How To Buy A Property In Spain – 2023 Guide

We know how to buy a property in Spain – from personal experience. Many foreigners dream of a Spanish home, especially owning their own place in this beautiful sunny country. Whether it is a permanent home, a holiday home, or an investment, it is an exciting proposition. We will examine the pros and cons of owning in Spain and the pitfalls you must avoid. Let us guide you from starting your property search to completing the purchase. Read on for our guide to buying Spanish property.

Finding The Perfect Property

Let’s start with the property search. I start with one of the large online platforms that show properties from most estate agents in any area in Spain. Expats and locals alike favor two websites.

• Idealista.com
• Habitaclia.com

With both, you can select the filters that suit your search: price, size, number of bedrooms, location, etc. Then Sort the properties in Price order. This step is helpful because many properties are listed a lot of times by different agents. So it will save you a lot of time repeatedly looking at the same properties as they are duplicate listings. Then, book appointments to view the properties with the estate agents you want to work with.

Tip: Meet with several real estate agents in the area and let them know you are not a “captive client.” A little competition for your attention and business is a good thing.

It is also worth building relationships with these local real estate agents by calling or visiting their offices. This way, they may tell you when something is about to come onto the market or is off-book. These on-to-one relationships with a

Buying A Property In Spain As A Foreigner

Buying real estate in Spain as a foreigner is a relatively straightforward process. However, here are the steps you need to take to complete the process.

NIE

First, apply for your Spanish tax identification number (NIE). You cannot purchase real estate in Spain without a NIE. An immigration lawyer can assist, as this process can be painful – check out our guide for more information.

Research

Secondly, if you have found the area where you wish to buy, thoroughly research the property market in the area. Once you have found a property you want, you should research it thoroughly. This research includes checking its legal status, ownership, and potential debts or liens. Speak to residents in the area or use forums like Facebook to check for insider information.

Offer

When you are satisfied with the property, you can make an offer to the seller through the estate agent. Once an agreement is reached, you must sign a preliminary contract and pay a deposit.

Tip: If you want to try your luck, there is no harm in making an offer below market value. The estate agent is bound to at least deliver your offer (even if they advise rejection.) But this can impact future negotiations, so take care if this is your dream house in Spain!

Lawyer

At this stage, it is advisable to hire a lawyer who is familiar with Spanish property law. They can guide you through the process and ensure you meet all legal requirements.

Tip: If your Spanish is not adequate, find a lawyer who speaks English. The process is too complex to rely on Google Translate. Finer details of contracts can easily get lost in translation.

Purchase

The final step is to complete the purchase by signing the deed of sale. At this point, you’ll pay the remaining balance and any associated taxes and fees. And that is how to buy a property in Spain!

Do you need a mortgage? Please read our guide to obtaining a mortgage in Spain.

How To Buy A Holiday Home In Spain

Buying a holiday home in Spain is similar to buying any other type of property there. However, it would be best to consider a few additional factors before purchasing.

If you plan to let your holiday home when you are not using it, check if you need a license. Some areas have closed their books on new permits, so you may never get one. The fines for renting out unlicensed premises can be horrendous. In Barcelona, for example, you could be fined tens of thousands for renting out an unlicensed flat for short-term lets.

Warning: Some unscrupulous vendors may suggest they have a tourist license when they do not. Make sure your lawyer verifies the documentation before you even pay a deposit.

Consider hiring a property management company to handle your rental process and maintenance. If you proceed, it is worth researching local companies, their service levels, and fees.

It is essential to consider if the property will make a good “lock up and leave” option. You need to be aware of the laws around squatting in Spain. Evicting squatters (illegal tenants) can be challenging once they have taken residence. So your empty property must be protected when you are away for long periods.

Pros & Cons of Buying A House In Spain vs. An Apartment In Spain

Pros Of Buying A House In Spain:

Houses in Spain typically offer more space than apartments, with more rooms, outdoor areas, and gardens. They may provide more privacy as they are often located in more secluded areas and suburbs. And they do not share walls or common areas with other residents.

