Archaic measure is still in force in certain areas of spain

Restriction of the ownership of property by non-EU citizens

22 / Jul

Since the 20th century, Royal Decree 698/1978, in conjunction with Law 8/1975, has been in force, determining which areas and facilities are of interest to the National Defence Force and thus providing the areas with “restricted access to property by foreigners”, thus restricting access to property.

This measure affects not only non-EU citizens but also investments from outside the EU in Spain.

This is a requirement of the Ministry of National Defence that prohibits, limits and/or conditions access to property and other proprietary rights for foreigners who are not members of the European Union or the Schengen Agreement.

So if you are a non-EU citizen, including British citizens, and you are thinking of: (i) acquiring a property under any title; (ii) constituting, transferring and modifying mortgages, leases, easements and other real rights or; (iii) constructing works or buildings of any kind, as well as acquiring rights to granted and unexecuted licences, you should pay close attention to the area where the property is situated. Some areas require prior military authorisation!

The same applies to Spanish companies with a non-EU shareholder owning more than 50% of the shares or when their investments are to be considered as investments coming from outside the EU.

So pay close attention to the area where the property is located: some areas require prior military approval!

The main areas requiring this authorisation are in Cartagena, Strait of Gibraltar, Bay of Cadiz, the border area with Portugal, Galicia and the border area with France.

To obtain property, you must also provide information about your nationality, personal circumstances, duration and place of residence in Spain, as well as documentation justifying the request, which is regulated by law.

Efforts have been made to abolish this regulation, but this has not yet been achieved. However, in 2021, the Ministry of Defence has announced that this restriction will only apply to properties that are on undeveloped land (suelo no urbanizable).

In short, be warned. The sanctions for not meeting this requirement range from financial penalties to demolition and/or expropriation of the property.

Camila Lizarazo Gonzalez