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Buying property in Spain as a foreigner

Buying a Property in Spain As a Foreigner: Guide 2024

Last update: September 23, 2024

Reading time: 31.9 min

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No Time to Read It All? Here’s the Quick Summary:
Foreigners can buy property in Spain with the same rights as locals. Essential steps include obtaining an NIE, conducting due diligence, signing a private purchase contract, and finalizing the sale with a notary. Mortgages are available with interest rates around 2-3%, but buyers should budget for extra costs like taxes, legal fees, and notary charges. Popular regions for foreign buyers include Costa del Sol, Barcelona, and Madrid. It’s important to understand taxes like IBI, income tax on rentals, and capital gains tax. Engaging a lawyer or a property hunter with legal services is highly advised to navigate the complexities and avoid common pitfalls. Spain’s real estate market is relatively stable, backed by expected economic growth of 2.1% in 2024 and 1.9% in 2025.

1. Introduction

Spain has long been a preferred destination for foreigners looking to buy property, thanks to its pleasant climate, diverse landscapes, and rich cultural heritage. The Spanish real estate market has proven resilient, offering various options that cater to different preferences and budgets. Understanding the nuances of buying property in Spain as a foreigner is essential for a smooth transaction.

2. Legal Framework for Foreigners

Foreigners can purchase property in Spain with virtually the same rights as Spanish nationals. The Spanish legal system provides a secure framework for property ownership, and there are no restrictions on foreign ownership of land or property. Recent updates have streamlined certain legal procedures, making it easier for non-EU citizens to invest in Spanish real estate.

Key Legal Requirements:

NIE (Número de Identificación de Extranjero)

An identification number required for property transactions. Obtaining an NIE is a crucial step in the process, and we’ve prepared a comprehensive guide to help you through it. Our detailed article explains how to obtain the NIE on your own, covering everything from the necessary documents to step-by-step instructions.

A specimen of an official Spanish NIE (Número de Identificación de Extranjero) certificate issued by the Spanish Ministry of the Interior, featuring the individual's identification number and details, with an official stamp from the Extranjería office in Málaga.

Due Diligence

A thorough legal check of the property’s status is mandatory to avoid issues related to ownership or debts. More details about due diligence

Someone signing a document

3. Types of Properties Available

Spain offers a variety of property types to suit different needs:

White seaside house with terracotta roof, palm tree, overlooking a marina and blue sea.

Villas: Ideal for those seeking privacy and luxury.

Multi-story building with green balconies against a clear blue sky, partially obscured by tree foliage.

Apartments: Perfect for city dwellers and those looking for low-maintenance options.

Beautiful townhouse in Spain with a blue Sky

Townhouses: Offer a balance between villa living and apartment convenience.

Three-story house with orange roof, balconies, and rooftop terrace surrounded by greenery.

Rural Properties: Suitable for buyers interested in country living.

Both new builds and resale properties are available, each with its own set of advantages and considerations.

4. The Property Buying Process in Spain

The process of buying property in Spain can be straightforward if you are well-prepared and understand each step involved. The legal framework in Spain is designed to protect both buyers and sellers, but it is essential to follow the correct procedures to avoid pitfalls. Here’s a detailed breakdown of each step in the property buying process and some key advice to help you navigate it successfully.

1. Reservation Agreement

The Reservation Agreement is the first formal step once you have decided on a property. This document is essentially a preliminary agreement between you and the seller. By signing it, you commit to purchasing the property, and in turn, the seller agrees to take the property off the market for a specified period.

  • Deposit Payment: A small deposit, usually ranging from €3,000 to €6,000 (or about 1% of the purchase price), is paid at this stage to secure the property. This deposit demonstrates your serious intent to buy and compensates the seller for reserving the property for you.
  • Legal Significance: Although this agreement is not legally binding in the way the final deed is, it is a significant step. Breaking the agreement usually results in the forfeiture of your deposit, so only sign it when you are sure about your decision.

2. Due Diligence

Due diligence is the most crucial part of the property buying process. It involves a comprehensive legal examination of the property to ensure it is free of encumbrances and is legally suitable for sale.

  • Legal Checks: Your lawyer will verify the property’s legal status by checking the Land Registry (Registro de la Propiedad) to ensure there are no existing debts, mortgages, or legal claims against it. They will also confirm that the seller is the rightful owner and that the property matches the Land Registry’s description.
  • Urban Planning Compliance: For properties in certain areas, especially rural or coastal zones, it is essential to check for compliance with local urban planning laws. This step ensures that the property has the necessary licenses and that there are no restrictions or plans for future development that might affect your use of the property.