Houses offer more flexibility when customizing the space to your liking, such as adding a pool or extending the property. In general, you will own the freehold and will not have to pay any service charges or for communal repairs.

Cons Of Buying A House In Spain:

However, houses are usually more expensive to purchase and maintain. And they may be more difficult to secure if you leave the property empty for long periods. You’ll also have to pay for the maintenance and upkeep rather than share them.

Pros Of Buying An Apartment In Spain:

Apartments in Spain are generally more affordable than houses. They often have shared amenities like pools, gyms, or common areas. Shared facilities can be convenient and cost-effective. Apartments are frequently located in central areas, with easy access to shops, restaurants, and public transportation.

Cons Of Buying An Apartment In Spain:

Apartments share walls and common areas with other residents, which can lead to less privacy and more noise. They often have restrictions on customization, such as limits on painting or renovations.

Warning: Some apartment and townhouse builders cut corners on insulation and soundproofing. Try to inspect the place when you can verify how peaceful your new home will be. We speak from first-hand experience – our dream beach-view home turned into a nightmare when we could literally hear the neighbors talking through the walls!

What Is “Rent-to-Own” In Spain

Rent-to-own, or rent-to-buy, is an agreement where a tenant rents a property with an option to purchase in the future. In Spain, this type of arrangement is known as “alquiler con opción a compra.”

Under a rent-to-own agreement in Spain, the tenant pays a monthly rent to the landlord. This amount may include an additional fee that goes towards the eventual purchase price of the property. The tenant also has the option to purchase the property at a predetermined price within a specified time frame. In Spain, this timeframe is typically from one to five years.

Rent-to-own agreements in Spain can benefit both the tenant and the landlord. For the landlord, it offers a steady income stream from the rent and the potential for a subsequent sale. For the tenant, it provides the opportunity to try out a property before committing to a purchase. It also allows time to accumulate savings towards the down payment.

However, rent-to-own agreements in Spain can also have drawbacks. The tenant may pay more for the property than its market value. They may lose the option to purchase if they cannot secure financing or meet the other terms of the agreement. The landlord may also face the risk of default or other complications if the tenant cannot complete the purchase.

They were prevalent after the 2008 credit crisis but are not so common now the property market has recovered.

It is essential for both parties to carefully review the terms of the rent-to-own agreement, as they can be complex. We advise seeking professional advice before entering into this type of arrangement.

Buying A House In Spain After BREXIT

Following the UK’s withdrawal from the EU, British citizens are now subject to new regulations regarding buying real estate in Spain. Here are some key points to keep in mind.

British citizens staying in Spain for over 90 days in any 180-day period must apply for a visa or residency permit. The type of permit required will depend on the individual’s circumstances, such as whether they plan to work or retire in Spain.

So, you can still buy a property without any restrictions. However, you may be limited in how much time you can spend in your house. Please see our Spain visa section to learn more about immigration options for UK Citizens After BREXIT.

To learn more about buying real estate after BREXIT, seek professional advice to ensure a smooth and successful purchase process.

Note; EU and EEA citizens can live in Spain as long as they register, regardless of owning property.

Best Places To Buy A House In Spain

Spain offers many great options for those looking to buy a house, with diverse regions and cities that offer different landscapes, lifestyles, and amenities. Let’s take a look at some of the best places to buy a house in Spain.

Check out our Spain Destination Guides for more resources to help you choose.

Costa del Sol

Located on the southern coast of Spain, the Costa del Sol is a popular destination for those looking for a sunny beachfront lifestyle. It is known for its lively atmosphere, golf courses, and cultural attractions. The area offers a wide range of properties, from modern apartments to luxury villas. You will find plenty of English-speaking Expats and tourists. Great for making friends and making yourself understood.

Barcelona

Barcelona is one of Spain’s most vibrant and cosmopolitan cities, with a rich history, architecture, and culture. The city offers a mix of old-world charm and modern amenities and is known for its art scene, gastronomy, and nightlife. Properties in Barcelona can be expensive, but many options are available, from apartments in the Gothic Quarter to villas in the surrounding hills.

