How to buy a house in Spain

Date: 5th September 2019


If you say to yourself: "I want to buy a house in Spain" and at the same time ask yourself: "How can I buy a house in Spain?", then please go on reading this article!


It doesn´t matter whether you are interested in buying a fancy penthouse in the centre of Madrid, a quiet family home in the mountains or an olive grove in Extremadura, the procedure and what you should be aware of in all cases is similar.


Therefore, today I would like to give an overview of buying a property in Spain and answer all questions that my clients ask most frequently. 

1. How do I find the right property?

In my opinion, that depends on what you want to do with the property. Do you want to rent it out? Do you want to use it as a vacation apartment? Are you considering moving permanently to Spain

Depending on your intentions, the demands on the object of purchase are different. When renting a property, you should consider to whom and for how long you want to rent it out, because the apartment a student is looking for is very different from the one a family of 4 is searching.


You can contact a real estate agent or simply walk around in the area you are interested in, as there are often signs on windows or balconies that indicate that an apartment is for sale.

When you search through a real estate agent, please clarify beforehand the conditions, whether you have to pay him in any case or only if you actually find a purchase object, or if the costs are even paid by the seller (in the end, of course, this will be added to the sales price ...).


Be sure to take a close look at the property you are interested in. Or even better: make a list of what you really want and what you definitely don´t want. This makes the selection much easier. In Madrid, for example, a bright apartment is very nice at first sight, but it can get uncomfortably hot in summer if the insulation is not good.

2. Which documents must I check before buying?

a) Situation in the land register (Registro de la propiedad):

Before buying a property in Spain, you should always check the situation in the land register (Registro de la Propiedad). There you can see if the seller is really the registered owner, if there are any senior debts that you may take on as a buyer, etc.

b) Property tax (IBI) and community costs (gastos de comunidad):

If you want to buy an apartment that belongs to a community of owners (propiedad horizontal/ urbanización), you should obtain a proof that there is no debt related to the monthly community costs ("estar al corriente de pagos de los gastos de comunidad").

It is also important to check whether the property tax (IBI) was properly paid each year. To be on the safe side, you can request a confirmation from the city council.

c) Is there a mortgage?

If the seller had financed the purchase of the property with a mortgage, you can ask for a subrogation, which means that you would be the new mortgagor. In this case be sure to have a very close look at the mortgage conditions.

d) Are there tenants?

It is very important to find out if there are living any tenants in the property, as they usually have the right to stay, and sometimes a right of preemption, i.e. only if the tenant himself does not want to buy the apartment, the owner can sell it to someone else.

e) Energy efficiency certificate (certificado de eficiencia energética):

Nowadays, when selling a property, the seller must always hand over an energy efficiency certificate to the buyer ("certificado de eficiencia energética"). Looking at this certificate, you will get an impression on how energy efficient (or not) the house or apartment you are buying really is. If this certificate is not provided by the seller, he may be fined with 600 - 1.000 euros.

f) Who is the seller?

Regarding the seller, you must find out if he is resident in Spain or not. In case the seller is a non-resident, you as the buyer must withhold 3% of the purchase price and pay it to the Tax Office (IRNR = Impuesto de la Renta de No Residentes, income tax for non-residents).

3. What are the steps to follow when buying a house in Spain?

From my experience, to buy a house in Spain, these are the steps to follow:

  1. Get a NIE-number (only for Non-Spaniards).
  2. Select the property you want to buy.
  3. Examine the important documents about the property and the seller (land register, property tax, community costs, mortgage, rental agreements, energy efficiency certificate, census situation of seller).
  4. Sign the preliminary contract, the so-called "Arras".
  5. If necessary, search a bank to finance the purchase.
  6. If you want to sign a mortgage contract, please note: since June of 2019 there are new regulations in the area of mortgages in Spain, the buyer must go to the notary one time before actually signing the mortgage contract. This additional visit to the notary is now obligatory to make sure the future mortgagor fully understands what he is signing.
  7. Sign the sales-purchase deed and the mortgage contract (if applicable) before the notary.
  8. Pay the taxes.
  9. Register as the new owner in the land register.
  10. Update the information about the ownership in the land registry ("catastro") and inform all suppliers (water, gas, electricity,...).

