Buying a house in Spain in 2021

If you are looking to buy a house in Spain as a foreigner, you will need to sort out some bureaucracy before being able to buy a property.

The Spanish property market has many quirks, and it pays to do your research before buying a home in Spain. Knowing what to expect when buying property in Spain can help avoid any pitfalls of setting up your life abroad. Factors to be aware of when buying Spanish property include property scams, high capital gains tax, and fluctuations in the Spanish real estate market.

The steps to follow when buying a house are not always intuitive. In addition, it is necessary to have clear which taxes and expenses we will have to pay to acquire the house.

Whether you are looking for a property in coastal areas or in a large city like Madrid or Barcelona, this guide is for you.

Table of Contents

What do you need to buy a house in Spain?

The only thing you need, in legal terms, is the NIE (Número de Identificación del extranjero). This number, which is unique to each individual, is essential to carry out any transaction in Spain. Since it must appear on all documents that you sign or are issued in Spain, you must have it before signing the deed. The NIE is not complicated to obtain, but it does take a long time; ask your real estate agent to make it easier for you to obtain the NIE in order to speed up the process as much as possible.

In addition, although it is not compulsory, having a bank account in Spain will make all the formalities easier, as it will make payments faster and will probably save you some commissions.

Finally, remember that once you are the owner of a property in Spain, you must appoint a tax representative if you are not resident in Spain.

How to buy a home in Spain step by step.

buying a house in spain process

Although each buying process differs significantly, in general, the phases found in any real estate operation would consist of the following:

  1. Tax and Budget Planning: The costs of acquiring a house are mainly paid by the buyer, and vary from region to region. Taxes and other paid by the buyer include:
    • Property transfer tax 6–10% (existing properties) / VAT (or IVA) at 10% (new properties);
    • Notary costs, title deed tax and land registration fee 1–2.5%;
    • Legal fees 1–2% (including VAT).
  2. Get your NIE: Contact the Spanish administration to get your tax identification number. You don’t need a bank account to buy a house, but we advise you to get one before buying the house. Here you can check out the best bank accounts in Spain.
  3. Search for properties in Spain. Our lawyers can help finding properties in Spain. If you feel confident enough, you can also search for a property yourself, by making use for portals like Idealista.com, fotocasa… etc
  4. Reservation agreement and letter of Intent. A letter of intent may be presented by one party to another party and subsequently negotiated before execution (or signature).
  5. Payment of the Property Transfer Tax or VAT, as applicable and update the Land Registry.

FAQs when buying a house as a foreigner.

Are foreigners allowed to buy property in Spain?

Of course! There are no restrictions on buying property in Spain, whether it’s commercial, residential or land. In fact, Spain encourages investment by foreigners, both resident and non-resident. Remember that if you buy a house worth more than €500.000 you can apply for a Golden Visa.

What are the taxes I need to pay when buying a house?

All property owners in Spain are required to pay three different taxes each year. If you are a resident, you are subject to Income Tax (including Capital Gains Tax) and Real Estate Tax (IBI).
If you are a non-resident in Spain, you are subject to Income Tax (including Capital Gains Tax), Property Tax, plus an additional Non-resident Property Tax. Here you can find more info about property taxes.

Can I get citizenship if a buy a property?

Sure! Spain encourages new home buyers by offering its Golden Visa residency program.

Do I have to pay the downpayment directly to the seller?

Yes, that is usual in Spain. Unlike in most western countries where the down payment is paid to an escrow agent (closed account, trustee, Notary, etc.) instead of to the seller, the local practice in Spain tends to surprise foreign buyers.
Any risk can be reduced to very little with some basic reviews, for example, making sure that the time between the payment of any deposit and the final sales deed is not excessively long, making sure the seller is not a company on the verge of bankruptcy, and confirming that the outstanding amount of the mortgage does not equal the purchase price (in which case the down-payment cannot be paid to the seller because the whole purchase price has to be paid to the bank). With the right due diligence, it is acceptable in Spain to do as the Spaniards do – pay the down payment directly to the seller at the time of signing the down payment agreement.

BUY A HOUSE IN SPAIN: Deposits and Mortgages

In general, non-resident buyers in Spain can enjoy the same mortgage conditions as Spaniards, i.e. up to 80% cover in the case of a first home, and between 60 and 70% in the case of a second home.

This means that you must have a minimum of 20% of the price of the available property, plus approximately 15% extra on the cost of the property to pay taxes, lawyer’s fees, notary fees, etc. In addition, your debt cannot exceed 30-35% of your income.

