Buying Property in Spain vs USA (2025)

Choosing Between Spain and the USA: What This Guide Covers (2025)

“If you’re an American weighing a beach flat in Spain against a condo in Florida,” this guide shows—briefly and clearly—how the two options differ in costs, taxes, financing, rental rules, and residency.

You’ll see side-by-side comparisons, compact tables, and a worked €/$500k example to understand upfront vs annual costs, yield vs lifestyle, and how 2025 rules affect your plan.

• Who it’s for: Americans considering a second home, retirement base, or an investment property.
• What you’ll get: Practical ranges (not cherry-picked listings), checklists you can act on, and links to official sources.
• How we compare: Search → due diligence → closing → ownership → exit, with the key tax and licensing touchpoints at each step.

Market Snapshot: Spain vs USA in 2025

Price Levels & Trends

Spain. Prices are rising fast. National indices show high single to low double-digit YoY gains in 2025, with asking prices above €2,400/m² in many metros. Marketing times have shortened as late-2024 inventory tightened.
USA. National pricing is flat to mildly positive. Median sale prices hover around $400k+, with wide regional variance: stronger Sunbelt/Midwest, softer expensive coastal hubs. Days on market ticked up versus 2024 in several metros.

Supply, Demand & Seasonality

Spain. Demand is fueled by locals and foreign buyers, especially on the coasts (Costa del Sol, Balearics). Spring and autumn are the busy purchase seasons; summer peaks in tourist zones.
USA. Activity is rate-sensitive: higher mortgage rates keep owners “locked-in,” limiting new listings. Classic spring/summer seasonality remains, but time-to-sell is longer in some markets.

Market at a Glance

How the Buying Process Works (Spain vs USA)

Spain: Step-by-Step (what actually happens)

Buying in Spain is notary-led and lawyer-heavy. First, get your NIE so you can sign, pay taxes, and open accounts. Your lawyer runs due diligence (nota simple, licenses, debts, HOA/IBI). You typically reserve with an arras deposit (~10%) that locks price and timing.

• Financing: Bank orders a tasación (valuation); offer and mortgage deed run in parallel.
• Closing: You sign the public deed (escritura) before a Notary; funds settle via bank draft/transfer.
• After: Deed is filed at the Land Registry; you pay ITP (resale) or VAT+AJD (new), then switch utilities/HOA.
• Protection: Notary + Registry give strong title records, but your lawyer is your true safeguard. Title insurance is rare.

United States: Step-by-Step (how most deals run)

Deals are agent + escrow/title driven. You search via MLS with a buyer’s agent, then sign a purchase contract with contingencies (inspection, appraisal, financing, clear title) and earnest money held in escrow.

• Checks: Home inspection; lender appraisal if financed.
• Title: Title company or closing attorney does the search and issues title insurance.
• Closing: Sign deed/loan docs; funds disburse via escrow; deed gets recorded with the county.
• Variations: Attorney states (NY/MA/SC) close with lawyers; escrow states (CA/AZ/WA) close via title/escrow.

Timeline & Frictions (side-by-side)

• Speed: Spain: ~6–10 weeks post-arras (longer with mortgages). USA: ~30–60 days from contract (cash can be faster).
• Money down: Spain arras ~10% with strong remedies; U.S. earnest 1–3%, refundable under contingencies.
• Who protects you: Spain: lawyer + Notary/Registry. USA: contingencies + title insurance + (sometimes) attorneys.
• Common snags: Spain: planning irregularities, HOA/IBI arrears, STR limits, bank timing. USA: appraisal gaps, inspection renegotiations, HOA approvals, lender conditions.

Transaction Costs & Ongoing Costs

Upfront (Closing) Costs

Spain (resale)
Expect ITP 6–10% plus modest fees. With notary + registry + gestor (~€1.3–3k) and lawyer (~0.8–1.5%), most buyers land around ~7.5–12% of price. If you finance, add tasación €300–600; bank deed taxes are largely bank-borne since 2019.

