Spain attracts 75 million tourists yearly with its Mediterranean and Atlantic coasts, rich culture, and sunny climate. Over 6 million foreigners (13% of the population) reside in Spain, many drawn by real estate investment opportunities. The country’s 4th-largest economy in Europe and 14th-largest GDP globally ensure stability for property buyers.

This guide explains how to buy property in Spain, covering legal steps, costs, financing, and key locations.

Why Buy Property in Spain?

Affordability & High Returns

Spanish property prices remain lower than in many European countries. Strong rental demand (especially in tourist areas) ensures steady income.

Lifestyle Benefits

• 300+ sunny days per year
• Low cost of living compared to Northern Europe
• High-quality healthcare

Step-by-Step Buying Process

Choose a Location

Popular regions for foreign buyers:

• Costa del Sol (Marbella, Málaga) – Luxury villas, expat communities
• Costa Blanca (Alicante, Benidorm) – Affordable beachfront homes
• Barcelona & Madrid – Prime urban investment
• Balearic & Canary Islands – High rental yields

Popular Real Estate Destinations in Spain

Coastal Regions (Costas)

Costa del Sol

Located in Andalusia

Known for sunny weather and vibrant nightlife

Popular among British, Scandinavian, and German buyers

Costa Blanca

Situated in the Alicante province

Features sandy beaches and golf resorts

Attractive to British, Belgian, and Dutch investors

Costa Brava

Northeastern Spain

Characterised by picturesque landscapes and historic towns

Draws interest from French, German, and British purchasers

Costa de la Luz

Atlantic coastline in southwestern Spain

Offers pristine beaches and an authentic Spanish experience

Appealing to Portuguese and British buyers

Costa Dorada

Located in Catalonia

A mix of beaches, resorts, and cultural attractions

Attractive to Spanish and international buyers

Secure Financing (If Needed)

• Spanish banks offer mortgages to foreigners (typically 60-80% LTV).
• Non-residents need a higher deposit (25-40%).
• Major lenders: Banco Santander, CaixaBank, Sabadell.

Hire a Lawyer & Verify the Property

• A Spanish property lawyer checks:
  
  • Land registry (Registro de la Propiedad)
  • Debts, liens, or legal issues
  • Planning permissions

Sign a Reservation Contract

• Pay a deposit (€3,000-€6,000) to take the property off the market.

Exchange Contracts & Pay Deposit

• Sign the private purchase contract (Contrato Privado de Compraventa).
• Pay 10% deposit (non-refundable if buyer withdraws).

Complete at the Notary

Can a US citizen buy property in Spain?

• Sign the escritura pública (title deed).
• Pay the remaining balance + taxes (6-10% for resale properties, 10% VAT for new builds).

Register the Property

• The Notary submits documents to the Land Registry.
• You receive the registered deed (Escritura Pública).

Costs of Buying Property in Spain

Legal Considerations

Freehold vs. Leasehold

• Freehold (Propiedad Plena) – Most common; full ownership.
• Leasehold (Concesional) – Rare; land is leased long-term.

NIE Number (Required for Purchase)

• A foreign tax ID is mandatory for transactions.

Buying a house in Spain – Top Tips

✅ Use a reputable agent to avoid scams.
✅ Get independent legal advice before signing.
✅ Check rental potential if buying for investment.

Ready to Buy?

Spain’s property market offers strong returns, residency benefits, and a superb lifestyle. Follow this guide to secure your dream home hassle-free.

Need expert help? Contact us for personalised assistance.

Buying a House in Spain as an American: Full Guide

1. Financing Your Purchase

• Mortgage Availability: Many Spanish banks offer mortgages to non-residents, often financing up to 70% of the property value.
• Currency Exchange: Use currency exchange specialists to manage fluctuations and get the best rates.

3. Legal and Administrative Steps

• Hire a Bilingual Lawyer. This is Essential for navigating the local legal system and ensuring that all paperwork complies with Spanish law.
• Power of Attorney: If you’re not based in Spain, consider granting power of attorney

How much of a deposit is needed to buy property in Spain?

