What is the process of buying real estate in Spain as a foreigner?

Updated 24 September 2025

Spain continues to attract international property buyers with its Mediterranean climate, excellent lifestyle, and stable real estate market. Popular destinations such as Marbella, Estepona, and other parts of the Costa del Sol remain top choices thanks to their luxury housing, vibrant communities, and solid investment potential.

This guide explains how foreigners can buy property in Spain today, what documents and taxes are required, how the process works, and the recent changes regarding residency and investment visas.

1. Can Foreigners Buy Property in Spain?

Yes. Spain places no restrictions on foreign ownership of property. Both EU and non-EU citizens can freely purchase real estate, whether residential or commercial. You do not need to be a resident of Spain to buy property.

However, every foreign buyer must obtain a Spanish NIE (Número de Identificación de Extranjero). This identification number is required for all property transactions, bank accounts, and tax filings in Spain.

2. Required Documents for Property Purchase

To buy property in Spain, you will generally need:

• A valid passport or national ID (for EU citizens)

• A Spanish NIE number

• Proof of funds or source of income (to comply with anti-money laundering laws)

• A Spanish bank account, especially if making payments or applying for a mortgage

• If financing, income statements or tax returns may be required by the bank

Your lawyer will also review the seller’s property documents, including the title deed, registry extract, property tax receipts, and certificates confirming that the property is free of debts or encumbrances.

3. The Reservation Process

Once you’ve found a property, the first formal step is usually signing a reservation agreement and paying a small deposit — typically between €3,000 and €10,000. This deposit takes the property off the market while legal checks are carried out.

During the reservation period, your lawyer performs due diligence, verifying ownership, checking building permits, confirming there are no legal issues, and ensuring the property complies with local regulations. The deposit is usually held in escrow until the next stage.

4. The Private Purchase Contract (Contrato de Arras)

After successful due diligence, the next stage is signing the private purchase contract, known as the Contrato de Arras.

At this point:

• The buyer pays 10% of the property price (less the initial reservation deposit).

• The contract sets the payment terms, completion date, and penalties for non-compliance.

Once signed, the contract legally binds both buyer and seller. If the buyer withdraws without cause, they may forfeit the deposit; if the seller withdraws, they typically must return double the deposit amount.

5. Completion and the Notary (Escritura Pública)

The final step is the signing of the public deed of sale (Escritura Pública) at the notary’s office. Both parties (or their representatives) attend this appointment.

At the notary:

• The remaining balance of the purchase price is paid.

• The notary verifies all legal requirements and ensures both parties understand the terms.

• Once signed, the notary sends the deed to the Land Registry, officially transferring ownership to the buyer.

The notarial system is a strong safeguard for buyers in Spain, ensuring the legality and transparency of every transaction.

6. Taxes and Fees When Buying Property in Spain

Buyers should budget approximately 10–12% extra on top of the purchase price for taxes and fees. These vary depending on the region and whether the property is new or resale.

For New Properties:

• VAT (IVA): 10%

• Stamp Duty (AJD): 1–1.5%

For Resale Properties:

• Transfer Tax (ITP): 6–11%, depending on the region

Other Costs:

• Notary fees: 0.1–0.4%

• Land Registry fees: 0.4–1%

• Legal fees: around 1% of the property price

Example:
In Andalusia (where Marbella and Estepona are located), resale properties generally incur around 7% ITP, while new builds are subject to 10% VAT plus about 1% stamp duty.

7. Payment Structure

Payments are typically made in three stages:

1. Reservation deposit to take the property off the market

2. 10% payment when signing the private purchase contract

3. Final balance on completion day at the notary

Payments are usually made through a Spanish bank account to ensure proper documentation and compliance with Spanish financial regulations. If financing is required, the mortgage must be approved before the final signing.

8. Mortgages for Foreign Buyers

Most Spanish banks offer mortgages to non-residents, although conditions differ from those for Spanish residents.

• Loan-to-value ratio: usually 60–70% of the property value

• Interest rates: typically range between 3.5% and 4.5%

• Required documents: proof of income, tax returns, credit report, and existing debt statements

Mortgages can be in euros or other major currencies, though euro-based loans are most common.

9. Timeline for the Buying Process

The full process — from reservation to completion — usually takes 6 to 12 weeks, depending on the property, financing arrangements, and any legal complexities. Working with experienced lawyers and real estate agents helps ensure a smooth and timely process.

10. Residency and Investment Visas (Important Update)

Until recently, foreigners could obtain residency through Spain’s Golden Visa by investing at least €500,000 in real estate. However, as of April 2025, the Golden Visa route for property investment has been officially discontinued.

• New Golden Visa applications based on property purchases are no longer accepted.

• Existing Golden Visa holders may still renew under previous rules.

• Other visa routes — such as the Non-Lucrative Visa, Digital Nomad Visa, or Business Investment Visa — remain available.

Therefore, while foreigners can still freely buy property in Spain, property ownership alone no longer grants residency rights.

11. Annual and Ongoing Taxes for Property Owners

Once you own a property in Spain, you’ll need to be aware of the following ongoing obligations:

Annual Property Tax (IBI)

A local municipal tax based on the cadastral value of the property. Rates usually range from 0.3% to 1.1%, depending on the municipality.

Non-Resident Income Tax

If you don’t rent out your property, Spain imputes a small notional income tax based on the property’s cadastral value. If you do rent it out, you must declare rental income and pay tax accordingly.

Wealth Tax

Applies to high-value properties or portfolios exceeding regional thresholds (often around €700,000 per owner, though this varies by region).

Capital Gains Tax

When selling the property, non-residents must pay tax on any capital gain. Typically, 3% of the sale price is withheld by the buyer as an advance payment toward this tax.

12. Marbella vs. Estepona – Tax and Cost Overview

Location	Resale Property Tax (ITP)	New Property VAT (IVA)	Stamp Duty (AJD)	Notary + Registry
Marbella	7–10%	10%	1.2%	1–1.5%
Estepona	7–9%	10%	1%	1–1.5%

Foreign buyers should plan for an additional 10–13% of the purchase price to cover taxes, legal fees, and registration.

13. Common Questions (FAQ)

Do I need to be in Spain to complete the purchase?
No. You can grant Power of Attorney to your lawyer to handle the entire process remotely.

Can I buy property in Spain without being a resident?
Yes. Residency is not required — only an NIE number.

Are property prices negotiable?
Yes. In markets like Marbella, it’s common to negotiate 5–10% below the asking price.

How secure is the buying process?
Spain’s notarial system, property registry, and due diligence requirements make the process transparent and secure for buyers.

Does buying property still grant residency?
No. The real estate investment route to the Golden Visa ended in April 2025. Buyers seeking residency must now use other visa categories.

Summary: Step-by-Step Overview

1. Obtain your NIE and open a Spanish bank account.

2. Sign a reservation agreement and pay the deposit.

3. Complete due diligence with your lawyer.

4. Sign the private purchase contract (10% payment).

5. Finalize financing or prepare full funds.

6. Complete at the notary and sign the title deed.

7. Register ownership and pay the applicable taxes.

Final Thoughts

Buying property in Spain as a foreigner remains a straightforward and secure process when handled with proper legal and financial guidance. While the Golden Visa for real estate investment no longer exists, Spain’s real estate market continues to offer excellent lifestyle and investment opportunities — particularly in regions like Marbella, Estepona, and the Costa del Sol, where international demand remains strong.