Buying a House in Spain in 2025: A Guide for Foreign Buyers

The Spanish property market remains strong in 2025, with prices continuing their upward trend. In 2024, average home values rose by 9.6% nationally, with some regions seeing even sharper increases:

• Alicante (Costa Blanca): +21.3%

• Valencia: +19.8%

• Balearic Islands: +19.5%

• Madrid: +13.6%

This growth is largely fueled by foreign demand. In 2024, more than 87,000 properties were purchased by foreign buyers—15.2% of all real estate transactions. Top buyer nationalities included:

• British

• French

• German

• Italian

• Dutch

• Belgian

• American (U.S. purchases alone rose by 12%)

Despite rising interest rates across Europe, Spain remains especially attractive to international investors, thanks to its stable market, desirable climate, and high quality of life.

Spain’s rental market tightened significantly in 2024. Rental prices rose by 11.5%, driven by a 50% drop in long-term rental availability following new housing laws.

For property investors, this presents a compelling opportunity—strong rental yields are reported in cities and regions such as:

• Madrid

• Barcelona

• Costa del Sol

• Valencia

With only 273,000 new homes built compared to 770,000 new households formed between 2021–2023, supply remains tight. As a result, both property and rental prices are expected to continue rising in 2025.

Before you start your property search in Spain, clarify your objective:
Are you buying for investment, personal use, or both?

If your goal is to generate rental income or benefit from long-term property appreciation, focus on:

• High-demand areas like Madrid, Barcelona, Costa del Sol, and Alicante

• Strong rental yields, typically 4–6%, and up to 7% in tourist zones

• Emerging markets with growth potential and new infrastructure

Looking for a home for retirement, holidays, or full-time living? You may prioritize:

• Access to amenities (healthcare, shops, public transport)

• Climate and lifestyle preferences (coastal warmth vs. cooler inland towns)

• Presence of expat communities for easier integration

• Proximity to airports or high-speed train hubs

Many foreign buyers want both flexibility and return. If that’s your case, look for:

• Homes in tourist-friendly areas that allow legal holiday rentals

• Properties with year-round appeal that also match your lifestyle

Before buying property in Spain, foreign buyers must complete a few key legal and financial steps. Here’s what you need to know.

1. Obtain an NIE (Foreigner Identification Number)

The NIE (Número de Identificación de Extranjero) is a tax ID number required for all non-Spanish buyers. It’s needed to:

• Sign contracts

• Pay taxes

• Register utilities or bank accounts

You can apply at a Spanish police station or Spanish consulate abroad.
👉 Read our full NIE guide for step-by-step instructions.

2. Open a Spanish Bank Account

While not legally required, it’s highly recommended. A Spanish bank account makes it easier to:

• Pay for utilities and taxes

• Receive a mortgage

• Set up direct debits for property expenses

3. Work With a Lawyer

Although not mandatory, hiring an independent real estate lawyer is strongly advised. They’ll:

• Conduct due diligence

• Verify legal ownership and debts

• Represent you during the transaction if needed

4. Mortgages for Foreign Buyers

Spanish banks offer mortgages to both residents and non-residents, but terms vary:

5. Taxes and Additional Costs

Buyers should budget an additional 10–15% on top of the purchase price to cover:

For a deeper breakdown, see our full article on taxes when buying property in Spain.

6. Residency and Visa Options

Buying property does not automatically grant residency, but non-EU buyers can apply for:

• Non-Lucrative Visa (for retirees or passive income earners)

• Digital Nomad Visa (for remote workers)

⚠️ The Golden Visa program is being phased out in 2025.
Learn more here: Spain Ends Golden Visa

The process of buying a house in Spain is fairly straightforward, but each step involves specific legal and financial checks. Here’s how to navigate it from start to finish:

1. Determine Your Budget and Financing

Start by calculating your total budget, including a 10–15% buffer for taxes and fees. If you plan to finance the purchase, it’s advisable to obtain mortgage pre-approval from a Spanish bank.

2. Obtain Your NIE Number

This is the Foreigner Identification Number required for all legal and financial transactions in Spain.
👉 Full guide: How to get your NIE in Spain

3. Appoint a Real Estate Agent and Lawyer

Work with a local real estate agent who knows the area and a lawyer who can perform legal due diligence. Never rely solely on the seller’s agent.

