Buying property in Spain

Buying a property in Spain, whether it is a holiday home, your first or next investment or a retirement to the sun, can be very exciting but also daunting. Here are some basics to help you navigate this exciting journey.

You can buy property in Spain at all price ranges, in all regions, and in a variety of settings from buzzing cities to tranquil inland villages and sun-drenched “costas” to suit your lifestyle choices.

Buying property in Spain can be a great investment, too. For investment purposes, it is worth noting that house prices have risen steadily for the past decade.
According to Registradores.org, the Spanish Land Registry, and the House Price Index published in 2023, the average price per square metre in Spain has risen by 5.85% year on year and reached a historical high of 3.87% above the 2017 peak.

For most property buyers, whether investment or holiday home, the ability to rent out the property when you don’t use it yourself is also key. It is safe to say that rental property is always in demand, especially with Spain being the 2nd most visited country in Europe (just after France) according to SchengenVisa.com, so there will always be a good demand for property rentals.

[input information on house prices if we can from registradores.org by region]
Data taken from https://www.registradores.org/ – the Spanish land registry

Who can buy property in Spain?

Anyone can buy a property in Spain. In general terms, there are no restrictions on foreigners buying property in Spain. In fact, it is relatively easy for European Union (EU) citizens or buyers from the UK, North America or further afield, compared to many other countries.

Even after the newly revised rules following Brexit, British citizens are one of the biggest overseas buyers of Spanish property. While there are limitations on how long non-EU citizens can remain in Spain without a visa (90 days in every 180), there are no restrictions on what or where they can buy property.
Once you own a property you will be able to rent that property out, but check local rules and licensing as these may vary across different provinces and municipalities.

There are no residency requirements for buying a property in Spain. But equally, buying there gives you no automatic residency rights either, except via the soon-to-be phased out ‘golden visa’.

Is it safe to buy property in Spain?

International buyers can feel confident. There are strong legal protections for buyers of both resale (i.e. older) and new build (“off plan”) properties.

As with any property purchase, there are some potential risks of buying property in Spain and we suggest that you work with a reputable, English-speaking estate agent, property lawyer and international payment specialist to ensure you avoid any pitfalls and to ensure due diligence. Buying a property in Spain without these could prove complicated and costly.

We call these the “Golden three” experts you need in place when buying a property abroad.

In addition, and for peace of mind, you can get a structural survey on any property in Spain you intend to buy, but it is not a requirement.

The properties you can buy in Spain

Spain has a variety of different property types that you can buy, from cave homes to penthouse apartments. Here are some of the property types to watch out for on property websites:

• Apartment (piso): Two thirds of Spaniards live in flats , especially in cities and resorts. There is no leasehold system so you will be buying a share of the freehold (and will pay community fees).
• Townhouse: Small houses, usually in a row in a town or urbanisation, often with some outside space at the front.
• Villa: A (usually) detached property, often with a pool, barbecue area and garden.
• Cortijo/finca: The word finca means plot, and these are generally smallholdings of land which may or may not have a building on it. The cortijo is the farmhouse.
• Cave home: Spain has thousands of cave homes, notable for being cool in summer and warm in winter. Rear rooms are hewn into the rock and townhouses are built onto the front.
• Park home: A popular budget option, these are mobile homes set on purpose-built spaces. They often come with a central clubhouse and leisure facilities.

Note: Some restrictions apply on what you can do with your property. For example, some popular tourist areas have banned short-term rentals. Spain has also increased its environmental and planning regulations. If you have plans for renovating a rural property, for example, check with your lawyer before committing to the purchase.

The team to help you buy in Spain

To buy a property in Spain successfully, and safely, you will need the services of certain professionals.

Finding an estate agent in Spain

The first is the estate agent who will show you the property. However, most estate agents in Spain will do much more than that. There is extra bureaucracy when buying from abroad and while none of it is especially difficult, it will certainly be easier with the help of someone familiar with the process.

Your estate agent will normally help you get your tax identification number (NIE). This is a requirement before you can buy. They may also help with opening a bank account, getting a survey and more.

Hiring a lawyer for your property transaction

You will need a lawyer for the purchase. Given that the legal structure of the purchase can have important implications for tax and inheritance, it is safest to speak to a lawyer before you even view properties and certainly before you sign any contracts. The cost of a lawyer for your property purchase will be 1 to 2% of the purchase price.

Your lawyer will normally also be able to help you get a visa if you are retiring to Spain. They can help with licenses if you are renting your property out, and with planning permission if making changes.

Currency exchange for your purchase in Spain

Often left too late in the process, the third professional service you will need is a foreign exchange payment specialist.

The risk of buying real estate in Spain is that during the two- or three-month purchase process exchange rates will be moving constantly. The price you are contracted to pay in euros will be fixed, but the moving exchange rate will mean it is never the same in your own currency.

A specialist in overseas property payments (as opposed to regular bank or FX app) will be able to fix your exchange rate for the entirety of the purchase process via a forward contract. This is important, in case the value of your currency collapses, which could potentially leave you needing to find thousands more at the last minute.

A specialist in property payments will also be on hand during the purchase process in case of problems.

Getting a mortgage in Spain

It is possible to get a mortgage on a property in Spain whether you are becoming resident in Spain or if simply buying a holiday home.

British buyers account for more than 15% of foreign mortgage applications in Spain.

The maximum loan to value is likely to be 70%. Bear in mind that this will not include the 10% or so buying costs, so you will normally require 40% of the purchase cost.

Mortgage applications are based on ability of the applicant to pay, and interest-only “buy-to-let” mortgages are not available in Spain. It is best to get the application agreed in principle before agreeing to buy a property in Spain, or at least making the sale contingent on getting a mortgage.

The process of buying property in Spain

The essential process of buying in Spain is similar to other countries, involving the payment of a deposit to secure the property for the buyer, then completion after legal checks several weeks later.

Set a budget: Work out your finances, speak to a currency company about exchange rates and get a mortgage approval in principle if required.
Online search: Properties will all be listed on portals, many with video walk-throughs and even drone footage. You can also investigate the local area via Google Earth.

Viewing trip with estate agent: When you have narrowed your online list as far as it will go, contact the estate agent and book your trip to Spain.

Getting your NIE. Getting your tax ID number is an essential first step to buying, which you do in Spain.

Making an offer: When you have made an offer on a property via the estate agent and had it accepted, you may be asked to sign a reservation agreement (contrato de reserva) to take the property off the market for couple of weeks at least. There will normally be a deposit of €3,000 to €10,000 to pay, which will only be refunded should you pull out under certain circumstances, so ensure you have your lawyer check it out first.

Sign the purchase contract and pay your deposit: The next stage is the deposit contract (contrato de arras), which sets out the exact details of the property, the price, payment method and when the purchase will be completed. The buyer normally pays a deposit of 10% of the price at this stage.

Sign the contract of sale: You normally sign the escritura pública at the notary’s office, but you can give your lawyer Power of Attorney if you prefer. The buyer pays the balance and gets the keys in return.

The costs of buying in Spain

Additional costs to account for on top of the purchase price include lawyer and notary fees, property taxes and land registry fees.

You should account for an extra 10 to 12% on the purchase price for Spanish property.

This includes property transfer tax (ITP), the rate of which varies depending on the region of Spain where you are buying from 10% in the Valencia region, which includes the Costa Blanca, but just 6.5% in the Canary Islands.

Legal fees are around 1 to 2% and notary, land registration and title deed tax add another 1 to 2.5%. There may also be taxes for property bought off plan too.