Buying property in Spain as a foreigner: complete guide

Prerequisites for buying as a foreigner

Any foreign person can buy a property in Spain. There are no nationality or residency restrictions. A US, Mexican, Chinese or British citizen can acquire real estate on the same terms as a Spaniard. What changes are certain tax and administrative procedures.

NIE: the foreigner identification number

The NIE is a tax number required for any financial transaction in Spain. Without a NIE you cannot sign the purchase deed, pay taxes or open a bank account in your name.

The NIE is applied for at the foreigners' police station in Spain or at the Spanish consulate in your country. The process takes between 1 and 6 weeks depending on where you apply. You can also grant a power of attorney to a representative to apply on your behalf, which speeds things up if you cannot travel to Spain.

If you need the NIE urgently, at Notaría Online we handle the application through a representative. The power of attorney is signed by video conference.

Bank account in Spain

You need a Spanish bank account to pay the taxes associated with the purchase and to set up direct debits for property bills (IBI, community fees, utilities). Some banks allow non-residents to open accounts, although requirements vary:

• Valid passport and NIE.
• Proof of income or tax return from your home country.
• Proof of address abroad.

If you are an EU resident, opening an account is simpler thanks to the free movement of financial services regulations. For non-EU non-residents, some banks require additional compliance documentation (KYC).

The arras contract

Before the deed, it is customary to sign an arras contract (confirmatory or penitential arras). The buyer pays the seller a deposit, normally between 5% and 10% of the price.

Under penitential arras (article 1454 of the Civil Code), if the buyer pulls out, they lose the deposit. If the seller pulls out, they return double. This protects both parties and allows time to arrange financing and documentation.

The arras contract is a private document. It does not need notarial signing, but it is highly advisable to have a lawyer review it, especially if you are a foreigner unfamiliar with local legislation.

Purchase taxes

Taxes depend on whether the property is new (first transfer) or second-hand:

New property (from developer):

• VAT: 10% of the sale price. In the Canary Islands, IGIC of 6.5%.
• Stamp duty (AJD): between 0.5% and 1.5% depending on the autonomous community.

Second-hand property:

• Transfer Tax (ITP): between 6% and 11% of the price depending on the autonomous community. Examples: Catalonia 10%, Madrid 6%, Andalusia 7%, Valencia 10%, Balearic Islands 8-13% (progressive scale).

These taxes are paid by the buyer. They are filed with the autonomous community within 30 working days of signing the deed.

The 3% withholding for non-residents

If the seller is a non-resident taxpayer in Spain, the buyer is obliged to withhold 3% of the purchase price and pay it to the tax authorities (form 211). This is a withholding on account of the seller's Non-Resident Income Tax (IRNR).

But note: if you are a non-resident buyer, you may also face this situation in reverse in a future sale. That is, when you sell, your buyer will withhold 3% from you.

If the seller is a tax resident in Spain, there is no 3% withholding.

Notary and registry costs

Conveyancing costs are proportional to the property price:

• Notary fee: regulated by law. For a purchase of €200,000, the fee is around €600-800. For €400,000, around €800-1,000. The fee decreases proportionally as the price rises.
• Land Registry: the registry fee for recording the purchase is usually 50-70% of the notary fee. For €200,000, around €400-500.
• Agency: if you delegate the tax filing and registry work, the agency charges between €300 and €600.

In total, notary, registry and agency costs represent between 2% and 3% of the purchase price.

Financing: mortgage for non-residents

Spanish banks grant mortgages to non-residents, but with stricter conditions than for residents:

• Loan-to-value: between 60% and 70% of the appraised value (compared to 80% for residents).
• Term: up to 20-25 years (compared to 30 for residents).
• Interest rate: usually slightly higher. A spread of Euribor + 1.5% to 2.5% is typical.
• Additional documentation: tax return from your home country, bank statements for the last 6-12 months, employment contract or proof of income.

The property valuation is ordered by the bank from an approved appraisal company. The cost is around €300-500 and is paid by the buyer.

Golden Visa: residency through investment

If you buy property (one or more) worth €500,000 or more, you can apply for an investor residence visa (the so-called Golden Visa). Law 14/2013 of 27 September, supporting entrepreneurs, regulates this visa.

Note: in April 2025, the government announced its intention to eliminate or reform the Golden Visa for property purchases. Check the current status of the regulations before making decisions based on this visa.

The Golden Visa allows you to reside and work in Spain, travel freely within the Schengen area and include your spouse and minor children. It is renewed every 2 years as long as you maintain the investment.

Purchase process step by step

1. Obtain your NIE. If you do not have one, apply as soon as possible. Without a NIE you cannot proceed.
2. Open a bank account at a Spanish bank.
3. Find the property and negotiate the price. If buying from abroad, a local lawyer can visit it and verify its condition.
4. Check the registry status. Request a nota simple from the Land Registry to confirm the seller is the owner, there are no charges (mortgages, liens) and the description matches reality.
5. Sign the arras contract and pay the deposit (5-10%).
6. Apply for a mortgage if you need financing. The bank takes 3-6 weeks to approve.
7. Sign the purchase deed before a notary. If you cannot travel, you grant a power of attorney to a representative who signs on your behalf.
8. Pay taxes (ITP or VAT + AJD) within the following 30 days.
9. Register at the Land Registry. Once registered, the property is legally yours against third parties.
10. Transfer utilities (electricity, water, gas) and register with the owners' association.

Tax obligations for non-resident owners

If you buy a property in Spain and do not reside in the country, you have annual tax obligations:

• IRNR (form 210): if you rent it out, you pay tax on the rental income. If you do not rent it out, you pay tax on imputed income (1.1% or 2% of the cadastral value, depending on whether it has been revised). The tax rate is 19% for EU residents and 24% for others.
• IBI: the local property tax is collected by the town hall. It ranges from 0.4% to 1.1% of the cadastral value depending on the municipality.
• Wealth tax: if the net value of your assets in Spain exceeds €700,000 (€3,000,000 in some communities), you may be subject to wealth tax.

Buy property in Spain with online help

At Notaría Online we support foreign buyers throughout the entire process. If you cannot travel to Spain, we arrange the power of attorney by video conference so a representative can sign the deed on your behalf.

We also process the NIE through a representative, without you having to visit a police station or consulate.