Spanish tenancy laws are strongly in favour of the tenant (read more here), which means property owners have to be extra vigilant when they sign up a tenant for a long term rental contract.
Many people who move to Spain find it difficult to digest this, and get caught in an eternal cycle, or catch-22! If you don’t have any financial history in Spain, you will find it is difficult to rent, and unless you rent, you cannot gain a history!
Here is what you need to be aware of when trying to rent a property for long term rental. You need to consider you are trying to convince a property owner that you will be a reliable tenant, and your chances of losing your income is minimal.
Pensioners
If you are in receipt of pension, that is considered as your income. You need to provide proof of this income, via your pension statement and bank statements. If your pension is from outside of Spain, it is better if your pension is paid into a Spanish Bank (see section below re “Sanctions”).
Beware that owners need to see your proof of income in order to obtain “Tenancy Insurance”. They must prove your income, and that your rent does not exceed 30% of your net income. If the rent exceeds 30% of your income, it is unlikely for the owner to be able to obtain insurance. This means they have to take the full risk of your tenancy, and any money owing in case you default.
Employment
The most favoured employment status is Spanish Government employees, as they have a stable income, and are unlikely to lose their jobs.
The next group are those with a permanent work contract (not seasonal jobs).
The most difficult groups are seasonal workers (for obvious reasons), and self-employed as they have a precarious life with zero guarantee of income.
You need to provide a copy of your employment contract, and proof of income. For employees with a work contract this is easy, as you can use your payslip and copy of your bank statements (see below), to show your regular income.
This is more difficult for self-employed people, self-employment by definition means irregular income. In this case, you need to show your tax filing with the Spanish tax authority (hacienda).
Tax Records
As we have mentioned, the self-employed are considered as high risk, so if you are self-employed you need to provide at least 2 years tax filing, but preferably 3 years.
Whilst past income is no guarantee of future income, this at least this demonstrates your capacity to earn from the previous years.
Vida Laboral
This is quite unique to Spain, and is a record of Social Security payments throughout your life! You can obtain it from the ministry of works. Whether you are employed or self-employed, the record exists, and demonstrates your history of social security payments. This is an indicator of your employment record, how often you have lost your income, and how long you have been self-employed, etc.
All useful information to convince the owner that you are a reliable tenant.
Residency Status (for non-Spanish)
You need to provide a copy of your TIE (for non-EU nationals), or your Residencia (EU nationals), or your Permanencia if you have lived in Spain longer than 5 years on a Residencia basis.
This proves that you are a legal immigrant, and can work in Spain without breaking the immigration laws. It also shows the owner that you are committed to Spain and are unlikely to be deported, or vanish overnight.
Bank Statements
Copies of 3 months bank statements are required, to show that you do earn what you claim, and your outgoings are not exceeding your income.
Beware that owners need to see your proof of income in order to obtain “Tenancy Insurance”. They must prove your income, and that your rent does not exceed 30% of your net income. If the rent exceeds 30% of your income, it is unlikely for the owner to be able to obtain insurance. This means they have to take the full risk of your tenancy, and any money owing in case you default.
References
A previous or current landlord reference is very helpful, but fully expect the property owner to contact them. Spain is a high-touch society, so they need to talk to people, and usually they do not take this kind of thing on face value.
Again this is about showing that you are low risk, and that you will make a good tenant.
Sanctions
If you are working in Spain and default on any payment, the creditor can apply for an “Embargo” on your bank and income. This means, your employer is forced by court order, to deduct the debt from your income, based on the amount and frequency that the court determines.
This is when having your employer outside of Spain falls apart. Spanish court orders cannot be executed in non-EU countries, and even in the EU countries, the process is long and expensive.
So don’t be surprised if owners either refuse to give you a rental contract, or ask for a significant advance payment (up to 12 months with some).
Summary
Because of the protections that the Spanish tenancy laws provide for tenants, owners are extra vigilant when renting out their property.
So be prepared to provide lots of information, and if you are a new comer to Spain, you need to seriously consider your aspirations. The higher the monthly rental, the more cautious an owner becomes. Perhaps living a little modestly in the first couple of years in Spain could help you build the right kind of credit, and tenancy history so that the next owner is more open to offering you a standard rental contract.