The ultimate guide to buying property in Spain: everything you need to know

Buying property in Spain is an exciting opportunity, whether you’re looking for a holiday home, an investment property, or planning to relocate permanently. However, the process can be complex, particularly for foreign buyers unfamiliar with Spanish real estate laws and regulations. At Key to Spain (KTS), we specialize in helping buyers navigate the market with confidence. In this guide, we’ll walk you through the key steps, costs, and legal considerations of purchasing property in Spain.

Building being built in Spain.

1. Can foreigners buy property in Spain?

Yes! Spain has no restrictions on foreigners purchasing property. Whether you’re an EU citizen or from outside the EU, you can freely buy real estate in Spain. Many international buyers purchase homes in coastal regions, vibrant cities, and tranquil countryside locations.

2. Choosing the right location

Spain offers diverse regions, each with its own advantages:

• Costa del Sol – ideal for beach lovers and expats, known for its sunny climate.

• Madrid and Barcelona – perfect for those seeking cultural and business opportunities.

• Valencia and Alicante – affordable and growing in popularity for retirees and remote workers.

• Andalusia and Extremadura – rich in history, offering more affordable property options.

• Balearic and Canary Islands – great for investment, tourism, and luxury living.

3. Understanding the property market

The Spanish property market has been steadily recovering since the 2008 financial crisis. Prices vary significantly by region, with Madrid and Barcelona being the most expensive, while smaller towns and inland regions offer more affordable opportunities. Consulting a local real estate expert like KTS can help you find the best deals and avoid overpaying.

4. Legal aspects of buying property in Spain

Foreign buyers must obtain an NIE (número de identificación de extranjero), a tax identification number required for all financial transactions in Spain.

Key legal steps include:

• Hiring a lawyer: a Spanish property lawyer ensures that all contracts are legal and that there are no outstanding debts on the property.

• Signing a reservation agreement: this agreement secures the property and removes it from the market while contracts are finalized.

• Signing the private purchase contract: typically includes a 10% deposit to confirm the sale.

• Finalizing at the notary: the final deed (escritura) is signed before a notary, and ownership is officially transferred.

• Registering the property: the property must be registered with the Spanish land registry (registro de la propiedad) to finalize ownership.

5. Costs and taxes involved

Buying a property in Spain has some costs and taxes associated.

When purchasing property in Spain, buyers should be aware of additional costs beyond the purchase price:

• Property transfer tax (ITP): 6-10% (for resale properties).

• VAT (IVA) and stamp duty: 10% VAT + 1.5% stamp duty (for new builds).

• Notary and land registry fees: 1-2% of the property price.

• Legal fees: typically 1-2% of the purchase price.

• Mortgage fees: if financing, expect additional mortgage setup costs.

6. Financing your property purchase

If you need a mortgage, Spanish banks offer financing to foreign buyers. Generally, banks lend up to 60-70% of the property’s value for non-residents. To qualify, you’ll need:

• proof of income and employment,

• a Spanish bank account, and

• a NIE number.

7. Potential risks and how to avoid them

While Spain is an attractive market, buyers should be cautious:

• Beware of illegal properties: some properties, particularly in rural areas, may not have proper building permits.

• Unpaid debts: in Spain, property debts transfer to the new owner.

• Exchange rate fluctuations: if purchasing from abroad, exchange rate changes can impact your budget.

• Overpaying: work with a trusted real estate expert like KTS to ensure you pay a fair price.

8. Golden visa program for property buyers

Spain offers a golden visa for non-EU citizens who invest €500,000 or more in real estate. This visa allows residency and visa-free travel within the Schengen zone, making it a popular option for investors. CURRENTLY DISCONTINUED.

9. Renting out your property

If you plan to rent out your property, keep in mind:

• Rental licenses: required in some regions, particularly for short-term tourist rentals.

• Rental income tax: non-residents must pay rental income tax, with different rates for EU and non-EU citizens.

• Property management: hiring a property manager can simplify renting if you’re not living in Spain full-time.

10. Is buying property in Spain worth it?

Absolutely! Spain offers a high quality of life, a strong rental market, and long-term investment potential. However, to make the most of your purchase, it’s crucial to work with experienced professionals.

Real estate property for investment purposes.

Final thoughts: let KTS guide you

Buying property in Spain is a rewarding but complex process. At Key to Spain (KTS), we specialize in assisting international buyers with everything from finding the perfect home to navigating legal and financial requirements. Contact us today for expert guidance and personalized property search assistance.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or immigration advice. Please consult a qualified legal professional before making any real estate decisions in Spain.