Advices

  • Hire a Specialist Lawyer: Employ a lawyer who specializes in Spanish real estate law. This professional will conduct all necessary checks and safeguard your interests throughout the process.
  • Check for Hidden Costs: During due diligence, your lawyer should also check for any unpaid community fees, utility bills, or taxes associated with the property, as these can transfer to the new owner.

3. Private Purchase Contract (Contrato Privado de Compraventa)

Once due diligence is complete and you are satisfied with the property’s legal status, the next step is to sign the Private Purchase Contract. This contract is a more detailed agreement that outlines the terms and conditions of the sale.

  • Deposit Payment: At this stage, a more significant deposit is required—usually around 10% of the property’s purchase price. This deposit serves as a financial commitment to the purchase.
  • Terms of the Sale: The contract will include essential details such as the purchase price, payment schedule, completion date, and any conditions that must be met before the sale can proceed. It will also stipulate what happens if either party fails to complete the transaction, including penalties.
  • Legal Binding: This contract is legally binding. If the seller backs out after signing, they are typically required to pay back double the deposit. If the buyer withdraws, they usually forfeit the deposit.

Advices

  • Ensure Comprehensive Terms: Make sure the contract includes all terms discussed, including any fixtures or furniture included in the sale. Your lawyer should draft or review the contract to ensure it protects your interests.
  • Consider Payment Protection: If you’re making payments in installments, consider using a bank guarantee or escrow account to protect your funds until the sale is finalized.
Clients and sellers with a property hunter at the notary's office, smiling while signing the 'Escritura' (title deed) for the property transaction.

4. Notary and Escritura (Title Deed Signing)

The final step in the property buying process is the signing of the Escritura, the official title deed, in the presence of a notary. This step formally transfers ownership from the seller to the buyer.

  • Role of the Notary: The notary is a public official who acts as an impartial witness to the transaction. They ensure that all legal requirements are met, verify the identities of the buyer and seller, and confirm that both parties understand the contract’s terms. The notary does not represent either party but ensures the sale is lawful.
  • Final Payment: At this stage, the buyer pays the remaining balance of the purchase price. The notary will then issue the Escritura, which both parties sign to complete the transaction.
  • Registration: After the signing, the notary will send the title deed to the Land Registry to record the change of ownership. This step is crucial as it legally confirms you as the new owner.

Advices

  • Understand the Notary’s Role: While the notary ensures the legal aspects of the sale are in order, they do not perform the in-depth due diligence that your lawyer does. Ensure that your lawyer has cleared all legal checks before reaching this stage.
  • Bring Necessary Documents: Ensure you have all necessary documents with you on the day of signing, including your NIE number, passport, and proof of payment for any associated taxes and fees.

A lawyer specializing in Spanish property law is highly recommended to ensure a smooth transaction.

5. Financing Your Property Purchase

Foreigners can obtain mortgages from Spanish banks, with loan-to-value ratios typically ranging from 60% to 70%. The current interest rates in 2024 are around 2-3% for fixed-rate mortgages, making financing an attractive option.

Mortgage Calculator

Property Value Down Payment (30%) Mortgage Amount (70%) Monthly Payment

% Interest,
Years
€200,000 €60,000 €140,000 €741
€500,000 €150,000 €350,000 €1,853
€1,000,000 €300,000 €700,000 €3,706
€0 €0 €0

Property Value: €200,000
Down Payment (30%): €60,000
Mortgage Amount (70%): €140,000
Monthly Payment (2.5% Interest, 20 Years): €741

Property Value: €500,000
Down Payment (30%): €150,000
Mortgage Amount (70%): €350,000
Monthly Payment (2.5% Interest, 20 Years): €1,853

Property Value: €1,000,000
Down Payment (30%): €300,000
Mortgage Amount (70%): €700,000
Monthly Payment (2.5% Interest, 20 Years): €3,706

6. Costs Involved in Buying Property

When buying property in Spain, it’s important to consider the various costs that go beyond the property’s sale price. Being aware of these expenses upfront can help you budget effectively and avoid surprises. Here’s a more detailed breakdown of the key costs involved:

