Purchasing Property in Spain – What is NIE? Louise Morley Explains
More often than not, a Notary’s first meeting with a new client, and vice versa, if the country concerned is Spain, will be in relation to the preparation of a Poder. A Power of Attorney, to enable the issue of an NIE.
All English Residents who buy or sell real property in Spain, need to be known to the Spanish Tax Authorities and issued with a card called NIE – ”NIE (Número de Identidad/Identificación de Extranjero)” – a tax identity card for Foreigners (non-Spaniards)
An English person must have an NIE in order to buy property in Spain, or if they wish to reside there as their main home, even if not buying a flat or house. Also you need this is you intend to take up employment in Spain or start a business there. Or buy a car. Or get a landline installed. Basically, if you’re not just on holiday there, you need one.
An NIE number can be thought of as being the Spanish equivalent of a UK National Insurance number. I mean, it isn’t, but it can be thought of that way. It is your Identity Number, so far as Spain is concerned and without it you have no official identity.
You can, just possibly, proceed in Spain to buy and sell property without obtaining an NIE identity and number, but this is not advisable.
Because, without an NIE number, you will not be able to declare your figures for annual tax payments such as income tax (IRPF), and the annual wealth tax (Patrimonio). Even if you do not actually owe any tax, you still have to make declarations if you are a resident of Spain, or a non-resident property owners.
Who needs an NIE in Spain?
Any foreigner who becomes resident for tax purposes in Spain needs an NIE number in Spain.
Any non-resident foreigner who buys property in Spain. If a couple buys a property in Spain together, and they register the property in both their names, then both of them must obtain an NIE number in Spain.
Anyone who wants to work in Spain, or wishes to start a business in Spain.
The taxes that are due when you sell a property (or a sum on account even if no tax is actually due) are withheld on your behalf and paid over to Hacienda (Inland Revenue). If you don’t have an NIE number, then the taxes cannot be paid and you may incur some fines. Many banks in Spain will now refuse to complete on a mortgage (issue the money) if their client does not yet have the NIE number.
The options for applying for your Spanish NIE number do include making application in person at Spanish police station [not every police station can accommodate this], or to apply in person at the Spanish Consulate in London.
However most English people will go down the route of appointing their chosen lawyer or other representative (i.e. typically a Spanish Abogado) to apply on their behalf, in which case a Power of Attorney [Poder] needs to be executed before me as an English Notary Public. Also I am required to copy and certify the data page of your British passport.
If you require any further information about NIE then please do not hesitate to contact me or Chris Atkinson here at AtkinsonNotary [0113 816 0116 or firstname.lastname@example.org] where we shall be more than happy to assist further.