4. Search for Properties and Schedule Viewings

Define your criteria (location, type, price range) and begin shortlisting properties. Your agent will help organize visits and gather property documentation.

5. Make an Offer and Negotiate

Offers in Spain are typically made in writing. Negotiations are expected, especially in slower markets. Once accepted, you move to the next step.

6. Sign the Preliminary Contract (Contrato de Arras)

This is the reservation contract that secures the property. You’ll pay a 10% deposit.

• If the buyer pulls out, they lose the deposit

• If the seller pulls out, they return double the deposit

7. Finalize Your Mortgage (If Applicable)

Once the contract is signed, finalize your mortgage with the bank. Ensure all paperwork is submitted before the notary date.

8. Complete the Sale at the Notary

Both parties meet at the notary’s office to sign the final deed (Escritura de Compraventa). You’ll pay the balance and officially become the new owner.

9. Register the Property and Update Utilities

After signing, register the property with the Land Registry and update utility contracts (electricity, water, internet) in your name.

10. Apply for Rental Licenses or Residency (If Needed)

If you plan to rent short-term, check if a tourist license is required. For long-term stays, explore visa options like the Non-Lucrative Visa or Digital Nomad Visa.

Spain offers a wide range of attractive regions for foreign buyers—whether you’re looking for investment returns, retirement comfort, or a lifestyle change. Here’s a breakdown of some of the top areas:

Costa del Sol (Málaga, Marbella, Estepona)

This southern coastline is a favorite among retirees and second-home buyers thanks to its year-round sunshine, luxury developments, and international communities. It also has a highly active rental market, especially in Marbella and Estepona.

Madrid & Barcelona

Spain’s two largest cities offer strong rental yields, especially for long-term rentals. Madrid is the country’s economic hub, while Barcelona attracts both tourists and expats—but be aware of tight short-term rental regulations in the city center.

Valencia & Costa Blanca (Alicante, Dénia)

Valencia is one of the fastest-growing urban markets, with an excellent balance of affordability, lifestyle, and infrastructure. Costa Blanca remains popular with retirees and digital nomads, offering sea views and reasonable prices.

Balearic & Canary Islands (Mallorca, Ibiza, Tenerife)

These island regions are prime for holiday homes and short-term lets, especially in tourist hotspots. However, some areas—particularly Mallorca and Ibiza—have strict rental licensing laws, so always check local regulations.

Murcia & Costa Cálida

These coastal zones offer some of the most budget-friendly options in Spain, with rising interest from foreign buyers. Though less international than other areas, they provide good long-term potential for early investors.

Even experienced buyers can overlook important steps when purchasing property abroad. Here are some of the most common mistakes to avoid:

1. Underestimating Additional Costs

Many buyers focus only on the property price and forget about taxes, legal fees, notary costs, and registration expenses. Make sure to budget an additional 10–15% on top of the purchase price.

2. Skipping Legal Due Diligence

Never assume that a property is free of legal issues. Always verify ownership, debts, land registry records, and whether any building work was approved. Hiring an independent lawyer is key to avoiding costly surprises.

3. Overlooking Rental Regulations

In cities like Barcelona, Madrid, and Palma, you may need a special license to rent your property short-term. Failing to secure the right permits can lead to fines or forced closures.

4. Falling for Unrealistic Offers

If a deal seems too good to be true, it probably is. Scams targeting foreign buyers exist—especially online. Work only with trusted agents and lawyers, and never send money without proper documentation.

5. Ignoring Currency Fluctuations

When transferring large amounts internationally, small exchange rate changes can cost you thousands. Consider using a currency broker to lock in favorable rates and reduce fees.

Buying property in Spain in 2025 remains one of the most rewarding decisions you can make—whether you’re seeking lifestyle change, rental income, or long-term investment.

With rising demand, strong rental returns, and a wide variety of locations to choose from, Spain continues to attract thousands of foreign buyers each year. By understanding the legal and financial steps involved, working with local professionals, and doing your research, you’ll be well prepared for a successful purchase.

Ready to take the next step?
Contact us today to get expert advice or request a personalized quote for your property project in Spain.