​​Step-by-Step Guide to Buying Property in Spain as a Foreigner

1. Determine Your Budget and Financing Options

Before you start house-hunting, clarify your budget and how you will finance the purchase. Spain offers mortgages to non-residents, but typically banks require a higher down payment (often around 30% for non-residents). Get an idea of mortgage rates and obtain pre-approval if possible. Remember to account for purchase costs and taxes (approximately 10–15% of the property price on top of the purchase price). These costs include transfer tax or VAT, notary and registry fees, and legal costs.

Tip: Engage a Spanish-speaking mortgage broker or financial advisor to compare loan options. Having financing in place strengthens your negotiating position when you find the right property.

2. Obtain a NIE (Foreigner Identification Number)

A Número de Identificación de Extranjero (NIE) is an essential identification and tax number for foreigners in Spain. You’ll need a NIE to conduct any property transaction, open a bank account, or sign official documents. If you’re in Spain, you can apply at a National Police station (Oficina de Extranjería) using form EX-15 and your passport. If you’re not yet in Spain, you may apply through a Spanish consulate in your home country.

• Documents needed: Completed application form, original passport and copy, proof of why you need a NIE (such as a note stating you intend to purchase property), and a small fee (~€12) paid via form 790.
  
  

• Timeline: NIE issuance can be same-day in Spain or take a few weeks via consulate. Plan accordingly so you have your NIE before it’s time to sign contracts.
  
  

Having a NIE ready early will prevent delays once you’ve found a property. It will also serve as your fiscal identification number with authorities.

3. Open a Spanish Bank Account

While not strictly required by law, a Spanish bank account is highly recommended for foreign buyers. It makes transferring funds for the purchase and paying local expenses (like notary fees, taxes, and utilities) much easier. Many Spanish banks offer non-resident accounts, which you can open with a passport and proof of address abroad; some banks also ask for a certificate of non-residency.

Steps to open an account:

• Choose a bank: Look for banks known to be expat-friendly with English online banking (for example, Sabadell, BBVA, Santander). Consider fees – non-resident accounts may have quarterly maintenance fees.
  
  

• Documents: Bring your passport, NIE (if available), and proof of address (such as a utility bill from your home country). Some banks will obtain the non-residency certificate on your behalf.
  
  

• Initial deposit: Banks may require a small opening deposit. Be ready to fund the account once opened.
  
  

Having a local account allows you to safely transfer the purchase funds to Spain and later set up direct debits for property expenses.

4. Engage a Qualified Lawyer (Abogado)

Hire an independent real estate lawyer in Spain to represent your interests. This is crucial – your lawyer will conduct due diligence on the property, draft or review contracts, and ensure a safe transfer of title. Look for an English-speaking lawyer experienced in property law and representing foreign buyers (not the one directly affiliated with the seller or agent).

Your lawyer will:

• Verify property ownership and status: They obtain a Nota Simple from the Land Registry to confirm the seller is the owner and check for any debts, liens, or encumbrances on the property.
  
  

• Check planning permissions: Especially for rural or newly built properties, they ensure all building licenses are in order and the property is legal (no unpermitted extensions, etc.).
  
  

• Explain the contract terms: In Spain, it’s common to first sign a reservation contract or “contrato de arras” with a deposit. Your lawyer will review this to protect you (e.g., ensuring you get your deposit back if the sale cannot proceed due to seller’s fault).
  
  

• Handle funds and taxes: Lawyers often hold the deposit in escrow, prepare for payment of transfer taxes, and calculate what you owe at completion.
  
  

While hiring a lawyer is an added cost, it is a vital safeguard against potential legal pitfalls in a foreign system. It can save you from costly mistakes such as inheriting unpaid debts or buying a property with legal issues.

5. Find Your Ideal Property and Make an Offer

With your finances and team in place, start searching for properties. Whether you use online portals or local estate agents, always evaluate properties with due diligence:

• Location considerations: Investigate neighborhoods, proximity to services, and any development plans. If buying in a community (condo or urbanization), check community rules and fees.
  
  

• Property condition: If it’s a resale home, consider a survey especially for older properties. For new builds, verify the developer’s track record.
  
  

• Negotiation: It’s common to negotiate price in Spain. Your agent or lawyer can advise on a fair offer based on recent sales.
  
  

Once you agree on a price with the seller, you’ll typically sign a preliminary contract (Contrato de Arras) and pay a reservation deposit (often 5%–10%). This contract outlines the main terms and a target date for finalizing the sale. It also includes penalties: if the buyer backs out, you may forfeit your deposit; if the seller backs out, they must return your deposit plus an equal amount as penalty (so you receive double your deposit back). Ensure this contract is reviewed by your lawyer before signing.

6. Perform Thorough Due Diligence

After the deposit contract, there is usually a gap (a few weeks to a couple of months) before the final deed. This period is for due diligence. Your lawyer will carry out various checks, including:

• Title Check: Confirm the property’s registry details match what was advertised (owner, size, boundaries).
  
  

• Debts and Charges: In Spain, debts like a mortgage or unpaid property taxes can be attached to the property (not the person). Your lawyer will ensure any mortgage is canceled at sale or will be assumed properly, and check for unpaid IBI (property tax) or community fees. These should be cleared by seller or adjusted in the purchase price.
  