  • Property Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP): This tax applies to resale properties and varies depending on the region, typically ranging from 6% to 10% of the property’s purchase price. For example, in Andalusia, the rate can vary depending on the value of the property. In some regions, there might be reduced rates for certain buyers, such as first-time homebuyers or those buying a primary residence.
  • VAT (Impuesto sobre el Valor Añadido, IVA): If you’re purchasing a new build directly from a developer, you will pay VAT instead of the transfer tax. The standard rate for residential properties is 10%. For commercial properties and land, the VAT rate can be higher (typically 21%). Additionally, when buying a new property, you might also have to pay a Stamp Duty (Actos Jurídicos Documentados, AJD), which is usually between 0.5% and 1.5% of the property’s price, depending on the region.
  • Notary and Registration Fees: The notary’s fees are regulated and usually amount to around 0.5% to 1% of the purchase price. These fees cover the costs of preparing the official purchase deed (Escritura Pública) and handling the signing process. Registration fees for entering the property in the Land Registry (Registro de la Propiedad) are separate and typically range between 0.5% and 1% of the purchase price. Although these fees might seem minor in comparison to other costs, they are essential for legally securing your ownership.
  • Legal Fees: Hiring a lawyer is crucial to ensure the transaction is completed legally and to protect your interests. Legal fees usually amount to around 1% of the property’s purchase price, but they can vary depending on the complexity of the transaction and the lawyer’s experience. This fee covers the lawyer’s work, including conducting due diligence, reviewing contracts, and providing legal advice throughout the process.
  • Additional Costs: Beyond the primary costs, there might be other expenses such as bank fees if you’re getting a mortgage, property valuation fees, and the cost of obtaining a NIE number (Foreign Identification Number), which is required for all property transactions in Spain. Some buyers also opt for property insurance and home inspections, which, while not mandatory, can add to the total expenditure.
Cost Type Amount (€)
Property Price 300,000
Transfer Tax (8%) 24,000
Notary and Registry Fees 3,000
Legal Fees (1%) 3,000
Total Cost 330,000

Extra Costs Involved in Buying Property

For More Detailed Information on Taxes:
If you want to dive deeper into the topic of taxes when purchasing real estate in Spain, we have a dedicated article that covers everything you need to know. It provides comprehensive insights into all tax-related aspects of property purchase. You can find this detailed guide on our Taxes When Purchasing Real Estate in Spain page.

7. Best Locations for Foreigners

Spain offers a diverse range of cities and regions that cater to different preferences and lifestyles. Here’s an overview of the most popular areas for foreign buyers in 2024:

Costa del Sol
Barcelona
Madrid
Alicante & Costa Blanca
Costa Brava
Valencia
Mallorca
Canary Islands (Tenerife, Gran Canaria)
Seville
Granada Spain

Price Evolution per Square Meter of Housing for Sale in Spanish Cities.

All the data presented here is sourced from the Idealista website and corresponds to the prices in August of each year. For more detailed information and historical data, you can visit the official report on Evolution of Housing Prices for Sale in Spain (Evolución del precio de la vivienda en venta en España) on Idealista.

Price Evolution of Real Estate (2020-2024)

Malaga: Since 2020, Malaga has experienced remarkable growth in price per square meter, rising from €2,118/m² in 2020 to €3,069/m² in 2024, a 45% increase. This trend indicates that Malaga is offering excellent investment opportunities for buyers seeking an exceptional quality of life by the sea.

Madrid: Madrid continues to be one of Spain’s most dynamic cities, with the price per square meter reaching €4,717/m² in 2024. Although the growth is more moderate at 30% since 2020, it reflects the stability of the capital’s real estate market, which is ideal for those looking to invest in a secure and growing metropolitan area.

Barcelona: Barcelona offers a stable and promising real estate market, with an 11% increase between 2020 and 2024. Prices have reached €4,528/m² in 2024, indicating a steady demand. This makes Barcelona a wise choice for buyers interested in a vibrant and cultural city.

Valencia: Valencia has seen a 46% increase in property prices between 2020 and 2024, rising from €1,824/m² to €2,664/m². This growth reflects the city’s increasing appeal due to its balance between affordable living costs and high quality of life. Now is the perfect time to invest in Valencia before prices rise further.

Gran Canaria: Gran Canaria shows more stable growth, with an 18% increase since 2020, reaching €2,340/m² in 2024. This makes it an interesting destination for buyers seeking a secure investment with prospects for steady growth.

Conclusion

According to Idealista’s figures, the Spanish real estate market is booming, offering numerous opportunities for buyers. Whether you are looking for a holiday home, a rental investment, or a primary residence, now is a great time to buy. Cities like Malaga and Valencia show strong growth, while more stable markets like Madrid and Barcelona offer safe investments. This is the ideal moment to take advantage of the current dynamic in the Spanish real estate market.

Overview: Situated in the heart of Andalusia, Malaga is renowned for its year-round sunshine, stunning beaches, and rich cultural heritage. As the gateway to the Costa del Sol, it offers a unique blend of history, vibrant city life, and a laid-back coastal atmosphere. Popular neighborhoods like La Malagueta, El Palo, and Pedregalejo attract a diverse mix of residents, from local families to international expatriates.

