Do you want to buy property in Spain?

Do you want to buy a property in Spain?

Then you should remember 3 things:

1. In Spain, you can only buy a property after confirming the legality of the origin of the money.
2. Before you start looking for a property, you need to go through the bank monitoring procedure. It sometimes becomes a serious obstacle for many buyers, especially those engaged in business or investment. This barrier arises due to strict requirements for the origin of funds established both at the national and international level to combat money laundering and terrorist financing.
3. Without a truly competent specialist, if you are not familiar with the system, it will be very difficult for you to quickly resolve these issues.

What complicates the confirmation of the origin of money in Spain?

1. Declaring cash when crossing the border The legislation of the Kingdom obliges foreigners to declare cash exceeding 10,000 euros when crossing the border of the European Union. However, even after the declaration, the tax authorities can conduct additional checks, specifying where, how and when the money was earned. This rule can become a serious barrier for investors or buyers, especially for those who carry large sums for investment or property purchase. Failure to comply with this requirement can lead to delays in border control and even confiscation of funds, which creates additional difficulties and stress for expats. Therefore, it is necessary to carefully prepare for this stage (I recommend competent advice before starting the purchase) and ensure that all the necessary documents and evidence of the legality of the funds are available to successfully pass border control.

2. Strict supervision by law and financial institutions According to Spanish law, in particular the Law on the Prevention of Money Laundering and Terrorist Financing, banks are required to carefully monitor the source of clients' funds. This means that financial institutions must have digital copies of certain personal documents of clients, as well as analyze financial transactions, check the legality of the source of income and identify possible signs of money laundering.

3. If you have money in crypto accounts, you must go through the verification procedure of your account on the exchange through a special procedure.

The absence of the necessary documentation or suspicious transactions can lead to serious consequences for the client and the bank. The former may face a refusal to carry out transactions, blocking of accounts or even a report of suspected involvement in illegal activities. For banks, this is associated with the risk of damage to reputation and possible fines for violating regulations. 

How to confirm the origin of money in Spain?

Banking compliance plays a key role in ensuring compliance with the law and preventing financial crimes. Its main function is to carefully monitor each transaction. When considering new clients, even before opening an account, the bank conducts an extensive check, ensuring the legality of their activities and excluding possible cases of fraud. Even after opening an account, the bank's department continues to monitor the client's actions. In the event of suspicious or unusual transactions, the bank requests additional documents to confirm the legality of the funds.

This strict control significantly complicates the purchase of real estate for people from the CIS countries, since not everyone who wants to buy can confirm the origin of the money. But there are no unsolvable problems, there are situations in which you can avoid mistakes and do everything correctly and correctly from the beginning.