Buying property in Spain as a foreigner

Spain is an extremely popular destination for expats looking for a pleasant climate, high standard of living and of course, delicious food. Whether you’re thinking of working in one of Spain’s major cities such as Madrid, Barcelona or Valencia, or retiring to the Spanish coast, you’ll need to find somewhere to live.

While renting in Spain is definitely an option, many foreigners choose to buy property if they’re going to stay in the long term. Over 75% of people own their homes in Spain¹, and the large expat communities scattered throughout the country means that a high proportion of real estate is already foreign owned.

Traditionally, Brits have been the largest single group of expats investing in Spanish property, and this has continued even in the wake of Brexit-related changes. In fact, around 13% of foreign-owned homes in Spain were in British hands in 2020².

If you’re thinking of joining the many British expats enjoying life in Spain, read on. We’ve put together an essential guide on buying property in Spain for foreigners, including all the important info you need to know. So let’s get started.

What’s the property market like in Spain?³

The Spanish property market was hit hard by the global economic crisis of 2007-2009, and the recent coronavirus pandemic has also had an impact. But despite these setbacks, the housing market in Spain has become more stable. Figures suggest that it is already recovering from the global health crisis, as average sale prices increased by 2.1% in the second part of 2020.

Some property experts predict that house price values in Spain could fall by 5-10% as the full impact of Covid-19 on the economy is revealed. This could mean it’s a good time to find a cheaper home to buy, but any economic instability also means a degree of risk for foreign investors.

How easy is buying property in Spain for foreigners?³

There are no special requirements or paperwork for foreigners wishing to buy property in Spain, so you shouldn’t have any issues. In fact, foreign investment in Spanish property was traditionally encouraged by the government.

All you need is a financial number (NIE), which you can get by popping into a Spanish police station and presenting your passport. However, for non-EU citizens like buyers from the UK, it can take a few weeks to get this number.

There’s even a special Golden Visa scheme for foreigners. Through this program, you can get a residency visa if you buy a Spanish property worth more than £500,000.

Buying property in Spain after Brexit

The good news is that even now the UK has officially left the EU, British expats still have the right to buy property in Spain.⁴

The costs and the process should be broadly the same as before, and UK citizens may also want to take advantage of Spain’s Golden Visa program.

How much does it cost to buy property in Spain?

If you’re thinking of buying a property in Spain, the price you pay will be influenced significantly by where you want to live.

Some of the most expensive properties in the country can be found in Barcelona, with Madrid city centre prices falling a shade below this. However, if you want to live in the capital on a budget, you can decrease your housing costs considerably by looking to the suburbs instead of the city centre.

In other areas of the country, such as the coastal regions, the wide variety of different housing on offer means you can find something to fit pretty much any budget.

Let’s take a look at roughly how much buying property in Spain costs per square metre, in different parts of the country:⁵

Location	Property price per sq.m
Malaga	€2091
Santa Cruz de Tenerife	€1527
Santander	€1868
Bilbao	€3073
Barcelona	€4009
Madrid	€3682
Valencia	€1824
Palma de Mallorca	€2897
Murcia	€1069
Toledo	€1355
Badajoz	€1221

Best places to buy a property in Spain

Nearly ready to start your property search? Here’s some destination inspiration, based on the most popular places to buy property in Spain among UK expats:

• Alicante. Both the region and city of Alicante are hugely popular with UK and international expats, thanks to sandy beaches, palm-tree lined boulevards, traditional Spanish influences and lovely warm climate.

• Costa del Sol. It’s easy to see why so many Brits flock to the Costa del Sol, both for holidays and to relocate. The Southern coast gets far more sunshine hours than the UK, along with beautiful beaches, sparkling waters and stunning Andalusian landscapes.

• Valencia. The Valencia region is an attractive spot for UK expats, and the city itself is also a great place for Brits to buy property. In the cooler north of Spain, you’ll find modern architecture, a rich cultural scene and some of the best paella in the country.

