Explore the Considerations for Buying Property in Spain as a Non-Resident
With its sun-kissed beaches, happening cities, and historical beauty, Spain has gained popularity with property buyers looking to explore a new destination.
If you're thinking of buying a property in Spain, you're not alone! In 2023, over 1 million expats moved to Spain.
In this blog, we will explore the diverse and attractive real estate market that Spain has to offer and the main things you should consider as a non-resident buying property in Spain.
Whether you're dreaming of a coastal retreat a countryside villa, or a cosy urban apartment, there are several key steps you will need to follow.
Table of Contents:
Can I Buy Property in Spain as a Non-Resident?
The simple answer is yes.
Non-residents can buy property in Spain without any restrictions. The process is relatively simple, but it's essential to familiarise yourself with local regulations and tax obligations.
Legal Considerations as a Non-Resident
Buying property in Spain as a non-resident is straightforward, but it is crucial to be aware of the following processes in place, these include:
- NIE Number: The first step for any foreigner buying property in Spain is to obtain a Numero de Identification de Extranjero (NIE). This identification number is required for all financial transactions in Spain, including purchasing property.
- Lawyers: It is not a legal requirement to engage a lawyer in the process, but we would advise you to hire an independent lawyer who specialises in Spanish property law. They can guide you through the process, ensure all paperwork is in order, and protect your interests.
The team at EasyFX have a great and reliable network of local Spanish property lawyers who can support you during this process. - Property Title and Debts: If you choose to hire a lawyer they will conduct due diligence to verify that the property has a clear title and is free from any debts or legal issues. This includes checking that all taxes, community fees, and utility bills have been paid by the previous owner.
- Purchase Agreement: Once you've found a property, you'll sign a purchase agreement, locally known as a Contrato de Arras, which outlines the terms of the sale and includes a deposit - which is usually 10% of the purchase price. This deposit is non-refundable if you decide to withdraw from the purchase.
- Notary and Title Deed: The final step is signing the title deed or "Escritura", in front of the notary. The notary ensures the legality of the transaction, and the deed is then registered with the local land registry.
Potential Challenges for Non-Residents Buying Property in Spain
Before you commit to buying a property in Spain as a non-resident, it is important to be aware of the potential challenges you may face, including:
- Currency Exchange: Fluctuations in exchange rates can significantly impact the final cost of your Spanish property purchase. It's wise to use a currency exchange specialist to lock in favourable rates and help you navigate this process.
- Language Barrier: While many Spaniards speak English, especially in popular areas, legal and administrative documents are usually in Spanish. Having a bilingual lawyer or translator on hand will be essential if you are not familiar with Spanish.
- Market Fluctuations: The Spanish property market can be volatile, especially in tourist areas. It's important to consider the long-term prospects of your investment and not just short-term gains.
- Property Condition: Always have the property professionally inspected before purchase. Issues like dampness, poor construction, or hidden defects can lead to costly repairs.
What is Homeownership like in Spain?
Homeownership in Spain is a popular choice, both among locals and expats. Some of the factors that sway property buyers include:
The Spanish Climate
Spain boasts one of the best climates in Europe, particularly along its Mediterranean coast and the Canary Islands. The warm weather, abundant sunshine, and mild winters make it a perfect year-round destination.
The average temperature across the year, and the country, is 21.9°C, making the country a pleasant place to live regardless of the time of year.
Diverse Locations
Whether you prefer bustling city life or a more relaxed environment, Spain offers a variety of settings to suit different tastes and lifestyles.
Coastal areas like the Costa del Sol and Costa Blanca are renowned for their stunning beaches, vibrant expat communities, and abundant sunshine, whilst The Balearic and Canary Islands offer a more exclusive and scenic island living experience.
Cities like Madrid and Barcelona provide a cosmopolitan atmosphere with rich cultural offerings and excellent amenities, but for those preferring tranquillity, the rural landscapes of Andalusia or the lush, green regions of Northern Spain, such as Galicia and Asturias, offer authentic charm and peaceful surroundings.
Affordable Prices
The average cost of property in Spain is €389,773 (£329,904), making their property market relatively affordable compared to many Western European countries.
This lower cost of living goes beyond property, making Spain accessible to a broad range of people, including retirees, expats, and young professionals.
Quality of Life
The quality of life in Spain is widely regarded as one of the best in Europe. The Mediterranean diet, complete with fresh fish, vegetables and fruit is a staple in Spain and renowned for its health benefits, contributing to the country's quality of living.
Additionally, Spain offers excellent healthcare, with both public and private systems providing top-tier medical services.
For those who enjoy social stimulation, Spain's social culture emphasises both family and community whilst enjoying life, with a strong tradition of festivals, outdoor dining, and socialising. This combination of health, culture, affordability, and lifestyle makes Spain an attractive destination for those seeking a high quality of life.
Spanish Property Prices: A Brief Overview
The Spanish property market is varied with significant regional differences in prices. Coastal areas and major cities tend to have higher property prices, due to demand, while more rural regions offer affordable options.
Whilst property prices are mostly stable across Spain, some regions continue to experience slight price increases, the general trend in 2024 points towards price stability across most areas, with only modest fluctuations expected depending on local factors such as tourism, foreign investment, and housing supply.
Regions in Spain
- Costa del Sol: Known for its stunning beaches and vibrant expat communities, Costa del Sol is one of the most popular regions for non-residents. Marbella, Fuengirola, and Estepona are particularly sought after. Prices can be higher in these areas due to demand, but there are also good-value properties to be found in less popular towns.