Other important information to bear in mind is that mortgages in Spain are normally taken out for a minimum of five years and a maximum of thirty, with the maximum age of 75 years for completing the mortgage. It should also be noted that each institution has its own risk criteria, in which the country of residence can be included, and that properties abroad are not usually accepted as collateral, as it is difficult to reach them.

You can read more about getting a mortgage in Spain in this article.

Taxes to buy a house in Spain

When you buy a property in Spain, you will be obligated to pay some taxes. Property taxes vary wether you are buying a brand new property or a resale property.

Taxes when buying a new property

When buying a brand new property, which is being sold for the first time, you will have to pay 10% VAT on the value of the property and the additional 1.5% on behalf of the Legal Documentation Tax.

Taxes when buying a resale property

When buying a resale property (a property that has changed hands at least once) you will be required to pay the Transfer Tax or ITP in Spanish, that is levied on a sliding scale depending on the purchase price.

For more information about property tax in Spain, you can check the linked article.

Property lawyers in Spain

If you are going to buy a property and want to save yourself future problems, it is advisable to seek advice from a property lawyer in Spain. The savings far exceed the cost of legal fees.

Buying your home is usually the largest investment for most individuals. Even those who own several properties tend to invest cautiously in the real estate market. Real estate companies always use the services of lawyers before making an investment.

In short, the services of a lawyer are often more useful for preventive than corrective purposes. But most people still hire them when it’s too late.

The effort to find a good advisor can save you a lot of trouble.

How a lawyer can help when buying a house

Before entering into the purchase of a property, basic tasks of research and analysis must be carried out. It is important to check that the property is in order and that the contracts of purchase and sale and, where appropriate, mortgage loan, will not end up causing problems.

In addition, tax burdens represent a significant percentage of the operation. Together with the associated costs, they can increase the sale price by up to 20%. It is therefore a good idea to know this extra before you get a fright.

42 thoughts on “Buying a house in Spain in 2021”

  1. Hello and thank you for such great information and guides to buying properties in Spain.
    I would like to know in order for a foreigner to apply for NIE, for the purpose of buying a property in Spain, does the applicant have to present a signed purchase contract from the seller or the real estate agent as the reason for applying for NIE?
    Thank you in advance,
    Ali Jannati

    Reply
  2. Hello I’m a Filipino based in Dubai. I wanted to buy house and lot which is around 60,000 Euro. I’m working having an average salary.
    Can I be able to purchase one? I’m dreaming of living there.

    Regards,
    Doray

    Reply
    • Hi Doray, one of our lawyers should be in contact with you shortly for your questions about buy a house in Spain

      Greetings

      Reply
  3. We have sold our property in Britain. We are just unsure of how difficult it is to buy a property in Spain since Brexit! Can you advise us on procedure
    Many thanks

    Reply
    • Hi Marilyn,

      one of our lawyers should be in contact with you shortly for your questions for buy a property in Spain

      Greetings

      Reply
  4. Hello!

    My husband is from London, England but is now a United States citizen and my son and I are both United State Citizens. We would like to move to the Costa Blanca area and I have been an estate agent in the United States for 15 years. How do I go about making myself legal for work as an estate agent? Also my husband does HVAC work for air conditioners and heating. Would we both be able to get legalized to work once we purchase a home?

    Cheers!
    Evie

    Reply
    • Hi Evie!
      Our situation is very similar! we dont want to work in Spain but I have the same citizenship situation and my husband and kids the same as you! We also want to move to Costa Blanca from the Wash DC area. Please let me know how you get on.
      Hope to see you on the Costa Blanca!
      Cheers!

      N. Sanchez

      Reply
  5. Hi I want to buy a property in murcia spain I want to pay cash or bank transfer how difficult is it to do this and what other costs are there in this process

    Reply
    • Hi David,

      one of our lawyers should be in contact with you shortly for your questions for buy a property in Spain

      Greetings

      Reply
    • Hi Charles,

      The foreigners can a buy a property in Spain.
      One of our lawyers should be in contact with you shortly for your questions for buy a property in Spain

      Greetings

      Reply
      • Hello my mom wants to buy a property in Spain and move over there to live , she is hoping to go over this year to start searching she is 49 years old and a British citizen is it still possible to become a resident and move over there permanently after brexit ? Also my sister is hoping on following her over with two children aged 2 and 3 What requirements would she need to meet please as she has the children. Aswell

        Reply
        • Hi Chris,

          one of our lawyers should be in contact with you shortly for your questions about buy a property in Spain

          Greetings

          Reply
  6. I’m curious if I transfer my downpayment for a home from a USA bank account to a Spanish bank account if I must pay taxes on its arrival in Spain.
    Thanks

    Reply
  7. I have a quick question:

    “This means that you must have a minimum of 20% of the price of the available property, plus approximately 15% extra on the cost of the property to pay taxes, lawyer’s fees, notary fees, etc.” Does this mean I need to have 35% of the value of the property on hand to be able to make an offer? EG: if the property is worth 300k, do I need a downpayment of 60k + another 45k for extra fees? (total of 105k)

    Is there any difference in this for a foreigner wanting to move to Spain? Does it vary based on location?