• Benidorm. This party city has been popular with British holidaymakers and retirees for decades, thanks to its sandy beaches, great transport connections and wide range of shops, bars and restaurants. There are peaceful spots in Benidorm too, if you know where to look.

• Murcia. Often overlooked in favour of more touristy Spanish hotspots, Murcia offers good value for money when it comes to property prices. It’s inland and wonderfully rural, and is known for its excellent tapas.

• Torrevieja. This former fishing village in the Costa Blanca is becoming increasingly popular with British expats, but it’s a real melting pot of nationalities. Close to major airports and with a stunning coastline, Torrevieja could be well worth investigating as a place to buy property.

• Madrid. Buy a home in the cosmopolitan Spanish capital and you can expect a vibrant, busy atmosphere, along with elegant architecture, fabulous food, a great public transport system and an international expat community. However, Madrid can be a pricey place to buy property.

• Barcelona. This uber-trendy city in Catalonia is bursting with culture, food and nightlife, but living in the heart of the action comes with a price - as it’s one of the most expensive places in Spain to buy property.

How can I find a property in Spain?

Property agencies and agents

There are several avenues you can take to find a property in Spain:

• Through an estate agent (inmobiliaria)
• An online portal which puts owners directly in touch with prospective buyers
• Word of mouth, or via adverts in the neighbourhood you’re interested in.

An estate agent, if used, generally works on behalf of the seller. The estate agent fees are likely to be around 3% of the price of the property³, and are usually paid by the seller.

If it’s the first time you’ve bought a property in Spain, then a specialist buying agent or broker might offer helpful advice and insight into the local market. However, there will usually be a fee to pay for this service, and you should make sure you’re clear on what you’ll get for your money, as both the packages and prices can vary considerably.

Property websites in Spain

The best way to get a head start on finding a place to buy in Spain is to look online. Great websites to find a house or apartment to buy include:

• Idealista has ads in English, French, German and several other major languages, as well as a handy search function which allows you to select the property features that are most important to you.
• Fotocasa.es is one of the most-visited websites for property searches in Spain, and has listings in multiple languages.
• Servihabitat has an English language website, with a map function allowing you to easily choose where you want to look for your new home.

Pitfalls of buying property in Spain

One of the main things to watch out for when buying property in Spain, or in any foreign country, are scams.

To avoid scams and other pitfalls, make sure to get local advice and recommendations for a broker. You should also check for membership of a professional body when working with any property experts, brokers or agents.

The API (Agente de la Propiedad Inmobiliaria) is an association of Spanish realtors, which works in regional chapters based across Spain. Choosing an agent in your local area who holds this membership should make sure you don’t fall foul of any scammers.

Other important things to remember include:

• Be cautious and do your homework (including meeting or speaking to the seller) before sending money or a deposit.
• Ensure that the seller has the legal right to sell the property.
• Get an inspection/survey carried out if you have any concerns about the property.

How do I choose the right property?

Property types

Spain has a well developed real estate sector. This means you'll have a wide choice of apartments, houses or even land if you want to build your dream home yourself.

Naturally, you'll find more flats available in built up areas and cities, with houses and villas more readily available in newer developments in the suburbs, and in towns and villages.

You'll find a good mix of older properties and new build condos in the cities, while the coastal towns - popular with those looking to retire in Spain in particular - also have a good mix of new apartment complexes and villas, and more traditional style homes once you move slightly away from the seafront.

Condition of the property

It’s a smart idea, though not required by law, to get a survey done on any property you choose before you commit to buying it. This isn’t actually the norm in Spain but some houses, in particular those over about 15 years old, can have hidden problems which are costly to fix.

Construction standards in Spain have improved greatly over recent years, and new builds are erected to the same standard as anywhere else in Europe or North America. Older homes, however, may not have been built to quite the same meticulous standard. To double check this you can find a surveyor online, or ask for recommendations from local connections.

How to buy property in Spain - a step-by-step guide³

1. Choose where to buy. You can do some research online, but it usually helps to take a trip to Spain to get a feel for the area and view properties in person. When traveling to inspect the property in person, you could save on your local travel spending using the Wise travel money card.