In Spain, the deposit to secure a property is typically around 10% of the purchase price. This initial deposit is a part of the private contract, known as “Contrato de Arras,” a preliminary agreement between buyer and seller. Here’s a detailed breakdown of what to expect:

• Contrato de Arras: This contract outlines the terms of the sale and includes the agreed-upon price and any specific conditions. It is a binding agreement; you may forfeit the deposit if you withdraw from the purchase.
• Reservation Agreement: Sometimes, a smaller holding deposit of around €3,000 to €6,000 is paid initially to take the property off the market while the full deposit is being arranged. This amount is usually credited toward the total deposit once you sign the “Contrato de Arras.”
• Finalising the Purchase: Once the contractual agreements and initial payments are settled, the final transaction culminates with the signing of the “Escritura de Compraventa” (Deed of Sale) before a notary, where the remaining balance is paid, and ownership is officially transferred.

Remember, securing a property in Spain involves several administrative steps, and having legal guidance can ensure that each requirement is met correctly.

Is it worth buying a property in Spain?

Deciding whether it’s worth buying a property in Spain depends on several factors, including your financial situation, lifestyle preferences, and long-term goals. Here are some aspects to consider:

1. Lifestyle and Location:

• Spain offers diverse regions, each with its lifestyle and attractions. For instance, Costa del Sol is known for its pleasant climate and beaches, making it ideal for holiday homes.
• Consider the type of community and amenities you desire and whether you plan to live there permanently, use it as a vacation home, or invest in it.

2. Financial Considerations:

• Property prices vary across regions, with areas like Madrid and the Balearic Islands having higher prices per square meter than regions like Castilla-La Mancha.

3. Investment Potential:

• The Spanish property market can offer good investment opportunities, especially in popular tourist areas. However, market conditions can fluctuate, so it’s essential to research trends and potential returns.
• If you’re considering renting out the property, investigate the area’s demand and any legal regulations regarding short-term rentals.

4. Legal and Administrative Aspects:

• Be aware of the buying process, taxes, and legal requirements. The process involves contracts and notary services, and it’s crucial to ensure all legalities are correctly handled.
• Be cautious of unscrupulous estate agents and ensure you work with reputable professionals.

In conclusion, buying property in Spain can be worth it if it aligns with your personal and financial goals and if you carefully navigate the legal and market landscape. To make an informed decision, it’s advisable to consult with real estate professionals and legal advisors familiar with the Spanish market.

The new rules for buying property in Spain, as mentioned in the background information, include:

1. NIE Requirement: Foreigners must obtain a NIE (Número de Identificación de Extranjero) to conduct financial transactions, including buying property. This can be applied to the foreigners’ offices in Spain or the Spanish consulate in their home country.

2. Buy-to-Let Licenses: In the Balearic Islands, only Spanish residents can apply for buy-to-let licenses.

3. Short-Term Rentals in Madrid: New measures in Madrid limit stays to a maximum of five days, which can affect the profitability of short-term rental properties.

4. Illegal Practices Warning: Sellers may attempt to under-declare property values to reduce capital gains tax; this is illegal, and buyers are advised to avoid such deals.

5. Legal and Procedural Complexity: The process can be complex, and it is recommended that you rely on real estate lawyers and relocation experts to navigate it.

These rules reflect some of the challenges and legal requirements foreigners must consider when purchasing property in Spain.

Buying property in Spain as a foreigner

When planning to buy property in Spain, especially as a foreigner, staying informed about current rules is essential. Here’s a detailed guide on the new regulations that could impact your property buying journey:

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1. Residency and Tax Implications:

• Foreign property buyers should be aware of residency rules. Living in Spain for more than 183 days a year generally means you become a Spanish tax resident, which has implications for your global income and wealth taxes.
• Recent tax reforms, notably changes in property tax assessments and inheritance tax laws in different regions of Spain, may also affect property owners.

