Buying Property in Spain | A Comprehensive Guide for Foreign Buyers
Purchasing a property in Spain is a significant investment. Whether you’re searching for a vacation home, permanent residence, or an investment opportunity, our comprehensive guide walks you through every step of the process. Learn how to obtain an NIE number, secure the best property deals, and understand all the legal and financial obligations involved. From off-plan developments to resale properties, we ensure you have everything you need to make a safe and informed purchase in Spain.
Understanding the NIE Number for Property Purchases
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Foreigners can buy a property in Spain without being residents. Before foreigners can acquire a property, they must obtain a "foreign identification number" (NIE) issued by Spanish authorities.
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What is the NIE Number?
The NIE number is a spanish tax identification number for foreigners. It is required for the registration of your property purchase with the Property Registry and for payment of taxes. The NIE number is also necessary for setting up contracts with service providers such as electricity and water companies, phone/internet, etc.
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How to Obtain Your NIE Number​
Your lawyer will assist you in obtaining a NIE number in Spain. You can also obtain a NIE number at the Spanish Embassy in your country. If you intend to buy a property in Spain, you will need to take the following steps:
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Steps to Buying a Property in Spain
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Reserving a Property
In order for a property to be taken off the market, it is usual for the potential buyer to place a deposit of between EUR 6,000 - 10,000. The amount varies based on the purchase price of the property and can be transferred to the buyer's law firm.
Due Diligence Process
Once the deposit is placed, your attorney will request the contact information of the seller's attorney from the real estate agent. This is to request the necessary documentation to perform due diligence, where the attorney examines all relevant aspects related to the property, such as:
Off plan or Newly Built Property:
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The legal identity of the owner/seller of the property you intend to purchase.
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That the construction under development is properly registered in the property registry.
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That the property is free from debt and encumbrances (priority loans, liens, etc.). It is common for the developer to have obtained financing for the project, which may take the form of a loan. If the buyer is not interested in taking over the proportional part of the financing in the form of a loan on the property, the developer's loan must be cancelled before the completion of construction. The costs for this are borne by the developer.
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That the construction has obtained building and occupancy permits (if applicable) from the relevant municipality and complies with local urban planning regulations.
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That the quality specifications are made available to the buyer and included as an annex to the purchase agreement.
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That there is a bank guarantee or insurance policy in place, which guarantees the funds disbursed to the developer during the construction process.
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Confirming and verifying the content of the mandatory 10-year insurance guarantee (Seguro Decenal), which provides coverage for any structural defects in the property.
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Reviewing the purchase contract drafted by the developer to ensure that its content respects the buyer's rights and that the buyer has fully understood it.
Resale Property
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The legal identity of the owner/seller of the property you intend to purchase.
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That the property is correctly registered in the property registry.
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That the property is free from debt or encumbrances (mortgage, liens, etc.).
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That the construction has obtained building and occupancy permits (if applicable) from the relevant municipality and complies with local urban planning regulations.
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Examination, preparation, and signing of the private contracts (reservation agreements, option contracts, sale contracts) or public notary documents (deeds of purchase/sale) deemed necessary to complete the real estate transaction.
The standard procedure is that a private contract is first signed, where typically 10% of the purchase price is paid, and after a reasonable and agreed-upon period, the deed of sale is signed to finalize the transaction.
Private Purchase Contract
Once the attorney has completed due diligence and everything is in order, the attorney proceeds with the preparation and subsequent signing of the private purchase contract. This typically occurs 2-3 weeks after the signing of the reservation agreement, and a previously agreed-upon amount must be paid to the seller at this time. The usual practice is to pay an amount equivalent to 10% of the purchase price in the case of a resale property and 30% of the purchase price in the case of buying off-plan property. The private contract is a very important step, as it outlines the terms and conditions of the purchase. Therefore, the attorney will conduct the necessary negotiations with the seller's legal representative to ensure the client's interests are protected.
Signing the Deed (Final Transaction)
After the signing of the private purchase contract, the final documents are obtained, and then the deed is signed. Typically, there is a period of 4-6 weeks between these two signatures, but it depends on the conditions agreed upon with the seller. Similar to the private purchase contract, the deed can be signed by the client with the assistance of the attorney.
Taxes and Expenses When Buying Property in Spain
Taxes for Off-Plan or New Builds
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10% VAT on housing
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21% VAT on land, garages, and storage rooms.
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Stamp duty (for Andalusia) 1,5%.
Taxes for Resale Properties
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Transfer tax: 7%
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Notary and Legal Fees
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Notary: Notary fees are calculated according to a scale set by the authorities, depending on what is being purchased (property, land, etc.) and the number of pages contained in the deed. Therefore, all notaries charge the same fee. Notary fees typically range from EUR 600-1,800, depending on the property price.
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Registration fee to the property register is calculated according to a scale set by the authorities. It usually amounts to 50-70% of the notary fee.
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Attorney fees/legal expenses: 1% of the property purchase price plus 21% VAT.
NOTE: In case the purchase is partially financed with a loan (either through a bank or a mortgage institution), notary fees and registration fees are incurred for both the loan and the transaction. This is because a separate deed for the loan must be prepared, which also needs to be registered in the property register. The stamp duty is 1,5% of the loan's mortgage responsibility.
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Why Choose Us for Your Property Purchase in Spain?
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Local Expertise:
Our team has extensive knowledge of the Spanish property market, including the best neighborhoods and hidden gems. We ensure that you make informed decisions based on the most up-to-date market trends. -
Tailored Service:
Every buyer’s needs are unique. That’s why we offer personalized property searches, guiding you to find the perfect home or investment that matches your specific criteria, whether it’s a holiday villa, a coastal apartment, or an off-plan development. -
Complete Legal Support:
We collaborate with experienced lawyers to guide you through the legal processes, from obtaining your NIE number to conducting due diligence and signing contracts. We ensure your transaction is secure and compliant with Spanish law. -
Transparent Costs:
We believe in full transparency. Our team will provide a clear breakdown of all costs involved in the property purchase process, so there are no surprises when it comes to fees, taxes, or legal expenses. -
Seamless Process:
From your first property viewing to the final signing of the deed, we are with you every step of the way. Our goal is to make the entire process stress-free and efficient, ensuring that you feel confident and supported. -
Multilingual Team:
Communication is key, and our multilingual team speaks your language. We ensure there are no language barriers when dealing with Spanish bureaucracy, legal procedures, or negotiations with sellers. -
Post-Purchase Assistance:
Our service doesn’t end once you buy your property. We offer ongoing support with services such as holiday rental management, maintenance, and local services to help you settle in and get the most out of your investment.