Spain (new build)
Budget 10% VAT + ~1.0–1.5% AJD. Add the same notary/registry/gestor and lawyer ranges. All-in, ~12–13.5% is typical (before furnishings).

United States
Buyer closing costs are lighter. Transfer/recording 0–2%, title insurance ~0.3–0.6% (owner), and escrow/attorney $500–$2,000. Cash deals often total ~1–3%; with a mortgage, ~3–5% after appraisal $500–800 and origination ~0.5–1% of the loan.

Annual & Recurring

Spain

• IBI: ~0.4–1.1% of cadastral value (often ~40–60% of market), so effective burden ≈ ~0.2–0.6% of market.
• Community (HOA): €60–€200/mo (more for amenities).
• Insurance: €250–€450/yr. Utilities: €120–€220/mo.
• Non-residents: imputed income if vacant; IRNR on rents (19% net EU/EEA; 24% gross non-EU).

United States

• Property tax: ~0.5–2.0% of assessed/market value.
• HOA/condo: $50–$400/mo (can be higher full-service).
• Insurance: $1,200–$3,000/yr (coastal risk can spike). Utilities: $150–$300/mo.
• No federal imputed tax on second homes.

Cost Stack on a €/$500k Purchase (quick view)

Taxes When You Buy, Own & Sell

At Purchase

Spain.

• Resale: ITP 6–10% (by region), plus notary/registry fees.
• New build: VAT 10% + AJD ~1.0–1.5%, plus notary/registry.

United States.

• No national VAT/stamp duty. Buyer costs are mainly local transfer/recording (0–2%) plus title/escrow/attorney.

While You Own

Spain.

• IBI: ~0.4–1.1% of cadastral value (often below market).
• Wealth tax: regional thresholds/exemptions apply.
• If vacant (non-resident): imputed income taxed 19% (EU/EEA) or 24% (non-EU).
• If rented (IRNR): EU/EEA: 19% on net; non-EU: 24% on gross (no deductions).

United States.

• Property tax: ~0.5–2.0% of assessed/market value (state/county).
• Rental income: Non-residents can elect ECI (Effectively Connected Income) and be taxed on net at graduated federal rates (+ state, if any).
• Depreciation: 27.5 years straight-line on building lowers taxable income.

When You Sell

Spain.

• CGT: 19% (EU/EEA) / 24% (non-EU) on gain.
• 3% withholding: buyer withholds against your final CGT.
• Plusvalía municipal: local land-value tax based on cadastral land value and holding period.

United States.

• Federal CGT: 0/15/20% (bracket-dependent) + possible state tax.
• FIRPTA: buyer withholds 15% of gross price when seller is foreign; reconcile on filing.

Tax Checklist (Buy / Own / Sell)

Rental Strategy & Regulations

Long-Term Rentals (LTR)

Spain. LTRs favor tenant stability. Standard terms are 5 years (individual landlord) or 7 years (corporate), with automatic renewals. In designated “stressed” areas, rent hikes follow a cap/index rather than full CPI. Demand is strong in Madrid/Barcelona/Valencia and the coasts, but evictions can take months if contested—budget time and legal costs.

Do it right: buy in buildings with clear bylaws, confirm IBI/HOA are current, and keep a vacancy/legal reserve.

United States. Most leases run 12 months with renewals. Rent control exists in select jurisdictions (e.g., parts of CA/NY/OR); elsewhere, increases are market-based with notice. Yields tend to be stronger in Sunbelt/Midwest than in high-cost coastal metros. Eviction timelines vary widely by state—know the local playbook.

Do it right: screen markets for landlord-friendliness, property tax load, insurance costs, and HOA rules.

Short-Term Rentals (STR)

Spain. STRs are heavily license-driven. Many cities/regions require registration; Barcelona is tight, Balearics/Canaries/Andalusia use zoning and caps. Expect guest registration, safety kit, and tourist tax collection. Fines for non-compliance are steep.
U.S. Rules are city-specific (NYC very restrictive; LA/SF/Honolulu/Miami regulate with permits, night caps, or primary-residence tests). HOAs often ban sub-30-day stays even if the city allows them. Plan for occupancy taxes and audits.

