Buying in Spain
Your Questions Answered
Everything you need to know about purchasing property on the Costa del Sol, from taxes and legal requirements to mortgages and residency.
Purchasing Process
Can foreigners buy property in Spain?
Yes, absolutely. Spain places no restrictions on foreign nationals purchasing property. Buyers from any country, whether EU citizens or non-EU residents, can buy residential or commercial real estate. The only prerequisite is obtaining a NIE (Número de Identificación de Extranjero), which is a tax identification number for foreigners. Thousands of British, Scandinavian, German, and international buyers purchase property on the Costa del Sol every year.
What is a NIE number and how do I get one?
A NIE (Número de Identificación de Extranjero) is a unique identification number assigned to foreigners for any financial or legal transaction in Spain, including buying property, opening a bank account, or setting up utilities. You can apply at a Spanish consulate in your home country or at a local police station (Comisaría de Policía) in Spain. The process typically takes 1–3 weeks. You'll need your passport, a completed EX-15 form, and proof of why you need the NIE (e.g. a property reservation document). Many lawyers can handle this on your behalf with a power of attorney.
What are the total purchase costs when buying property in Spain?
As a rule of thumb, budget approximately 10–13% on top of the purchase price for total acquisition costs. This covers taxes (ITP or IVA + Stamp Duty), notary fees (€600–€1,200), land registry fees (€400–€700), and legal fees (typically 1–1.5% of the purchase price plus VAT). If you're taking out a mortgage, add valuation and arrangement fees. For a €500,000 property, expect total costs of around €50,000–€65,000 on top of the agreed price.
What taxes do I pay when buying a resale property?
For resale (second-hand) properties, the main tax is ITP (Impuesto de Transmisiones Patrimoniales), the Transfer Tax. In Andalucía, where the Costa del Sol is located, the rate is 7% of the declared purchase price. For example, on a €1,000,000 property you'd pay €70,000 in transfer tax. This is significantly lower than the previous rates which were up to 10% on higher-value properties, the Andalucían government reduced the flat rate to 7% in 2021.
What taxes apply to buying a new-build property?
New-build properties (bought directly from a developer for the first time) are subject to IVA (VAT) at 10% of the purchase price, plus AJD (Actos Jurídicos Documentados / Stamp Duty) at 1.2% in Andalucía. So a €800,000 new-build apartment would incur €80,000 in VAT plus €9,600 in Stamp Duty, totalling €89,600 in taxes. There's no Transfer Tax on new-builds; IVA replaces it.
Do I need a lawyer to buy property in Spain?
While not legally mandatory, it is strongly recommended, and considered essential, to appoint an independent lawyer (abogado) who specialises in Spanish property conveyancing. Your lawyer will conduct due diligence on the property (checking the title deed, outstanding debts, planning permissions, community obligations), review and negotiate the purchase contract, and represent you at the notary signing. Legal fees are typically 1–1.5% of the purchase price plus 21% VAT. Never use a lawyer recommended solely by the seller or the estate agent, choose one who acts exclusively in your interest.
Can I get a mortgage as a non-resident in Spain?
Yes. Spanish banks routinely offer mortgages to non-residents, typically lending up to 60–70% of the property's valuation (compared to 80% for residents). Interest rates in Spain are competitive, with variable rates tied to the Euribor plus a margin (typically Euribor + 1.5–2.5%) and fixed rates available from around 2.5–3.5%. You'll need to provide proof of income, bank statements, tax returns from your home country, and a credit report. The bank will commission its own property valuation. Mortgage terms of up to 20–25 years are common for non-residents.
How long does the buying process take from offer to completion?
A typical resale purchase takes 6–12 weeks from accepted offer to completion at the notary. The process follows these steps: offer accepted → reservation deposit paid (usually €6,000–€10,000) → private purchase contract signed within 2–4 weeks (with 10% deposit) → completion at the notary 4–8 weeks later. New-build purchases can take longer if the property is still under construction, in that case, you'll sign a reservation and pay stage payments linked to construction milestones, with final completion upon handover. Your lawyer will manage the timeline and ensure all due diligence is completed before you commit.
What is a Nota Simple and why is it important?
A Nota Simple is an extract from the Spanish Land Registry (Registro de la Propiedad) that provides critical information about a property. It confirms the legal owner, the property's exact description and boundaries, any mortgages or charges registered against it, any legal encumbrances (such as rights of way), and whether there are any embargoes or liens. Your lawyer should always obtain an up-to-date Nota Simple before you sign any contract. It costs around €10–€15 and can be requested online or in person at the local Land Registry.
Property Taxes & Costs
What are community fees and what do they cover?
If you buy an apartment, townhouse, or a property within a gated community or urbanisation, you'll pay monthly or quarterly community fees (gastos de comunidad). These cover shared expenses including maintenance of communal areas, swimming pools, gardens, lifts, security, building insurance, and a reserve fund for major repairs. Fees vary enormously depending on the size and quality of the development, from €50/month for a basic apartment block to €500+/month for a luxury gated community with 24-hour security, concierge, and spa facilities. Always check the community's financial health and whether there are any outstanding special levies (derramas) planned.
What is IBI (property tax) and how much is it?
IBI (Impuesto sobre Bienes Inmuebles) is the annual local property tax, equivalent to council tax or rates. It's based on the catastral value (valor catastral) of the property, which is usually significantly lower than the market value. The rate varies by municipality but typically ranges from 0.4% to 1.1% of the catastral value. For a luxury villa in Marbella with a market value of €2,000,000, the catastral value might be €400,000–€600,000, resulting in annual IBI of approximately €1,600–€4,000. IBI is paid annually, usually in the autumn, and can be set up as a direct debit from your Spanish bank account.