Madrid

As the capital of Spain, Madrid is a bustling city. It offers a mix of historical and modern architecture, world-class museums, and vibrant nightlife. Comparable properties in Madrid are more affordable than in Barcelona. There is a wide selection, with options ranging from apartments in the city center to houses in the suburbs.

Valencia

Valencia is a vibrant city with a rich history and culture located on the eastern coast of Spain. The city is known for its stunning architecture, beaches, and lively atmosphere, as well as its food and wine. Properties in Valencia are relatively affordable, with options ranging from apartments in the city center to villas in the surrounding countryside.

The Balearic Islands

Mallorca, Menorca, Ibiza, and tiny Formentera are popular destinations for those looking for a sunny, Mediterranean lifestyle. The islands offer stunning beaches, crystal-clear waters, a relaxed atmosphere, and a variety of properties, from traditional houses to modern villas. Prices are high, particularly in the very chi-chi parts of these gorgeous islands.

Where Are The Cheapest Property Prices In Spain

The cost of buying a property in Spain can vary greatly depending on the location, type of property, and local market conditions. However, there are some regions in Spain where property prices are generally lower than in other areas. Here are some of the cheapest regions in Spain to buy a property:

Murcia

Located in southeastern Spain, Murcia is known for its sunny climate, beaches, and historic towns. Property prices in Murcia are generally lower than in other popular coastal areas. In Murcia, average prices for apartments and houses range from around €60,000 to €150,000.

Castilla-La Mancha

Castilla-La Mancha is a rural central Spain region with charming villages, historic towns, and beautiful landscapes. Property prices in the area are relatively low, with average prices for apartments and houses ranging from around €60,000 to €120,000.

Extremadura

Another rural region, this time in western Spain, with beautiful natural scenery, historic towns, and affordable property prices. Average prices for apartments and houses in Extremadura range from around €50,000 to €120,000.

Andalusia

While Andalusia is a popular tourist destination with many high-end properties, there are also some more affordable areas within the region. Average prices for apartments from around €60,000 to €150,000. Inland areas and smaller towns and villages can offer cheaper options than an equivalent at the coast.

Pitfalls To Avoid When Buying Property In Spain

While buying Spanish real estate can be an exciting and rewarding experience, there are some potential pitfalls to be aware of. Here are some of the most common pitfalls.

The Spanish market can lack transparency. Information about the property’s condition, history, and legal status may need to be clarified.

Various legal issues, such as incomplete or incorrect paperwork, can arise. And there can be zoning and planning issues and disputes over ownership or boundaries.

It’s essential to do thorough due diligence and work with reputable professionals, such as lawyers and real estate agents.

In addition to the purchase price, various other costs arise. These costs include taxes, legal, notary, and property transfer fees. These costs can add up quickly and significantly increase the overall cost of the purchase, so it’s essential to budget for them in advance.

You must also understand your Spanish Tax liabilities.

Currency fluctuations can dramatically impact the purchase cost if you buy property in Spain from abroad.

Unfortunately, property scams are common in Spain, many targeting foreign buyers. Scammers may offer properties that do not exist, misrepresent the condition or legal status of a property, or offer properties at unrealistically low prices.

Overall, buying property in Spain can be a complex process. However, you can easily avoid all these pitfalls with the proper precautions and professional guidance.

Is It A Good Idea To Invest In Property In Spain?

Investing in property in Spain can be a good idea for many reasons. It will depend on various factors, such as your investment goals and the current state of the Spanish property market.

Spain is a popular tourist destination, which means there is a strong demand for rental properties, particularly in coastal areas and major cities. This demand ensures a potential source of rental income for investors.

The Spanish real estate market has experienced periods of solid capital growth. While there have been some fluctuations in recent years, there is still potential for long-term capital growth.

However, there are also potential downsides and risks to consider. These risks include the potential for currency fluctuations, hidden costs, legal issues, and changes to laws and regulations.