Renting Framework Snapshot

Practical Tips

• Underwrite buffers: vacancy (LTR 4–8 wks; STR realistic occupancy), capex, legal.
• STR “trifecta”: city license + building/HOA permission + neighborhood tolerance.
• Stress-test: rate hikes, insurance spikes (U.S. coastal), rising community fees (Spain).
• Tax angle: Spain STRs can trigger business-style obligations; U.S. STRs change tax/zoning treatment—plan filings early.

Financing & Leverage

Spain Mortgages for Americans (Non-Residents)

Banks lend conservatively: 60–70% LTV (often 60–65% if income is abroad), 20–30-year terms, rates ~3.2–4.5% in 2025 (profile/bank dependent).

• Documents: Passport + NIE, last 2–3 years of tax returns, 6–12 months of bank statements, employment/contract (or company accounts), debt summary, tasación (valuation).

• Fees (approx. USD): Valuation $330–$660; bank arrangement 0–1%; home insurance required (life insurance sometimes). Since 2019, many mortgage-deed costs are paid by the bank—confirm in the FEIN/ESIS.

• Underwriting focus: Global DTI ≤ 30–35%, documented source of funds, fully legal property (licenses/first occupancy).

U.S. Mortgages for Foreign Nationals

Available but with larger down payments and rate add-ons vs residents.

• Typical LTV: 60–70% (30–40% down).

• Rates/terms: Often +150–300 bps vs prime U.S. rates; 30-year fixed sometimes available; ARMs common.

• Documents: Passport, ITIN (or plan to obtain), proof of foreign income/assets, bank/credit references, reserves.

• Residents (U.S. buyers): Easier access to 30-year fixed with 5–20% down at mainstream rates.

• Why many buy cash: Documentation frictions, appraisal gaps, higher rates, and speed to close.

Impact on ROI (illustrative on $500,000)

Spain (non-resident, long-term rental)

• Price: $500,000

• LTV: 65% → $325,000 loan @ 3.8% / 25 years → ~$20.1k/year debt service

• Gross rent (~4.5%): $22.5k/year

• Operating expenses (IBI/HOA/insurance/maintenance): ~$6.2k/year

• NOI: $16.3k/year → cash flow ≈ −$3.8k/year

• Year-1 principal repaid: ~$7.8k (helps total return)

• Breakeven guide: Mortgage constant ~6.2% → needs ~4.0% cap rate at 65% LTV just to cover debt service; after opex, many markets need ≥5% to go positive.

United States (80% LTV, resident-style loan)

• Price: $500,000; $400,000 loan @ 6.75% / 30 years → ~$31.1k/year debt service

• Gross rent (~6%): $30k/year

• Operating expenses: ~$18k/year

• NOI: $12k/year → cash flow ≈ −$19.1k/year

• Breakeven guide: Mortgage constant ~7.8% → needs ~6.24% cap rate at 80% LTV to cover debt service.

Levers to improve outcomes: Lower LTV, buy higher-cap-rate assets (small multis/secondary markets), or secure cheaper debt.

Sensitivity (rules of thumb)

• +100 bps rate (Spain case) → ~−$3–4k/year cash flow at 65% LTV.

• +1% yield on $500k → +$5k/year rent.

• Short-term rentals (STR): Can reach ~6–10% gross, but carry higher opex and licensing risk—model occupancy conservatively.

Residency, Visas & Time Limits

Spain: Living Legally After You Buy

Buying a Spanish home does not grant residency. The real-estate Golden Visa is discontinued. Without residency, Americans can stay up to 90 days in any 180 across Schengen.

Common paths for longer stays

• Non-Lucrative Visa (NLV): For retirees/independent income; private health insurance required; no local work.
• Digital Nomad Visa (DNV): For remote work with foreign employer/clients; income thresholds apply.
• Other routes: student, family, employer-sponsored, entrepreneur.

Timing & tips

• Typical sequence: consulate filing → approval → TIE card in Spain (often ~1–3 months after arrival, varies).
• Owning a home can support your file (accommodation/means) but is not a legal basis by itself.