Property Market: Malaga’s property market offers a wide range of options, from modern beachfront apartments to charming Andalusian townhouses and luxurious villas. Whether you’re looking for a sleek city apartment or a tranquil seaside home, Malaga has something for every taste and budget. Prices are generally more affordable than in nearby Marbella, making it an attractive destination for those seeking quality living with great value.

Average Price per m²: €3,069 (as of 2024).

  • Overview: Situated in the heart of Andalusia, Malaga is renowned for its year-round sunshine, stunning beaches, and rich cultural heritage. As the gateway to the Costa del Sol, it offers a unique blend of history, vibrant city life, and a laid-back coastal atmosphere. Popular neighborhoods like La Malagueta, El Palo, and Pedregalejo attract a diverse mix of residents, from local families to international expatriates.
  • Property Market: Malaga’s property market offers a wide range of options, from modern beachfront apartments to charming Andalusian townhouses and luxurious villas. Whether you’re looking for a sleek city apartment or a tranquil seaside home, Malaga has something for every taste and budget. Prices are generally more affordable than in nearby Marbella, making it an attractive destination for those seeking quality living with great value.
  • Average Price per m²: €3,069 (as of 2024)
  • Overview: A cosmopolitan city that blends historic architecture with a modern lifestyle. It’s known for its cultural scene, beaches, and unique neighborhoods like Gràcia and Eixample.
  • Property Market: Barcelona has a diverse market with historic apartments, modern penthouses, and properties with sea views. Central areas like Eixample are pricier, but more affordable options exist in neighborhoods like Poble Sec.
  • Average Price per m²: €4,528
  • Overview: A vibrant city that combines modern architecture with historic charm. It boasts a laid-back Mediterranean lifestyle with beautiful beaches and a renowned culinary scene.
  • Property Market: Offers good value for money, with a range of properties from city center apartments to modern homes in suburbs like Ruzafa.
  • Average Price per m²: €2,664
  • Overview: The capital city offers a dynamic urban lifestyle with rich cultural and entertainment options. Neighborhoods like Salamanca and Chamberí are known for their elegance and luxury.
  • Property Market: Madrid’s market caters to all budgets, from luxury apartments in the city center to more affordable options in emerging neighborhoods like Carabanchel.
  • Average Price per m²: €4,717
  • Overview: Located on the Costa Blanca, Alicante is known for its beautiful beaches, mild climate, and a more relaxed coastal lifestyle. It’s popular among those looking for a quieter environment.
  • Property Market: Offers a variety of options, from affordable apartments to villas with sea views. It’s an attractive market for both holiday homes and permanent residences.
  • Average Price per m²: €2,133
  • Overview: Stretching along the southeastern coast, Costa Blanca includes towns like Benidorm, Torrevieja, and Denia. Known for its clear waters and lively tourist atmosphere.
  • Property Market: Diverse options ranging from budget-friendly apartments to luxury beachfront villas. Popular for holiday homes and rental investments.
  • Average Price per m²: €2,100
  • Overview: Located in Catalonia, Costa Brava is famous for its rugged coastline, hidden coves, and charming seaside towns like Tossa de Mar and Cadaqués.
  • Property Market: Offers a mix of traditional Catalan houses, seaside apartments, and modern villas. It’s a preferred choice for those seeking a more tranquil and picturesque setting.
  • Average Price per m²: €3,200
  • Overview: Mallorca is the largest of the Balearic Islands, known for its stunning beaches, mountains, and cosmopolitan capital, Palma. It attracts a mix of celebrities and international buyers.
  • Property Market: Offers a range of properties, from rustic fincas to luxury villas and sea-view apartments. The market is generally more upscale due to high demand.
  • Average Price per m²: €4,272
  • Overview: Known for their year-round warm climate, the Canary Islands attract those looking for a holiday home in a subtropical setting. Tenerife and Gran Canaria are particularly popular.
  • Property Market: Offers a variety of options, from beachfront apartments to rural villas. More affordable compared to mainland coastal regions.
  • Average Price per m²: €2,048 (Tenerife) and €2,340 (Gran Canaria)
  • Overview: Seville is the cultural heart of Andalusia, known for its historic architecture, flamenco music, and vibrant festivals. It’s ideal for those looking to immerse themselves in Spanish culture.
  • Property Market: Mostly consists of traditional Andalusian townhouses and modern apartments. Offers more affordable options compared to coastal regions.
  • Average Price per m²: €2,354
  • Overview: A historic city located at the foot of the Sierra Nevada mountains, Granada is famous for the Alhambra Palace and its Moorish heritage.
  • Property Market: Offers a mix of properties, including charming townhouses in the Albaicín district and modern flats. It’s relatively affordable and popular among students and retirees.
  • Average Price per m²: €2,220
Scenic coastal view in Spain with boats and waterfront properties, overlaid with the word 'Taxes' and the Spanish flag, symbolizing real estate taxes in Spain.

