Buying Property in Spain as a Foreigner: Fees, Taxes & Process

Understanding Spain’s Property Market in 2025

Spain’s property market continues to show resilience thanks to limited housing supply in major cities, strong tourism, and remote workers relocating to sunbelt regions. Prices rose modestly in 2024—around 3% nationally—while coastal hotspots like Málaga, Valencia, and the Balearic Islands saw higher appreciation. Mortgage rates stabilised after earlier increases, hovering between 3% and 4% for fixed loans. For international buyers, favourable exchange rates and Spain’s Golden Visa programme add extra appeal.

As a foreign buyer, focus on value fundamentals: demand drivers, infrastructure, rental yields, and long-term livability. While popular areas can feel saturated, Spain still offers overlooked neighbourhoods with excellent transport links and cultural amenities. Working with a buyer’s agent or legal team helps you identify opportunities before they hit the open market.

Regional Overview and Price Trends

• Madrid. Spain’s capital offers steady growth, strong rental demand, and high-quality schools. Districts like Chamberí and Retiro command premium prices, while emerging areas such as Tetuán or Vallecas provide better yields.
• Barcelona. A magnet for international professionals and digital nomads. Expect stricter licensing for tourist rentals and higher transaction taxes. Focus on Eixample, Gràcia, and Poblenou for liveability.
• Valencia. Consistently ranks among Europe’s most liveable cities. Prices remain affordable, with modern developments along the Turia Gardens and Cabanyal undergoing regeneration.
• Costa del Sol. Towns like Marbella, Estepona, and Fuengirola attract lifestyle buyers seeking sun, golf, and international schools. Luxury villas and apartments dominate, and rental demand peaks in summer.
• Balearic and Canary Islands. Islands offer high demand but limited inventory. Expect premium prices, strict urban planning rules, and higher transaction costs.

When comparing regions, consider property tax regimes, inheritance rules, and rental permit policies. Spain’s autonomous communities set many of these regulations, so local expertise is invaluable.

Key Milestones in the Buying Process

The property buying process in Spain follows a clear, structured path. Knowing these steps ensures you move quickly and securely.

1. Obtain an NIE and open a bank account. The NIE number is mandatory for the purchase deed, tax payments, and registration. See our NIE guide and bank account guide to prepare.
2. Define your budget and finance plan. Include taxes, legal fees, and renovations. If you need financing, secure a mortgage pre-approval before making offers.
3. Property search and visits. Shortlist neighbourhoods, evaluate transport links, and assess rental potential. Virtual tours can supplement in-person visits when you are abroad.
4. Make an offer. Offers are usually verbal or via email. Once accepted, the agent or seller prepares a reservation agreement.
5. Reservation agreement (reserva). Pay a small deposit (€3,000–€10,000) to remove the property from the market while due diligence begins.
6. Private purchase contract (contrato de arras). Typically signed within two to four weeks. Pay 10% of the purchase price. This contract outlines completion deadlines, penalties, and included fixtures.
7. Mortgage approval and valuation. If financing, the bank orders a valuation (tasación). They also request income documentation, tax returns, and credit reports.
8. Completion at the notary. Both parties sign the public deed (escritura pública), funds are transferred, and you receive keys.

Due Diligence Essentials

Thorough due diligence protects you from costly surprises. Your lawyer at JURO Spain will verify these documents before you sign any contract:

• Nota simple. A land registry extract showing ownership, debts, and charges. Review it before signing any contracts.
• Community of owners certificate. Confirms the property is up to date with community fees. If arrears exist, negotiate deductions or ensure payment before completion.
• IBI and utility receipts. Verify annual property tax (IBI) and utility bills are paid.
• Technical inspection. Hire an architect or surveyor to check the property’s structure, electrical systems, and compliance with local regulations.
• Energy performance certificate (CEE). Required for all sales. Higher ratings reduce running costs.
• Urban planning certificates. Essential for rural or unique properties to confirm buildability and avoid illegal extensions.

If the property is part of a new development, request the developer’s licence, insurance guarantees, and proof of completion certificates. For rural land, confirm agricultural or forestry restrictions.