    Reply
    • Hi Caitlyn,

      one of our lawyers should be in contact with you shortly for your questions about buy a property in Spain

      Greetings

      Reply
  8. I have found the property i wish to purchase and a local real estate agent, do I still need a lawyer? Do you have a sample NIE I can use as a guide to ensure I’ve completed the application correctly?

    Reply
    • Hi Don,

      one of our lawyers should be in contact with you shortly for your questions about buy a property.

      Greetings

      Reply
  9. Hi we currently own a property in Spain and both have NIE numbers.
    Now with brexit and living in the uk, in the future will it be possible to get a TIE number and stay for more than 90 days at a time like pre Brexit?

    Reply
  10. Hi,
    I am doing research on possibly purchasing my first house in Spain, I am a Canadian citizen. I know that ideally I need to have 30% of the total cost of the house as down payment/legal fees. The remaining 70% the bank would lend as mortgage. I’m wondering if as a foreigner you can still get a mortgage from a Spanish bank? Or do I have to get that sorted in Canada from a Canadian bank?

    Reply
    • Hi Mariela,

      one of our lawyers should be in contact with you shortly for your questions about buy a property.

      Greetings

      Reply
  11. Hello, thank you for your helpful information, I wanted to know I used to study in Barcelona for 5 years and I have my NIE, but now am in Egypt and I want to come back to Spain but I want to buy a flat for 60,000 70,000 can I do this transaction??

    Reply
    • Hi Amiir,

      one of our lawyers should be in contact with you shortly for your questions for buying a property in Spain

      Greetings

      Reply
  12. Hi
    My husband and I have lived in Cyprus for 22 years but want to sell our property here and buy in spain. We have residency here and on the national health scheme. Do we still have to reapply for all this again in spain. Thankyou
    Barbara.

    Reply
    • Hi Tony,

      one of our lawyers should be in contact with you shortly for your questions for Buy a property in Spain

      Greetings

      Reply
  13. Hello, I want to apply for teaching jobs in Spain and move there with my husband, would I then get residency to buy a house? Would my husband then get residency? We’ve seen some sites saying that we would need to have £30,000 in the bank after buying a house? Is there a certain amount we have to spend to buy a house? It’s confusing as I would want to pay into the Spanish system but am I allowed to do it as a British citizen after Brexit?

    Reply
    • Hi Anna,

      one of our lawyers should be in contact with you shortly for your questions for Buy a property in Spain

      Greetings

      Reply
  14. Hello
    We are a couple with a daughter looking to emigrate to Spain from Switzerland. We do not have work in Spain yet, but hope to find something eventually, and have enough savings to keep us afloat for a while.
    We would be thankful for some pointers.
    Sonja

    Reply
  15. Hello,

    We are a couple from Albania and want to buy a property in Valencia 100.000-120.000 €.
    As we are not EU citizens are we allowed to buy a property in Spain even we are not resident there?

    I would like to be clear about that.

    Thank you

    Reply
    • Hi Toni,

      one of our lawyers should be in contact with you shortly for your questions for buying a property in Spain.

      Greetings

      Reply
  16. Hi

    I live in dubai and i want to buy a house for holidays in marbella. Now i would be ready to buy 500‘000 in cash, but is it smarter to take a morgage or pay it all at once? I need some advise!

    Thank you

    Reply
    • Hi Davide,

      one of our lawyers should be in contact with you shortly for your questions about buying a property in Spain

      Greetings

      Reply
  17. Hi guys
    I’ve put down a deposit and have signed a contract to purchase a property in Spain, with the completion date being 31st October.
    Ideally I’m looking to get a mortgage with a Spanish bank – but could also borrow the money from family and friends initially and then remortgage at a later date, as a backup option.
    If I were to choose to purchase the property in cash, what steps are required? Find a lawyer, arrange appointments with the notary, get a bank account, etc. etc?

    Thanks,
    Paul

    Reply
    • Hi Paul,

      one of our lawyers should be in contact with you shortly for your questions for buying a property.

      Greetings

      Reply
  18. Hi,
    I am looking for a lawyer and I found one who told me that her fees are around 2800 euro TTC. I see in her list that there are a few services that I don’t need like opening a bank account.
    Is this too much?

    Reply

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