The property purchase in Spain by foreigners has increased in recent years. This country has become one of the most attractive destinations to invest in homes and start a new life, a second home or diversify their assets.
However, buying a house in Spain involves a legal and financial process that you should know in detail. If you want to avoid mistakes when you go to buy your next home in Spain, in this article you will find all the answers you need to know to achieve a successful and hassle-free purchase.
Are you thinking of buying a house in Spain?
Over the years, Spain has become the paradise where every foreigner wants to start living. Its beaches, its climate, its gastronomy… There are many factors that make it idyllic for those who want to improve their quality of life.
In 2024, foreigners bought more than 87.000 homes in Spain, representing almost 15% of all real estate transactions in the country, whether in a second-hand home or a newly built one.
The buying process step by step
The process of buying a house in Spain has a series of steps that you have to follow. For this, we always recommend to be accompanied by Spanish property lawyers to avoid making any mistakes.
Finding the right property
The first step is finding your dream home. Find the perfect location and find that property that fits your needs and budget. You can contact professionals in the industry to help you find it and make the process much easier.
Making an offer and signing a reservation contract
Once you have the property in view, it is time to negotiate the price and conditions of the purchase. In addition, the signing of the reservation contract will take place where, generally, an initial deposit of 5% to 10% of the price of the property is given.
Due diligence and legal checks
Before buying the house make sure that it is free of charges, mortgages or outstanding debts. This you can do thanks to lawyers specialized in real estate in Spain. In addition, they will check that the construction has all the necessary licenses and permits.
Signing the purchase contract and paying the deposit
If everything is in order, it is time to sign the contract, known as โContrato de Arrasโ, where all the conditions of the sale must be stated. Afterwards, the payment of the deposit agreed upon by both parties will be made.
Completion at the notary and property registration
The final step when buying a house in Spain is the signing of the title deed, the payment of the remaining amount and the registration of the property… Once you have the title deed at the land registry… The house is yours!
Financial considerations for foreign buyers
When you buy a property in Spain, you will find that there are several costs associated with this transaction. Therefore, before entering the world of real estate, you need to know that:
Costs associated with buying property in Spain
The costs associated with the purchase of a home include taxes, notary and registry fees and the fees of lawyers and real estate agents, provided that you contract any of these services.
Spanish mortgages for non-residents
It is possible to obtain a mortgage in Spain as a non-resident foreigner, although conditions may vary:
- Percentage of financing: Generally, up to 70% of the value of the property.
- Repayment term: Usually up to 20 or 25 years.
- Requirements: Demonstrate economic solvency, credit history and, in some cases, have a bank account in Spain.
Taxes and fees when you are buying a house in Spain
Taxes are also present in any home purchase.
Property Transfer Tax (ITP) and VAT (IVA)
- ITP: Applies to second-hand properties and varies between 6% and 10% of the purchase price, depending on the autonomous community.
- VAT: For new homes, it is 10% of the purchase price.
Ongoing property taxes and municipal costs
- Real Estate Tax (IBI): An annual tax based on the cadastral value of the property.
- Municipal taxes: Such as the garbage or sewage tax, which vary according to the municipality.
Common mistakes to avoid
As you can see, this process can be somewhat tedious and a bit complicated if you do not do it accompanied by experts. Therefore, it is very common for some mistakes to occur. These are the most common ones:
Not hiring a qualified lawyer
The main mistake that is made when buying a house in Spain is to do it independently without the advice of expert hands, such as specialized lawyers. In the real estate market there is a lot of fraud and they take advantage of the lack of knowledge of the people to try to swindle in the purchase of the house.
Failing to check property debts and encumbrances
Another of the most common mistakes is not checking if the house has debts and encumbrances from the previous owners. Acquiring a property with outstanding debts can transfer those obligations to the new owner.
Ignoring community fees and maintenance costs
Do not focus only on the expenses of the house itself. A house has other independent expenses, such as the community fees, maintenance or possible spills.
Pellicer & Heredia property lawyers in Spain
Pellicer & Heredia is an international law firm with more than 20 years of experience in the real estate sector. Thousands of clients already enjoy their new home thanks to their services and the personalized treatment they receive. Their team will accompany you through every step of the buying process, ensuring that your investment in Spain is safe and successful.