2. Find an estate agent, if you’re planning to use one.

3. Get your finances in order. It can be a good idea to get an offer in principle from a mortgage provider before starting your property search.

4. Carry out viewings and choose your dream property.

5. Make an offer through the seller’s estate agent. You can negotiate, just like in other countries. Once an agreement is reached, a notary can summarise the offer in writing.

6. Consider arranging a survey. It isn’t mandatory, but a house survey could help to flag up any serious issues.

7. Once the offer is accepted, you and the seller will sign a preliminary contract (contrato privado de compravento) and you’ll pay a deposit - usually 10% of the purchase price.

8. Find a property lawyer. It’s important to have all documents checked over by a registered legal professional, who will also register the property and carry out due diligence on the transaction.

9. Finalise your mortgage.

10. Sign the contract of sale (escritura de compravento).

What are the legal requirements to buying a property in Spain?

The notary has an extremely important role in house sales in Spain. They will prepare the contracts and make sure that they comply with local laws.

However, you’ll also need your own property lawyer to help with other aspects of the sale, such as ensuring the person proposing the sale is actually the legal owner of the property, and that there are no existing debts listed against the property.

This is especially important in Spain, as debts are attached to the property and transferred with the ownership³. If there’s an outstanding mortgage on the place in the previous owner’s name, you could find yourself liable for it if you don’t check this properly.

When choosing a lawyer, make sure they are registered with the local bar association (Colegio de Abogados).

How do I get a bank loan/mortgage?

Unless you have the cash upfront, you’re likely to need a mortgage to finance your Spanish property purchase.

You can buy a property in Spain with a mortgage from a Spanish bank, but you’re likely to get a lower loan-to-value (LTV) rate than local residents³. This means you’ll need a larger deposit.

It’s a good idea to start shopping around for mortgages before starting your property search in earnest. You might want to use a broker, who can help you find the right mortgage for you. Simply having someone on your side who speaks Spanish and really understands the system can pay dividends.

Buying property in Spain - deposits and down payments

It’s normal to pay a deposit of 10% on your property⁶. It’s important to ensure that the initial contract you sign (Contrato privado de compraventa)arres agreement⁶. This means that if the seller subsequently withdraws the agreement you’re entitled to double your deposit money back.

What kind of taxes and fees will I need to pay?

All property purchases come with extra costs attached, so it’s important to factor these fees and taxes into your overall budget:³

• Property transfer tax: 6-10% of the purchase price
• Notary fees, land registration fee and title deed tax: 1-2.5%
• Legal fees: 1-2%
• Estate agents fees: Usually paid by the seller, and typically around 3% of the price.

Paying for your Spanish property from abroad? Save money with secure transfers with Wise

If you’re not yet in Spain, you might have to pay your deposit from abroad. This might mean making an international money transfer to cover the deposit amount.

If you’re sending a large amount of money overseas, do it securely and for tiny fees⁷ using the Wise multi-currency account.

Wise is FCA regulated, uses sophisticated security and anti-fraud measures and could work out to be a cheaper solution than your bank. What’s more, you’ll always get the mid-market exchange rate - so you’ll save money on your property purchase overall.

Join Wise today

---

Buying a property is a big and exciting step, but navigating the system in a new country can be a challenge. Luckily, buying your dream home in Spain should be fairly straightforward if you follow the advice and steps in this guide, and source the right local help if you need it.

Good luck with finding, buying and settling into your new home in Spain!

---

Sources used for this article:

1. Statista - home ownership rate in Spain
2. Statista - percentage distribution of the acquisition of homes by foreigners in Spain 2020
3. Expatica - buying property in Spain
4. Solicitors in Spain - buying property in Spain after Brexit
5. Virto Property - Spanish property market forecast
6. Global Property Guide - buying property in Spain guide
7. Please see Terms of Use for your region or visit Wise Fees & Pricing: Only Pay for What You Use for the most up-to-date pricing and fee information.

Sources checked on 14-July-2021.