United States: Owning ≠ Immigration Status

A U.S. home purchase gives no visa or green card. You still enter on ESTA (up to 90 days) or B-2 (often up to 6 months, at CBP discretion).

Investor/worker options (not tied to a house)

• EB-5: $800k–$1.05M in a job-creating enterprise.
• E-2 (treaty only): Substantial investment in an active business you direct.
• Work visas (H-1B, L-1, O-1) depend on employment/ability.

Case Studies (Lifestyle vs Investment)

“Sun & Lifestyle”: Retiree on the Costa del Sol

A semi-retired U.S. couple wants sun, healthcare access, and walkability. They target a €450–550k two-bed in Málaga/east Marbella, accepting Spain’s higher upfront costs (~7–12% resale).

• Holding costs: IBI €450–800/yr, HOA €120–200/mo, insurance €300–500/yr, utilities €120–180/mo.
• Residency: Likely NLV (passive income + private insurance).
• Rent when away (LTR): €1,300–1,900/mo; net yields often ~3–4.5% without STR licensing hassle.
• Risk control: Low leverage (≤60–65% LTV), cash buffer for HOA specials.

Why it works: Lifestyle first, steady costs, and simple long-term let to offset expenses.

“Cash-Flow Focus”: U.S. Sunbelt Duplex

A yield-oriented buyer looks at a $450–550k duplex in a landlord-friendly Sunbelt suburb.

• Financing: Residents often 20% down, 30-yr fixed; foreign-national loans need 30–40% down at higher rates.
• Illustrative $500k deal: Rents $48k/yr less vacancy; opex ~$15–16.5k → NOI ~$29–30k. Debt on $400k @ 6.75% ≈ $31.1k/yr → near breakeven at list.
• Tax levers: Depreciation (27.5 yrs); consider cost seg and 1031 (for U.S. residents).

Why it works: Target 7–8% gross or small multis to push cash-on-cash positive; watch property tax and insurance creep.

“Hybrid”: City Pied-à-Terre — Madrid vs Miami

A professional uses the home 3–4 months/yr, renting the rest.

• Madrid (~€400k 1-bed): LTR €1,300–1,700/mo (~3.9–5.1% gross). STR in central buildings is often restricted; plan on LTR. Lower HOA/insurance, high walkability.
• Miami (~$500k condo): Many buildings ban <30-day stays—find STR-permitted stock. LTR $2,600–3,200/mo; STR can generate seasonal cash flow but faces HOA + insurance + TOT (Transient Occupancy Tax) and occupancy swings.

Pick Madrid for cost control and easy LTR; pick Miami if you can secure an STR-legal building and manage higher carrying costs.

Quick Checklist (apply to any case)

• Licenses & bylaws: STR permitted? HOA/community rules aligned?
• True all-in yield: Include taxes, HOA/IBI, insurance, mgmt, capex, vacancy.
• Leverage fit: Aim DSCR ≥ 1.20× at conservative rents/rates.
• Exit taxes: Spain 3% retention + CGT + plusvalía; U.S. FIRPTA 15% + CGT.
• Insurance reality: U.S. coastal premiums and Spain HOA assessments can swing returns.

Choosing Spain vs the USA:

If you’re lifestyle-first, Spain tends to win. You get a Mediterranean base, walkable cities, strong public healthcare, and generally lower annual carrying costs. You’ll accept higher upfront taxes (ITP or VAT+AJD), lower LTV (60–70%), and modest long-term yields (~3–5% LTR; ~6–10% only where STR is licensed). The system is notary-led—your lawyer is key—and rent rules can cap increases in “stressed” areas. Buying a home doesn’t grant residency, but NLV/DNV can fit many Americans.

If you’re finance/leverage-first, the USA is often better. You’ll find high-LTV, long-term fixed loans (for residents), fast escrow/title closings, and a wide range of markets with ~4–8% LTR yields (higher in small multis/STR-legal pockets). Closings are cheaper, but expect higher annual property taxes (≈0.5–2%), rising insurance in some states, and city/HOA-specific STR rules.