8. Taxes and Fiscal Obligations

It’s essential to understand the various taxes and fiscal obligations that come with ownership. These taxes can vary depending on the property’s location, its use (primary residence, holiday home, rental property), and your residency status. Here’s a detailed look at the main taxes you need to be aware of as a property owner in Spain:

Annual Property Tax (Impuesto sobre Bienes Inmuebles, IBI)

IBI is an annual local property tax that all property owners in Spain must pay. It’s similar to council tax in other countries and is used to fund local services such as street cleaning, waste collection, and public infrastructure.

  • How It’s Calculated: The tax is based on the cadastral value (valor catastral) of the property, which is an official value assigned by the local municipality. This value is usually lower than the market value and is periodically updated. The IBI rate can range from 0.4% to 1.3% of the cadastral value, depending on the municipality. For example, in larger cities like Madrid and Barcelona, the rate is typically higher than in smaller towns or rural areas.
  • Payment: The IBI is paid annually, usually in one or two installments. Failure to pay this tax can lead to penalties and even a lien on the property.

Advices

  • Check the IBI Rate: Before purchasing a property, ask the seller or your real estate agent about the current IBI rate and the property’s cadastral value to estimate your annual tax bill.
  • Budget for IBI: Include the IBI in your annual budget to avoid surprises.

Income Tax on Rental Income

If you decide to rent out your Spanish property, you’ll need to pay income tax on the rental income, regardless of whether you are a resident or a non-resident.

  • For Residents: If you are a resident of Spain, rental income is added to your overall income and taxed at the progressive rates of the Spanish personal income tax (Impuesto sobre la Renta de las Personas Físicas, IRPF), which range from 19% to 47%, depending on your total income. However, residents can benefit from certain deductions, such as expenses for maintenance, repairs, mortgage interest, and property management fees.
  • For Non-Residents: Non-residents are taxed at a flat rate of 24% on the gross rental income if they are from a non-EU country. For EU/EEA residents, the tax rate is lower at 19%, and they can also deduct certain expenses related to the property, such as maintenance costs, property management fees, and utilities. Non-residents must declare and pay this tax quarterly.

Advices

  • Keep Detailed Records: Maintain thorough records of all rental income and allowable expenses to accurately declare your taxes.
  • Seek Professional Help: Consider hiring a tax advisor, especially if you’re a non-resident, to ensure compliance with Spanish tax laws and to benefit from any available deductions.

Capital Gains Tax (Impuesto sobre la Renta de No Residentes, IRNR)

Capital Gains Tax (CGT) applies when you sell your property in Spain. It is calculated on the profit made from the sale (i.e., the difference between the sale price and the original purchase price, minus allowable expenses such as improvements and transaction costs).

  • For Residents: Residents are subject to CGT at progressive rates, which are 19% for the first €6,000 of gain, 21% for gains between €6,000 and €50,000, and 23% for any amount above €50,000. However, residents may be exempt from CGT if the property was their primary residence and they reinvest the proceeds into another primary residence in Spain.
  • For Non-Residents: Non-residents are taxed at a flat rate of 19% on the capital gain. Unlike residents, non-residents have fewer exemptions and deductions available.
  • Retention Tax: When a non-resident sells a property, the buyer is required to withhold 3% of the sale price and pay it to the tax authorities on the seller’s behalf. This amount is a prepayment of the seller’s CGT liability. The seller must then file a tax return to calculate the actual CGT due. If the 3% withholding exceeds the actual CGT liability, the seller can claim a refund.

Advices

  • Plan for CGT: If you’re considering selling your property, factor in the potential CGT when calculating your net profit.
  • Consider Exemptions: Residents should explore opportunities for CGT exemptions, such as reinvesting in another primary residence.

Wealth Tax (Impuesto sobre el Patrimonio)

Wealth tax is an additional consideration for high-net-worth individuals. It is an annual tax on the net value of assets owned in Spain.

  • Threshold: The wealth tax threshold varies by region, but it generally applies to individuals whose net assets exceed €700,000 (with an additional €300,000 allowance for the primary residence).
  • Rates: The tax rates range from 0.2% to 2.5%, depending on the total value of assets. Each autonomous community can set its rates and exemptions, so it’s important to check the local regulations.

