15 (for an NIE) or Modelo 030 (for a temporary NIF “M”).
2. Prepare Required Documents – Passport (original and copy), proof of residence, and supporting documents (e.g., property purchase agreement).
3. Submit Application – Schedule an appointment and submit your paperwork in person.
4. Processing Time – In Spain, an NIE is often issued within a few days. If applying from a consulate, it may take a few weeks.

Foreign companies must register with the Spanish Tax Agency (Agencia Tributaria). The process typically includes:

1. Gathering Required Documents – Certificate of incorporation, Articles of Association, and proof of legal representatives (all apostilled and translated into Spanish).
2. Appointing a Fiscal Representative – Non-resident companies must appoint a tax representative in Spain.
3. Submitting Modelo 036 – This tax registration form is required to obtain a corporate NIF.
4. Receiving a Provisional NIF – The Spanish Tax Agency may issue a provisional NIF immediately, with a definitive one following after verification.

VAT applies to:

• New residential properties (first transfer) – 10% VAT
• New commercial properties and land – 21% VAT
• Resale properties – No VAT; instead, a Property Transfer Tax (ITP) applies, ranging from 6% to 11% (depending on the region).

• Waiving VAT Exemptions: Business buyers can opt to pay VAT instead of ITP to later recover the tax.
• Rentals: Long-term residential leases are VAT-exempt, while commercial leases are subject to 21% VAT.
• VAT Deduction for Businesses: Investors using property for taxable business activities can reclaim VAT.

Once you obtain a VAT number, you may have additional tax responsibilities:

• Quarterly and Annual VAT Filings: Businesses registered for VAT must submit regular tax returns.
• Property Taxes: Non-residents must file an annual Non-Resident Income Tax (IRNR) return (Modelo 210) if they own property in Spain.
• Corporate Obligations: Foreign companies must comply with Spanish tax laws, including appointing a fiscal representative.

Obtaining a VAT number (NIF/NIE) is a crucial step for purchasing property in Spain. Understanding the tax implications—whether VAT applies or if transfer taxes are due—can help you plan your real estate investment efficiently. For accurate guidance, always consult with a tax professional or real estate advisor.

If you’re planning to buy property in Spain and need help with tax identification, VAT registration, or real estate legalities, contact our expert team today. We offer personalized assistance to ensure a smooth and compliant transaction!