2. Regional Variances:

• Each Spanish region may have its property regulations, particularly affecting foreign investors. For instance, popular areas like Andalusia and the Costa del Sol may have different taxation or development regulations from other regions.
• It’s crucial to research regional requirements and restrictions, such as those on coastal properties, where laws might protect natural landscapes that limit construction and modifications.

3. Mortgage and Financing Changes:

• Banks in Spain have updated their lending policies. New stress tests for mortgages may be required, including a thorough evaluation of foreign borrowers’ financial stability.
• Interest rates might

Opening a bank account in Spain is an essential step when purchasing property, as it facilitates the payment of taxes and fees associated with the sale transaction. Here’s a step-by-step guide based on the provided background information:

1. Choose a Bank:

• Consider banks that specialise in services for international customers, such as Santander, La Caixa, Sabadell, or BBVA. CaixaBank, in particular, offers such services and can perform operations quickly via its online platform.

2. Gather Required Documents:

• You will need a certified colour copy of your ID card or passport with a Hague apostille stamp to certify its authenticity. Ensure you have an official translation of these documents into Spanish.

3. Apply for an NIE:

• Before opening an account, apply for a foreigner’s identity number (NIE), which is needed for identification in Spain. If necessary, an advisor can facilitate this step.

4. Open the Account:

• You can open the account remotely in one of the 15 eligible European countries. Otherwise, you can do so in person at a local branch in Spain.
• If travelling to Spain is not feasible, you may use a power of attorney to allow someone else to open the account on your behalf.

5. Consider Economic Means:

• A Spanish bank account can demonstrate your economic means, even if you do not plan to become a resident.

6. Contact the Bank:

• If you need assistance, some banks provide dedicated services for expats and can introduce you to local branches or relevant contacts to facilitate the process.

Following these steps with the relevant bank allows you to

Hire a company to check the condition of the house.

To hire a company to check the condition of a house in Spain, follow these steps:

• Opt for banks experienced with international clients, such as CaixaBank and Sabadell, which are known for their expat services.

1. Research and Identify Potential Companies: Start by researching companies that specialise in property inspections in the area where you plan to buy the house. Look for companies with good reviews, a strong reputation, and relevant experience in the Spanish real estate market.
2. Check Credentials: Ensure your chosen company is licensed and has qualified professionals to conduct thorough inspections. Verify their credentials and any certifications they hold.
3. Request Quotes: Contact several companies to request quotes for their inspection services. Compare the quotes, considering what each inspection covers and any additional services they might offer.
4. Review the Scope of Inspection: Make sure the inspection will cover all necessary aspects, such as structural integrity, electrical systems, plumbing, roofing, and any potential issues specific to the region or type of property.
5. Schedule the Inspection: Once you have selected a company, schedule the inspection at a convenient time. If you cannot be there in person, consider using a power of attorney to appoint someone who can be present on your behalf.
6. Receive the Inspection Report: After the inspection, the company should provide you with a detailed report outlining their findings, including any issues or repairs needed. Review this report carefully.

Spanish Property Ownership and Market History

Step 1: Research the Market

Before making any commitments, it’s crucial to understand the Spanish property market:

• Explore Regions: Spain offers diverse regions, each with unique characteristics. From the vibrant cities like Barcelona and Madrid to the sunny coasts of Costa del Sol and Costa Brava, determine which area suits your lifestyle and investment goals.
• Market Trends: Stay informed about current market trends, property prices, and economic conditions affecting real estate in Spain. This will help you decide the right time and place to buy.

Step 2: Set a Budget

Define your financial limits and consider all associated costs:

• Property Costs: Besides the purchase price, remember to factor in taxes, legal, and notary fees, which typically add 10-15% to the property’s price.
• Financing Options: If you require a mortgage, assess your financing options effectively. Spain offers various mortgage options, and some banks provide services tailored for international clients.

Step 3: Engage a Professional Real Estate Agent

A reliable real estate agent can streamline your property search:

• Choose Local Agents: Opt for experienced agents in the region you’re interested in. They provide valuable insights into neighbourhoods, property values, and trends.
• Verify Credibility: Ensure the agent is registered and reputable. Agents with solid track records can significantly ease the buying process.