Advices

  • Seek Specialist Advice: If your assets exceed the threshold, consult a tax specialist to understand your obligations and possible strategies to minimize the tax burden.
Golden Visa Spain

9. Residency and Visa Options

Golden Visa (Investor Visa)

Allows non-EU citizens to obtain residency in Spain by investing at least €500,000 in real estate. It offers the right to live, work, and travel freely within the Schengen Area and extends to the investor’s immediate family. However, it’s crucial to stay informed, as the Golden Visa program is currently under review and may soon come to an end, even though it is still valid for now. See the latest updates (Google)

  • Requirements:
    • Minimum investment of €500,000 in Spanish real estate.
    • Clean criminal record.
    • Valid health insurance in Spain.
    • Proof of sufficient financial means for the investor and family.
  • Benefits:
    • Residency for the investor and immediate family (spouse and dependent children).
    • Right to work and live in Spain.
    • Travel freedom within the Schengen Area for 90 days within any 180-day period.
  • Current Status (2024): The program is under review, and potential changes or restrictions may be applied soon. Prospective applicants should stay informed about updates or read our article : Spain Ends Golden Visa: Exploring New Residency Options for Non-EU Investors

Non-Lucrative Visa

Designed for non-EU citizens who want to reside in Spain without engaging in work activities. Ideal for retirees or individuals with sufficient passive income, requiring proof of financial means and private health insurance.

  • Requirements:
    • Proof of sufficient funds (around €27,000 per year for the main applicant, with additional funds required for dependents).
    • Private health insurance coverage in Spain.
    • No criminal record in the home country.
  • Benefits:
    • Initial residency for one year, renewable for two-year periods.
    • Travel within the Schengen Area for up to 90 days in any 180-day period.
    • Eligibility for permanent residency after five years of continuous residency in Spain.
  • Restrictions: Holders cannot engage in work or professional activities in Spain.

Entrepreneur Visa

Tailored for non-EU citizens planning to start an innovative business in Spain. Requires a comprehensive business plan and shows the project’s economic impact and potential job creation.

  • Requirements:
    • Submission of an innovative business plan that contributes to the Spanish economy.
    • Sufficient funds to support the business and personal living expenses.
    • Proof of health insurance in Spain.
  • Benefits:
    • Residency for the entrepreneur and family members.
    • Permission to work and develop the business in Spain.
    • Freedom to travel within the Schengen Area.
  • Application Process: Involves submitting a detailed business plan and undergoing evaluation by the Spanish authorities to assess the project’s potential economic impact.

Student Visa

For non-EU citizens enrolled in educational programs in Spain, allowing them to reside in the country during their studies and work part-time (up to 20 hours per week)

  • Requirements:
    • Proof of enrollment in a recognized educational institution in Spain.
    • Proof of sufficient funds to cover living expenses during the study period.
    • Health insurance for the duration of the stay.
  • Benefits:
    • Residency in Spain for the duration of the studies, with the option to renew if the course is extended.
    • Ability to work part-time (up to 20 hours per week) while studying.
    • Potential to transition to other residency permits after completing studies, such as the entrepreneur or work visa.
House in Malaga

10. Legal Checks and Due Diligence

Title Deed Check (Escritura Pública)

  • What It Involves: This check involves verifying that the seller is the legitimate owner of the property. The title deed (Escritura Pública) is an official document that proves ownership and should match the information in the Property Registry.
  • Why It’s Important: Ensuring the seller has clear ownership rights prevents potential disputes or claims on the property after the sale.

Property Registry Check (Registro de la Propiedad)

  • What It Involves: This step confirms that the property is free of debts, mortgages, or other encumbrances. The Property Registry (Registro de la Propiedad) provides a record of any charges, liens, or legal claims against the property.
  • Why It’s Important: Identifying any debts or claims attached to the property is crucial, as these obligations can transfer to the new owner if not resolved before the sale.

Urbanistic Check (Urbanismo)

  • What It Involves: This involves verifying that the property complies with local urban planning and zoning laws. This check ensures that the property has the necessary building permits, complies with local regulations, and is not subject to any planning restrictions or demolition orders.
  • Why It’s Important: Non-compliance with urban planning laws can result in fines, restrictions on property use, or even forced demolition, posing a significant risk to the buyer.
A real estate hunter stands in front of a scenic view of the Spanish coastline, featuring a beach and coastal town

10. Hiring a Real Estate Agent or Property Hunter

When buying property in Spain, hiring a professional can greatly simplify the process. While a local real estate agent is commonly used, engaging a property hunter (chasseur immobilier) is an increasingly popular option, especially for foreign buyers.