Owning A Rental Property In Spain

Renting out a property in Spain can be a lucrative investment. But it is vital to consider some disadvantages of being a landlord in Spain. Tenant protection laws are relatively strong, and evicting tenants can be more difficult compared to the USA and UK. Here are some of the critical differences in tenant rights and eviction procedures between Spain, the USA, and the UK:

Notice Periods

In Spain, landlords must provide a minimum of six months’ notice to tenants before terminating a lease. In the USA and UK, notice periods are generally shorter. However, the eviction process can be expedited in some cases, such as non-payment of rent or breach of lease terms.

Eviction Procedures

In Spain, landlords must follow a strict legal process to evict tenants, which can be lengthy and costly. Tenants have the right to contest the eviction in court. Landlords must provide a valid reason for removal, such as non-payment of rent or breach of lease terms. Eviction procedures are generally faster and less complicated in the USA and the UK.

Tenant Rights

In Spain, tenants have strong legal protections, including the right to renew leases and limit rent increases. Tenants also have the right to contest the eviction in court and can request a payment plan for rent arrears. In the USA and UK, tenant rights are generally less extensive.

We have more information in our Renting a Property in Spain guide.

What Are The Buying Costs When Buying Property In Spain?

When buying property in Spain, there are several costs and fees that buyers should be aware of. Many of the fees and taxes will vary depending on the region. As a general rule of thumb, expect the buying costs to be between 13% and 15% of the property price.

Property Transfer Tax (ITP)T

This tax applies to the purchase of a resale property and varies depending on the region. The ITP ranges from 6% to 10% of the purchase price in most areas.

Value Added Tax (VAT)

VAT applies to purchasing a new build property and is 10% of the purchase price of the property.

Capital Gains Tax

If you are selling a house in Spain for a profit, you may be liable for capital gains tax from the selling price. You may have to pay this amount in Spain or your home country, depending on your tax status. Check out our guide to tax in Spain for more information.

Notary Fees

Notary fees for the legal transfer of ownership can range from 0.1% to 1% of the purchase price when buying a property.

Registry Fees

These are charged for registering the property in the Land Registry. These can range from 0.1% to 1% of the purchase price.

Legal Fees

Legal fees for a property purchase can range from 1% to 2% of the property purchase price. This includes the cost of hiring a lawyer to review the sales contract and handle the legal process.

Mortgage Costs

If you require a mortgage to purchase the property, there will be additional costs such as appraisal fees, mortgage setup fees, and bank charges.

Find out how to get a Mortgage in Spain or how to open a Spanish bank account.

Building Insurance Policy

When you purchase a property, you should take out at least a building insurance policy to cover damage, including fire. Depending on your mortgage type, many Spanish banks insist on a specific insured amount and policy type. Many homeowners in Spain also choose contents insurance to cover their possessions. See our Spain insurance guide here for more information.

How Long Is The Process Of Buying A House In Spain?

The process of buying a house in Spain can take several months. It will depend on various factors, which can include:

• The location of the property.
• The complexity of the purchase.
• The efficiency of the parties involved.

If the vendor, either lawyer, the bank, or the purchaser fails to follow due process, then buying the property can take much longer. Follow all the steps we have suggested in this guide on how to buy a property in Spain, and it should be straightforward.

Buying Off-Plan Property In Spain

Buying off-plan in Spain refers to purchasing a property before completion, typically during construction. This option can be attractive for buyers who want to secure a property at a lower price. A bonus is that you have more control over the final design and finishes.

However, there are some risks involved with buying off-plan. It is vital to thoroughly research the developer, their track record, location, and local market conditions. Buyers should also carefully review the contract and understand their rights and obligations. You should look closely at payment schedules and any penalties for delays or changes to the property.

Work with a reputable real estate agent to protect your investment, and hire an independent lawyer to review the contract and advise you. Additionally, it is crucial to ensure that the developer has adequate insurance and guarantees in place. These should cover any potential issues that may arise during the construction process.

How to Buy A Property In Spain

We know many Expats who love owning their dream Spanish home. With the right advice and research, you can too. Our guide on how to buy a property in Spain will give you the confidence to start your search.

FAQ – How to Buy A Property In Spain