  

• Utilities: Verify there are no outstanding utility bills and that services (water, electricity) are properly installed and transferable.
  
  

• Urbanistic status: Ensure no zoning or planning issues. For example, if it’s a rural property, confirm it’s not on protected land and has a habitation certificate.
  
  

• Optional inspections: If not already done, you might commission a building survey for structural issues, especially for older homes.
  
  

If any issues arise, your lawyer will negotiate solutions (such as the seller resolving problems before closing or adjusting price). If a serious legal issue is discovered that cannot be resolved, you may have grounds to withdraw with full refund of your deposit, as long as your contract was properly drafted to allow this.

7. Finalize Financing and Prepare Funds

As closing day approaches, finalize your financing arrangements:

• If you’re taking a mortgage in Spain, the bank will do an appraisal of the property and issue a formal offer. You’ll sign the mortgage at the notary on the same day as the purchase. Make sure the bank’s conditions are clear and you have funds for any initial fees (banks may charge opening fees, etc.).
  
  

• If you’re financing from abroad or using savings, transfer the necessary amount into your Spanish bank account in advance. Large international transfers can take a few days. Watch exchange rates and consider using a foreign exchange service for better rates compared to typical banks.
  
  

Also, consider currency exchange risk – if your currency is not the euro, fluctuations can change the cost. Lock in a rate if needed through forward contracts or by transferring money when rates are favorable.

8. Sign the Public Deed (Escritura) at the Notary

Spain requires property sales to be executed in front of a Notary Public. The notary is an impartial official who will verify the identities, ensure both parties understand the deed, and formally witness the signing of the Escritura de Compraventa (title deed).

What happens on completion day:

• Both parties (buyer and seller) or their legal representatives meet at the notary’s office. If you do not speak Spanish, by law a translator should be present or your lawyer can translate.
  
  

• The notary confirms the final purchase price and payment method. Typically, the buyer provides a banker’s check for the remaining purchase amount (or transfers proof of transfer). Your lawyer often coordinates with the bank to have checks or transfers ready.
  
  

• If there is a mortgage, a separate mortgage deed is also signed at this time with a bank representative present.
  
  

• The notary reads out the key details of the deed (or a summary) and ensures both parties agree.
  
  

• You (buyer) hand over the payment, and the seller hands over the keys.
  
  

At this point, you become the legal owner of the property. The notary will provide you with an authorized copy of the signed deed on the spot or within a day or two. Congratulations – you now own property in Spain!

9. Pay Taxes and Register the Property

After the sale, there are critical post-completion steps:

• Pay Transfer Taxes: If you bought a resale (used) property, you must pay the Impuesto de Transmisiones Patrimoniales (ITP) – a transfer tax – to the regional tax authority. Rates vary by region (around 6% to 10% of the purchase price). If you bought a new property from a developer, instead of ITP you pay VAT (IVA), typically 10% for residential property, plus stamp duty (AJD) of around 0.5%–1.5%. Your lawyer or advisor will prepare the tax forms (Modelo 600 for ITP or 621, and Modelo 600 for AJD).
  
  

• Land Registry: The new deed must be registered at the Land Registry (Registro de la Propiedad) for the change of ownership to be fully public and secure. Your lawyer or a gestor will submit the notarized deed to the registry, along with proof that taxes have been paid. The registry will then record you as the new owner. This process can take a few weeks to complete.
  
  

• Notary and Registry fees: These are paid by the buyer. Notary fees are fixed by law based on property price (often a few hundred euros). Land registry fees are also regulated (similar magnitude). Your lawyer typically pays these on your behalf and provides a breakdown.
  
  

Make sure to complete these steps within the deadlines. Transfer taxes are usually due within 30 days of the sale date (for ITP/AJD). Delays can incur penalties.

10. Post-Purchase Considerations

With the property under your ownership, attend to these final items:

• Utilities and services: Change utility accounts (water, electricity, gas, internet) into your name. Often the seller or agent will assist with providing latest bills. You can set up direct debits from your Spanish bank for ongoing payments.
  
  

• Community of owners: If the property is part of a community (condominium or urbanization), notify the community administrator of the change of ownership. Ensure you get a copy of community rules and begin paying the quarterly community fees.
  
  

• Insurance: It’s wise to arrange home insurance starting immediately after purchase to protect your new asset.
  
  

• Annual taxes: As a property owner in Spain, be aware of your annual obligations. There is a local council tax called IBI which you must pay each year to the town hall. Additionally, if you’re not a Spanish tax resident and do not rent out the property, you’ll owe a small annual income tax on the deemed rental value of the property (even if unused) – we discuss this in a later section. Plan to file those taxes (Modelo 210) every year.
  
  

Finally, consider making a Spanish will for your property in Spain. While not mandatory, a local will can simplify inheritance for your heirs under Spanish law.

Buying property in Spain involves many steps, but with proper guidance it can be a rewarding process. Always do thorough due diligence and enlist professional help. With this step-by-step roadmap, you can proceed confidently, knowing you’ve covered the crucial bases. If you need personal assistance or legal advice at any stage of your property purchase, book an appointment with our real estate and tax advisors in Spain for expert guidance tailored to your situation: Book an appointment.