Traditional Real Estate Agent

  • Role: A local real estate agent assists in finding properties, negotiating prices, and guiding you through the buying process. They have valuable market insights and can help you find properties that match your criteria.
  • Fees: Agent fees typically range from 3-5% of the property price and are usually paid by the seller. This means their services cost you nothing directly, but it’s important to remember that they are primarily motivated to sell properties listed with them.

Property Hunter

  • Role: A property hunter works exclusively for the buyer. They provide a comprehensive service, including searching for properties that meet your specific needs, conducting visits on your behalf, and shortlisting the best options. This is particularly beneficial if you live abroad and cannot easily travel to Spain for property viewings. Unlike traditional agents, property hunters often include a legal service within their team, handling all due diligence checks, translations, and legal verifications to ensure that each property is in good standing.
  • Advantages:
    • Saves Time: A property hunter conducts all preliminary visits, eliminating unsuitable properties and presenting you only with the best options.
    • Legal Assurance: They often have an in-house legal team that takes care of all the necessary checks, such as title deeds, property registry status, and urbanistic compliance. This ensures a smoother and safer buying process.
    • Convenient for Overseas Buyers: If you are purchasing from abroad, a property hunter manages the entire process on your behalf, ensuring that every property you consider is legally sound and fits your requirements.
  • Fees: The property hunter’s fee is usually between 4-5% of the purchase price, paid by the buyer. Although this adds to the overall cost, it often results in savings in the long run by avoiding problematic properties and ensuring all transactions are legally secure.

Advice

  • Consider Your Needs: If you are located abroad or want a hassle-free experience, a property hunter can be a valuable asset, handling every aspect from property selection to legal checks.
  • Budget for Fees: Remember that while a property hunter’s fees are paid by the buyer, their comprehensive service can save you both time and potential legal issues, making it a worthwhile investment.

Real Estate Dilemma: Go Classic or Go Hunter?

Aspect Traditional Real Estate Agent Property Hunter
Motivation
  • Focus on listings they represent
  • May prioritize quick sales
  • Works for the buyer
  • Access to a wider range of properties
  • May miss exclusive listings
Scope of Service
  • Property search and viewings
  • Limited legal support
  • Full service (search, visits, legal)
  • Higher upfront cost
Legal Assurance
  • Separate lawyer needed
  • Additional costs
  • Includes legal checks
  • Less transparency at times
Time and Effort
  • More buyer involvement
  • Direct control
  • Saves time
  • Less personal involvement
Fees
  • Seller pays (3-5%)
  • Extra legal fees
  • Buyer pays (4-5%)
  • Includes all services
  • Higher initial cost
Objectivity
  • Market insights
  • May push own listings
  • Focus on buyer’s needs
  • Limited influence in some markets
Best For
  • DIY approach
  • Direct control
  • Hands-off experience
  • Less control over process

In short, a property hunter is often the better choice if you’re buying from a distance, can’t make frequent trips, or want to avoid the added cost of a lawyer and the hassle of doing research yourself. On the other hand, if you’re local and speak Spanish, working with a traditional real estate agent might be more suitable.

12. The Role of the Notary in Spain

In Spain, the notary plays a crucial role in the property buying process, acting as an impartial public official who ensures that the transaction is formalized according to Spanish law. However, it’s important to understand the limitations of the notary’s role to avoid misunderstandings about the legal safety of your purchase.

  • Drafting the Public Deed (Escritura): The notary prepares the Escritura, the official document that transfers ownership from the seller to the buyer. This document includes the essential details of the sale, such as the property’s description, sale price, and any conditions agreed upon by both parties.
  • Verifying Legal Compliance: While the notary ensures that the transaction complies with Spanish law, their role is limited. They will confirm the identity of the parties involved, check that the necessary taxes are paid, and verify that the property’s basic information matches the details in the Property Registry. However, the notary does not perform the in-depth legal checks necessary to uncover potential issues such as debts, liens, urbanistic compliance, or disputes over the property.
  • Registering the Property: After the signing, the notary will send the deed to the Land Registry to record the change of ownership. This step is crucial as it legally registers you as the property’s new owner.

Crucial Legal Checks: Why You Need a Lawyer or Property Hunter with Legal Services

While the notary provides an essential service, they do not conduct thorough due diligence on the property. This is why hiring a lawyer or a property hunter with an integrated legal service is crucial:

  • Lawyer: A lawyer specializes in conducting all necessary legal checks, such as verifying the property’s title, checking for existing debts or encumbrances, and ensuring urbanistic compliance. They safeguard your interests throughout the buying process, ensuring the property is legally sound.
  • Property Hunter with Legal Services: If you opt for a property hunter, they often have an in-house legal team that conducts the same level of due diligence. They ensure that all documents are in order, perform translations if needed, and provide a full legal review of the property’s status.