Can I rent out my property in Spain? What are the rules?
Yes, but holiday/short-term letting is regulated. In Andalucía, any property let for tourist purposes (stays under 2 months) must be registered with the Junta de Andalucía's Tourism Register and obtain a VFT (Vivienda con Fines Turísticos) licence number. Requirements include a minimum standard of furnishing, air conditioning, first-aid kit, tourist information, and complaint forms. The licence number must be displayed on all advertising. Long-term rentals (over 2 months) are governed by Spain's Urban Lease Act (LAU) and don't require a tourist licence. Many communities in Marbella now restrict or regulate short-term lets, so always check the community statutes before purchasing with rental income in mind.
What is the Golden Visa programme and is it still available?
Spain's Golden Visa programme offered residency permits to non-EU nationals who invested €500,000 or more in Spanish real estate. However, the Spanish government announced the termination of the programme, and as of April 2025, new applications for property-based Golden Visas are no longer accepted. Existing Golden Visa holders can still renew their permits. Alternative residency routes remain available, including the non-lucrative visa (for those with sufficient passive income), the digital nomad visa, and the entrepreneur visa. Consult an immigration lawyer for the most current options.
What ongoing annual taxes do property owners pay in Spain?
Property owners in Spain face several annual obligations: IBI (local property tax, €1,000–€5,000 for typical Costa del Sol properties), basura (rubbish collection tax, €100–€300/year), and income tax. Non-residents who don't rent out their property must still file an annual imputed income tax return (Modelo 210) based on 1.1–2% of the catastral value, taxed at 19% for EU residents or 24% for non-EU. If you do rent out the property, rental income is taxed at 19% (EU) or 24% (non-EU), though EU residents can deduct allowable expenses. Spanish tax residents declare worldwide income including property. Wealth tax (Impuesto sobre el Patrimonio) may also apply on net assets exceeding €700,000 per person in Andalucía.
Do I need a Spanish bank account to buy property?
While not strictly legally required, a Spanish bank account is practically essential. You'll need it to pay community fees, IBI, utility bills, and any mortgage repayments by direct debit. The notary will typically also require completion funds to be transferred from a Spanish account. Opening an account is straightforward, you'll need your passport, NIE, and proof of address. Major banks on the Costa del Sol (such as CaixaBank, Santander, BBVA, and Unicaja) have dedicated international departments and English-speaking staff.
What is the role of the notary in a Spanish property purchase?
The notary (notario) is a public official who oversees the formal completion of the property sale. Their role is to verify the identities of buyer and seller, ensure all required documents are in order, read and explain the deed of sale (escritura pública), witness signatures, and submit the deed for registration at the Land Registry. The notary is impartial, they don't act for either party. Importantly, the notary does NOT conduct due diligence on the property's legal status; that's your lawyer's job. Notary fees are regulated by law and typically range from €600 to €1,200 depending on the purchase price.
What due diligence checks should I do before buying?
Your lawyer should conduct thorough checks including: obtaining a current Nota Simple from the Land Registry to verify ownership and any charges; confirming the property matches its catastral and registry descriptions; checking for outstanding debts (mortgages, community fees, IBI, utility bills); verifying the property has a valid Licencia de Primera Ocupación (first occupation licence) or Certificado de Antigüedad; reviewing planning regulations to confirm the property is legally built and there are no pending enforcement actions; obtaining an Energy Performance Certificate (EPC); and checking the community's statutes and financial accounts. For rural or older properties, additional checks on water rights, access roads, and land classification are essential.
What are the capital gains tax implications if I sell?
When you sell a property in Spain, you'll pay capital gains tax on the profit (sale price minus purchase price, including documented improvement costs and acquisition expenses). For non-residents, the rate is a flat 19% on the gain. Additionally, the buyer is legally required to retain 3% of the sale price and pay it directly to the Spanish tax authority as a withholding against your CGT liability, if your actual tax is less than 3%, you can claim a refund. For Spanish tax residents, gains are taxed on a sliding scale: 19% on the first €6,000, 21% on €6,001–€50,000, 23% on €50,001–€200,000, 27% on €200,001–€300,000, and 28% above €300,000. Residents over 65 selling their primary home are exempt from CGT.
Can I buy property through a company (SL) in Spain?
Yes, you can purchase property through a Spanish limited company (Sociedad Limitada / SL). This can offer advantages in certain situations, such as when multiple investors are involved, for commercial properties, or for inheritance planning. However, for most individual residential purchases, buying in personal names is simpler and more tax-efficient. Companies face corporate tax (25%), and the Spanish tax authority scrutinises company-owned residential property closely, imputing benefit-in-kind if directors or shareholders use the property. There are also additional reporting obligations and accounting costs. Take specialist tax advice before choosing a corporate structure, it's beneficial in some scenarios but costly and complicated in others.
What should I know about buying off-plan or new developments?
Buying off-plan (sobre plano) means purchasing a property before or during construction. Key protections to be aware of: Spanish law requires developers to provide a bank guarantee (aval bancario) or insurance policy covering all stage payments you make, meaning your money is protected if the developer fails to complete. Always verify this guarantee exists before paying anything beyond the initial reservation. Payment schedules typically involve 20–30% during construction and the balance on completion. Your lawyer should check that the developer has all necessary building licences, that the land is correctly classified, and that the development has planning approval. You should also review the building specifications (memoria de calidades) carefully. Completion dates in Spain are often delayed, build in a buffer and ensure your contract includes penalty clauses for significant delays.
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