- Balearic Islands: Mallorca, Ibiza, and Menorca are famous for their natural beauty and luxurious lifestyle. Property prices here tend to be higher, especially in prime locations, but the islands offer a unique blend of Mediterranean living and exclusivity.
- Madrid and Barcelona: These two major cities are cultural and economic hubs with thriving property markets. Madrid offers a more traditional Spanish experience, while Barcelona combines modern living with coastal beauty. Prices in both cities are among the highest in Spain, particularly in central and prestigious neighbourhoods.
- Costa Blanca: Stretching along the southeastern coast, the Costa Blanca is known for its white sandy beaches and picturesque towns like Alicante and Benidorm. Property prices are more affordable than in the Costa del Sol, making it a popular choice for those looking to retire or buy a holiday home.
- Northern Spain: Regions like Galicia, Asturias, and the Basque Country offer a different side of Spain, with lush green landscapes, slightly cooler climates and a strong cultural identity. The property market here is less developed, but it's ideal for those seeking a quieter, more authentic Spanish experience.
Understanding Spanish Property Prices
In major cities like Madrid and Barcelona, property prices remain some of the highest in the country, with Barcelona seeing average prices around €4,000 to €5,000 per square metre.
The Balearic Islands, particularly in Ibiza and Mallorca, are also among the most expensive areas, where prices can reach up to €5,200 per square metre in prime locations.
The Costa del Sol, especially in areas like Marbella, continues to attract high demand with average prices of around €3,200 per square metre.
More affordable regions include parts of Castellon and Almeria on the Costa del Azahar and the southern coast, where property prices can be as low as €800 to €1,100 per square metre.
Murcia is also noted for affordability, making it a popular choice for those looking to purchase property at lower prices, particularly for second homes.
Finding a Spanish Property as a Non-Resident
Finding the right property in Spain involves research and potentially working with local real estate agents who understand the market. The first step is to determine the region that suits your lifestyle and investment goals, as Spain offers a wide range of locations from busy cities to more relaxed coastal areas.
Non-residents typically start their search online using popular Spanish property portals like Idealista or Fotocasa, which list a wide variety of properties. However, it's advisable to work with a local real estate agent, especially one familiar with helping foreign buyers navigate the Spanish property market. These agents can provide insights into the local market conditions, recommend suitable properties, and guide you through the legal requirements.
If possible, we advise you to visit the properties in person before making any decisions to get a true sense of the area, the property's condition, and its surroundings. Financing options are available for non-residents, but they often require a larger down payment compared to residents.
The Cost of Buying Property in Spain as a Non-Resident
In addition to the property's purchase price, buyers should budget for several additional costs, including taxes, notary fees, legal fees, and registration costs.
Typically, these expenses add up to around 10-15% of the property price.
Understanding these costs in advance is crucial to avoid any financial surprises and to ensure you have sufficient funds to complete the purchase.
Many foreign buyers choose to finance their Spanish property through a mortgage and Spanish banks offer a variety of mortgage products for non-residents. Foreign buyers can finance their property purchase in Spain through local banks, which offer various mortgage options. Non-residents can usually borrow up to 70% of the property's value, with competitive interest rates available. Here are some key factors to consider:
- Loan-to-Value Ratio: Spanish banks typically offer up to 70% of the property's value to non-residents. You will need to provide a down payment of at least 30%.
- Interest Rates: Mortgage rates in Spain are generally competitive, with both fixed and variable-rate options available. However, it's crucial to compare different offers and consider the long-term costs.
- Income requirements: Lenders will assess your ability to repay the mortgage based on your income and existing financial obligations. As a rule of thumb, your total debt payments should not exceed 35-40% of your net monthly income.
Navigating the Spanish Bureaucracy
Spain is known for its bureaucratic processes, which can sometimes be slow and complicated. Patience and persistence are key:
- Registering the Property: After the purchase is complete, the property must be registered in your name at the local land registry. This process is usually handled by your lawyer or notary.
- Utility Transfers: Utilities such as water, electricity, and gas will need to be transferred into your name. This can take some time, so it's advisable to start the process as soon as possible after the purchase.
- Community Fees: If you're buying an apartment or a property within a residential complex, you'll be responsible for paying community fees. These cover the maintenance of communal areas and services.
Buying Property in Spain as a Non-Resident: A Summary
Buying property in Spain offers the chance to enjoy a relaxed Mediterranean lifestyle, invest in a growing market, and perhaps even generate rental income with a holiday rental. However, it's essential to approach the process with care, patience, and professional guidance.
By understanding the local market, legal requirements, and potential challenges, you can make a well-informed decision as a non-Spanish resident and find the perfect Spanish property that meets your needs and aspirations.
Whether you're looking for a holiday home, retirement retreat, or a smart investment, Spain's property market has something for everyone. With its diverse regions, competitive prices, and high quality of life, Spain remains one of Europe's most attractive destinations for property buyers.
Make Buying Your Dream Spanish Property, Easy.
With over 20 years experience of supporting customers with property purchases worldwide and in Spain, the team at EasyFX can help you make your dreams of owning an international home, a reality.
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Our aim is to provide you with a competitive exchange rate for your significant international money transfers with no added-on transfer fees, potentially saving you thousands on your Spanish property purchase.
With offices in Spain, we can make sure your property purchase as smooth as possible with our reliable network of Spanish property lawyers and real estate agents.
As an FCA and FINTRAC-authorised and regulated Electronic Money Institution, your money will always be secure and safe in segregated client accounts.
We have helped over 40,000+ happy customers make their foreign exchange for purchasing property overseas, Easy.
If you'd like to discuss your international property requirements, or any international money transfer needs, with a real, personal currency exchange broker, then please get a free transfer quote today or contact us directly, our team are waiting to help!
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