Why This Matters:

Not relying solely on the notary for legal verification is essential because, without thorough due diligence, you risk acquiring a property with hidden issues that can lead to costly legal disputes or financial loss.

13. Common Mistakes to Avoid

Buying property in a foreign country can be challenging, and there are several common pitfalls to watch out for when purchasing in Spain:

  • Skipping Legal Checks: One of the most critical errors is neglecting due diligence. Failing to verify the property’s legal status, including ownership and possible encumbrances, can lead to costly disputes later. Always hire a qualified lawyer to perform these checks thoroughly. For a more detailed discussion on this topic, refer to our article on What are the pitfalls of buying a property in Spain?.
  • Underestimating Costs: Many buyers focus solely on the purchase price and overlook additional expenses such as taxes, notary fees, registration costs, and maintenance expenses. Make sure to budget for these to avoid financial strain. The article also highlights hidden costs and fees that can catch buyers off guard, stressing the importance of comprehensive financial planning.
  • Not Understanding Local Regulations: Spain’s property laws can vary by region. For example, rules regarding property renovations, land use, and rental licenses differ from one area to another. Ensure you are well-informed about local regulations to avoid legal issues in the future. Cultural and language barriers can also complicate this process, making it crucial to hire bilingual professionals who understand the intricacies of Spanish property law.

To explore these and other potential pitfalls in more detail, check out our comprehensive guide: What are the pitfalls of buying a property in Spain?. This article covers everything from financial risks and market fluctuations to cultural differences and communication challenges, providing you with essential knowledge to ensure a successful property purchase in Spain.

14. Post-Purchase Considerations

Once you have successfully purchased a property in Spain, several post-purchase factors require attention to ensure that you can enjoy your new home without any worries:

  • Property Maintenance and Management: If you do not reside in Spain year-round, consider hiring a property management company to handle maintenance, repairs, and any issues that arise. This service is especially useful if you plan to rent out the property to generate income.
  • Insurance: Securing adequate insurance for your property is essential. Property insurance in Spain can cover various risks, including damage from natural disasters, theft, and accidents. Carefully review insurance policies to select coverage that suits your property’s needs.
  • Community Fees: If your property is part of a residential complex or community (e.g., apartments or gated communities), you will likely need to pay community fees. These fees cover shared expenses such as building maintenance, security, and communal facilities like pools and gardens. It’s essential to factor these ongoing costs into your budget.

15. Future Property Market Trends in Spain

Spain’s economy shows promising growth, with a projected expansion of 2.1% in 2024 and 1.9% in 2025, driven by robust domestic demand and a resilient labor market. The implementation of the Recovery and Resilience Plan (RRP) is expected to boost investment, while headline inflation is projected to continue its downward trend. The unemployment rate is also forecasted to decline, further solidifying Spain’s economic recovery. Despite potential risks, particularly concerning external demand and private investment due to the economic health of Spain’s main trading partners, the Spanish real estate market remains relatively stable. This stability is supported by ongoing domestic demand, a strong labor market, and sustained interest from foreign investors. Staying informed on these economic trends is crucial for potential investors and property buyers, as they can significantly impact market dynamics in the coming years.

For more details on Spain’s economic outlook, visit the official European Commission’s economic forecast for Spain.

FAQ

  1. Can foreigners buy property in Spain?
    Yes, foreigners can buy property in Spain with virtually the same rights as Spanish nationals. The process is straightforward, and there are no restrictions on foreign ownership of land or property.
  2. Why is an NIE necessary for property purchase?
    An NIE (Número de Identificación de Extranjero) is required for property transactions in Spain. It is essential for signing contracts, paying taxes, and conducting other legal and financial activities related to property ownership.
  3. What are the key steps in the property buying process?
    The main steps include signing a Reservation Agreement, conducting due diligence, signing a Private Purchase Contract, and finalizing the sale with the signing of the Escritura (title deed) at a notary.
  4. What additional costs should I consider?
    In addition to the property’s price, you should budget for costs such as Property Transfer Tax (6-10%), VAT (10% for new builds), notary and registration fees (1-2%), legal fees (around 1%), and other expenses like bank fees and property insurance.
  5. Is it necessary to hire a lawyer when buying property in Spain?
    While not mandatory, hiring a lawyer is highly recommended. They perform due diligence to ensure the property is free of legal issues, verify the title, and handle all legal aspects of the transaction, protecting you from potential disputes.
Beny Brand
Beny Brand

Real Estate Hunter

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