4. What will this cost me?

There are several costs to consider when buying a house in Spain:

  • Real estate agent,
  • Lawyer,
  • Gestoría (to change registrations, file tax returns, apply for a NIE, ...),
  • Notary (purchase deed, mortgage contract),
  • Land register (examination of the situation before buying, registration of the new owner after buying),
  • Taxes (VAT or Property transfer tax (ITP); Plusvalía municipal),
  • Mortgage (if applicable).

5. Example: How much will I have to pay to buy a flat in Madrid, including taxes, lawyer etc.?

Imagine you want to buy an apartment (not a new building) in Madrid and the purchase price is 200,000 euros.

What other costs are linked to this purchase?


- The real estate agent takes about 3% of the purchase price, so this would be 6,000 euros.

- If the buyer brings in a lawyer, he charges around 1% of the purchase price for the examination of the documents and for accompanying the buyer to the notary, so this would be 2,000 euros in our example.

- The Gestoría usually calculates its fees on what is actually done (file tax returns, NIE application, etc.). You should calculate around 500 euros in our case. 

The fees of the real estate agent, the lawyer and the Gestoría can be freely agreed, there are no legal requirements in this regard. Usually the real estate agent's fees are based mainly on the price, the lawyer's fees on the complexity of the situation and the cost of the Gestoría on what they handle.


- The notary fees are based on a statutory fee schedule, so it does not matter in this aspect which notary you choose. In our example, the notary costs about 850 euros for the sales-purchase deed. If there is a mortgage, the notary fees for the execution of the mortgage deed must be paid by the bank since June 2019.


- The cost of the change in the land register is based on the purchase price, in our example about 400 euros.


- The tax on the value increase of real estate ("IITVU", or also "plusvalía municipal") is paid by the seller.


- The tax on the transfer of ownership can either be the VAT (for first-time housing) or, in the case of second and subsequent transfers, the property transfer tax (= ITP, Impuesto de Transmisiones Patrimoniales).

The VAT for new buildings is 10%, or 4% for social housing (for which some peculiarities apply, but I will not go into detail here).

The ITP is between 6% - 10% of the purchase price, depending on where the property is located; in our example in Madrid, the tax rate is 6%, i.e. 12,000 euros. This tax is due within 30 days of purchase.



So in our example with the purchase price of 200,000 euros, the additional costs for the purchase are:

6,000 + 2,000 + 500+ 850+ 400+ 12,000 = 21,750 euros, which is around 11% of the purchase price.


With this example I want to show how important it is to take into account the additional costs, as they can be high.

Only then one can calculate its budget for the purchase price correctly.

6. Are there any further costs after the purchase for the new owner?

Yes, once you own your new property, the expenses unfortunately don´t stop.


First of all, the owner has to pay the property tax (IBI) once a year.


I. If the buyer is resident in Spain, he may have to consider his new property in the income tax (IRPF). He does not have to pay any income tax on it when it is his home (where he lives) or his office for his commercial or professional activity.

If he rents out the property, however, he must pay income tax on the rental income.

If the flat is vacant, the Revenue Office assumes an income (ficticiuos income) and the owner has to pay income tax on the empty apartment. 

Also in the context of wealth tax, the value of the property must be taken into account.


II. If the buyer is non-resident in Spain, he is subject to the income tax of non-residents (IRNR). Through this tax, either the actual income is taxed (if the property is rented out), or the fictitious income is taxed (if empty or only used by the owner as vacation apartment).

For non-residents, wealth tax must also be considered, but only if the total value of the assets located in Spain is such that it must be filed. 


This article shall give an overview of how to buy real estate in Spain.

You now know which documents you need to have a look at, what the buying process is like, what additional costs you will incur and what tax implications it has to own a property in Spain.


Have you already found a property you want to buy? Are you now looking for an experienced lawyer who checks all relevant documents for you and helps you through the whole purchase process?


Wouldn´t it be great if someone who speaks your language handles all tax declarations and registry changes for you?

Or are you just beginning the process and need a NIE first?


In all those cases: Please contact me!

Let me know your specific situation and I will help you to find the best option and to overcome all bureaucratic and linguistic obstacles. It is that easy.