Financing and Mortgages for Expats

Spanish banks welcome foreign buyers but apply stricter lending criteria. Key points:

• Loan-to-value (LTV). Non-residents typically receive 50–60% LTV. EU residents with Spanish income may secure up to 80%.
• Documentation. Provide tax returns, payslips, employment contracts, bank statements, and a credit report. Self-employed applicants supply business financials and accountant letters.
• Interest rates. Fixed-rate mortgages average 3–4% in 2025, while variable rates track the Euribor plus a margin of 1–1.5%.
• Currency considerations. If your income is in a currency other than euros, banks assess exchange-rate risk and may adjust the maximum loan amount.
• Life and home insurance. Lenders often require policies assigned to the bank. Compare offers carefully.

See our dedicated mortgage guide for expats for detailed documentation checklists and negotiation tactics.

Taxes and Completion Costs

Budget 10–14% of the purchase price for taxes and fees. The exact mix depends on whether you buy a resale or new-build property.

Resale properties (Second-Hand)

• Transfer Tax (ITP). Ranges from 6% to 11% depending on the region and property price.
• Notary and registry fees. Approximately 1% combined.
• Legal fees. Typically 1% plus VAT, or a fixed package between €1,500 and €5,000.

New-build properties

• VAT (IVA). 10% for residential properties, 21% for commercial units.
• Stamp Duty (AJD). Usually 1–1.5%, set by the autonomous community.
• Notary, registry, and legal fees. Similar to resale purchases.

Additional costs

• Mortgage arrangement fees. Around 1% of the loan amount plus valuation costs (€350–€600).
• Translator fees. Some notaries require a sworn translator if you do not speak Spanish.
• Currency exchange. Use a specialist provider to lock rates and reduce transfer fees.

What Happens at the Notary

Completion takes place at a notary office, where the public deed is signed. Expect the following:

1. Identity verification. Present your passport and NIE certificate.
2. Review of deed. The notary reads the deed aloud in Spanish. Ask for an English summary beforehand if needed.
3. Payment. Funds are transferred via banker’s draft or instant transfer. The notary confirms receipt before signing.
4. Key handover. Once the deed is signed, you receive the keys and the notary provides certified copies (copia simple).

If you cannot attend, a power of attorney allows a representative to sign on your behalf. Arrange this well before completion, especially if you need to legalise the document abroad.

Registering Your Property

After completion, your lawyer or gestor submits the deed to the Land Registry and pays the relevant taxes. Registration typically takes two to six weeks. Once registered, you receive an updated nota simple showing you as the owner. Ensure utilities are transferred into your name and set up direct debits to avoid missed payments.

Ongoing Obligations After Purchase

Owning property in Spain entails recurring responsibilities:

• IBI property tax. Paid annually to the local council.
• Rubbish collection fees (basura). Typically billed separately.
• Community fees. Cover building maintenance, common areas, and concierge services.
• Non-resident income tax (IRNR). Even if you do not rent the property, non-residents must file an annual imputed tax return.
• Insurance. Maintain home insurance and liability coverage. Landlords should consider rental protection policies.
• Maintenance. Budget for repairs, appliance replacements, and periodic upgrades to keep the property attractive to tenants or future buyers.

Common Pitfalls to Avoid

• Skipping due diligence. Verbal assurances from agents are not enough. Always verify documents and involve an independent lawyer.
• Underestimating taxes. Some buyers fail to budget for ITP or VAT, leading to cash-flow issues at completion.
• Ignoring community rules. Apartment complexes may restrict short-term rentals or renovations. Review statutes before buying.
• Using personal bank accounts for rental income. Set up a dedicated account to track expenses and simplify tax reporting.
• Neglecting wills. If you plan to own long term, create a Spanish will to streamline inheritance for heirs.

Frequently Asked Questions (FAQ)

How long does the buying process take?

The buying process typically takes 4–6 weeks without a mortgage. With financing, allow 8–12 weeks to accommodate bank valuations and underwriting.

Do I need to be in Spain for every step?

Not necessarily. You can grant a power of attorney (POA) to a lawyer to handle bank account opening, contract signing, and completion. However, visiting to inspect the property is strongly recommended.

Can I buy through a company?

Yes, but ensure the company structure aligns with Spanish tax law and avoids blacklisted jurisdictions. You may need additional documentation for the bank and notary.

What taxes apply if I rent the property?

Non-residents pay 24% tax on net rental income (reduced to 19% for EU/EEA residents). Deductible expenses include mortgage interest, community fees, utilities, and maintenance.

This guide is informational; get tailored advice by booking a call.