Step 4: Legal Considerations

Understanding legal requirements and ensuring compliance is crucial:

• Hire a Lawyer: Always work with a lawyer specialising in Spanish property law. They will help you navigate complexities, verify legal aspects of the property, and assist with contracts.

Spanish Property Ownership and Market History

• NIE Number: Obtain a Número de Identificación de Extranjero (NIE), a tax identification number required for all property transactions in Spain.

Step 5: Conduct Property Inspections

Before purchasing, ensure a thorough inspection:

• Homeownership Rate: Approximately 76% of people in Spain own their homes, significantly higher than the US average of 65%.
• Foreign Ownership: Spain has large expat communities, leading to substantial foreign-owned real estate.

Market Fluctuations

• Hire Inspection Services: Engage a professional inspection company to assess the property’s condition. This includes structural checks, electrical systems, plumbing, and region-specific considerations.
• Review Inspection Reports: Carefully examine the inspection report for any issues or repairs needed, which could influence the negotiation or your decision to purchase.

Step 6: Secure Financing

• Pre-Financial Crisis: Before the global financial crisis, Spanish housing prices were notably high, with some regions experiencing a growth of around 250% over a decade.

If a mortgage is needed, secure your financing:

• Post-Financial Crisis: The crisis led to a significant market correction, with property prices dropping by about 40% on average from late 2007 to Q3 2015.
• Choose the Right Bank: Banks like CaixaBank and Sabadell offer tailored services for non-residents. Explore their mortgage options, interest rates, and terms.
• Documentation and Approval: Prepare necessary documents and demonstrate your ability to meet financial obligations. Approval can take time, so initiating this early is beneficial.

Step 7: Finalise the Purchase

• Current Trends: Spanish property has recently regained its reputation as a promising investment. Despite global challenges like the pandemic, renewed interest has driven prices upward.

The final steps towards ownership involve:

Legal and Financial Considerations for Foreign Buyers

• Sign the Contract: After negotiations and checks, sign the ‘Contrato de Compraventa’ – a private purchasing contract outlining the terms of sale.
• NIE Requirement: A Número de Identificación de Extranjero (NIE) is crucial for property transactions. Obtaining it can be time-consuming, but it is necessary before signing deeds in Spain.
• Bank Account: While not mandatory, having a Spanish bank account facilitates transactions and may reduce costs.
• Notary Act: Complete the sale with a Notary Public, who formalises the transaction, ensures its legality, and records it in the Land Registry.

Understanding the Spanish Property Market

• Tax Representation: Non-resident property owners must appoint a tax representative in Spain.

Costs and Taxes

• Acquisition Costs: These are primarily borne by the buyer and vary by region. They include:
• Property transfer tax (6–10% for existing properties) or VAT (10% for new properties).
• Notary costs, title deed tax, and land registration fee (1–2.5%).
• Legal fees (1–2% including VAT).

Potential Pitfalls and Fraud

• Scams and Fraud: Buyers must be cautious of property and fraudulent schemes, including equity release and timeshare scams.
• Resources for Advice: Guides from the Spanish Land Registry and insights from Spanish Property Insight can help. Expat forums and local interactions also provide valuable information.

Choosing a Location

• Varied Choices: Whether seeking property in serene coastal areas or vibrant cities like Madrid and Barcelona, research and local advice are key to making informed decisions. Spain’s real estate market has experienced fluctuations but remains robust:
• Historical Context: Property prices dropped significantly after the 2008 financial crisis but have since recovered. Understanding these trends helps forecast potential growth areas.
• Foreign Investment: Spain attracts many foreign buyers, contributing to market dynamics. The government’s regulations support foreign ownership, enhancing market confidence.

Buying property in Spain is a potentially lucrative and enjoyable venture. By following these steps and with the right professionals guiding you, you can navigate the process smoothly, ensuring your investment resonates with your aspirations and financial goals.