You've decided to buy a primary or secondary residence, or to make a rental investment in Spain. With Terreta Spain, the process of buying property will be considerably simplified, especially if you don't live in Spain. Our bilingual experts will be your privileged contacts, answering all your questions and accompanying you every step of the way. And always in a climate of trust and transparency. 

1- The process of buying property in Spain 

First step: the administrative side, before purchase 

Prepare yourself carefully before starting your property visits to optimize your approach. 

The essentials for buying in Spain

1. The NIE

Any foreigner, tax resident or not, wishing to buy a property in Spain, must obtain an NIE number, the Identification Number for Foreigners. This number is essential for tracking financial transactions within the country, as well as for subscribing to essential services such as electricity, gas and internet. 

2. Open a bank account

This is not compulsory, but will make things easier and save you time. If you are not (or do not wish to become) a tax resident in Spain, you will need to provide a valid passport or identity card and your NIE number. 

Any person who lives in Spain for more than 183 (cumulative) days a year and/or whose professional and/or family interests are concentrated in Spain is considered a tax resident.  

Second stage: financing

Since the end of the Covid-19, a growing proportion of real estate investments in Spain have been made without recourse to borrowing. But if you choose this method of financing, here's what you need to know about financing in Spain: 

• For non-residents, it generally covers 60-70% of the cost of the property, so you need to have a substantial personal contribution in order to obtain a loan.
• Tax residents can obtain 90% of the value of the property if it is a principal residence, slightly less if they have already purchased. 
• Loan offers are generated faster in Spain than in most other European countries. Allow 7-8 working days.

Third step: property search

You've spent hours scrolling through the Idealista website, Spain's number 1 real estate portal, but every time you visit it, you're disappointed. The easiest way to find a property is to entrust your search to Spanish real estate professionals. Locally based, familiar with the local market, bilingual and seasoned, they're in the best position to find what you're really looking for, and to prevent you from falling into the traps (all too often) set by unscrupulous owners. 

Terreta Spain is committed to finding the right property for you, checking its suitability and negotiating the purchase price on your behalf. Our experts can, of course, visit the property for you and send you videos and detailed reports after each visit. This method has proved its worth, particularly for international investments. The majority of our customers are of foreign nationality, live outside Spain and don't speak the language.  

Fourth step: reserving the property. 

This is a key moment, known asthe Reserva or the Señal. It involves paying a deposit to block the sale and take the property off the market. The deposit is accompanied by the signature of a contract.

La Señal plays an essential role in real estate purchases in Spain 

1. Commitment: tangible proof of the buyer's commitment and seriousness in the transaction.
2. Security: it offers protection to the seller in the event of the buyer's withdrawal.
3. Exclusivity: guarantees that the property is withdrawn from the market, preventing the seller from offering it to other potential buyers during the agreed period.
4. Transitional stage: the Señal marks the transition from interest to concrete action in the acquisition process.

Frequently, some owners or real estate agents do not take the property off the market, hoping to receive a more attractive offer.  

Main features of the Señal

• Amount: generally between 3% and 10% of the property price.
• Time of payment: on signing the Contrato de arras (see below).
• Function: removes the property from the market and commits both parties to the transaction.

Legal implications

• If the buyer withdraws, he may lose the Señal amount.
• If the seller withdraws, he/she must refund double the amount paid.

Fifth stage: the arras

In Spain, the contrat d'arras is a private agreement between buyer and seller designed to secure the property transaction. It involves the payment of a deposit by the buyer, generally between 3% and 10% of the price of the property. This is the Señal we just mentioned.

Types ofarras contracts in Spain

1. Arras confirmatorias : this type ofarras represents a firm commitment by both parties, with no possibility of unilateral withdrawal.
2. Arras penitenciales Arras penitenciales: this is the most common model. It allows for withdrawal with compensation. If the buyer withdraws, he loses the deposit paid. If the seller withdraws, he must reimburse double the deposit received.
3. Arras penales: this type of contract provides for compensation in the event of non-compliance, but obliges the parties to conclude the agreement.

Information contained in the sales agreement 

• The identity of sellers and buyers
• The precise location of the property
• The amount of the real estate transaction
• Deadline for signing the deed at the notary's office
• The address of the notary who will finalize the sale
• Agreed payment terms
• Any debts associated with the property
• Allocation of notary fees between parties
• Penalties applicable in the event of withdrawal by either party

To enhance the legal security of the transaction, Terreta Spain's experts recommend that you sign the purchase agreement in the presence of a notary. This ensures that all conditions are clearly established and understood by both parties, reducing the risk of future disputes.

Sixth step: Follow-up financing and "Tasación

Two things at this stage:

• Send the preliminary sales agreement (contrato de Arras) to the bank
• Assess the value of the property, known as the "Tasación". The bank normally sends its own "Tasador" (property appraiser), but to save time, you can also send an appraiser yourself, provided it's one of the companies recognized by all the banks. These include Tinsa, Sociedad de Tasación and Gloval. Cost if you do it yourself rather than waiting for the bank to send its expert: around €300.
• FEIN: "Ficha Europea de Información Normalizada". This is a compulsory document that the bank or lender must give you before you sign a mortgage contract. It was introduced by the European directive on mortgages to guarantee the transparency and comparability of offers.

FEIN: "Ficha Europea de Información Normalizada". This is a compulsory document that the bank or lender must give you before you sign a mortgage contract. It was introduced by the European directive on mortgages to guarantee the transparency and comparability of offers.

What does FEIN contain?

It details, in a clear and standardized manner :

• Loan amount
• Interest rate (fixed or variable)
• Loan term
• Monthly payments
• TAEG (Tasa Anual Equivalent)
• Ancillary costs (notary, file opening, etc.)
• Consequences of non-payment
• The possibility of early repayment

Important: the bank must give you the FEIN at least 10 days before signing at the notary's office, to give you time to read it, compare it, and ask questions if necessary.

Seventh step: signing the deed of sale

Signing the deed ofsale (escritura de compraventa) is the final step in the process of buying property in Spain. 

Practical info

• Signing takes place at the Spanish notary's office.
• Both buyer and seller must be present.
• If the buyer is unable to attend, a lawyer can sign on his behalf by means of a notarized power of attorney.

Contents of the deed 

• Identity of seller and buyer
• Detailed description of the property
• The existence of encumbrances on the property
• Sales price and payment terms

Procedure

1. The notary verifies the identity of the parties and examines the necessary certificates.
2. The buyer must pay the balance of the sale price.
3. The notary reads the deed and the parties sign it.

Payment

• The buyer must bring cashier's checks or make a transfer to the notary's account. This is why we recommended opening a Spanish bank account at the beginning of this guide.

2 - What you need to know about buying property in Spain 

The role of the notary

In the Spanish real estate ecostysem, the role of the notary is very limited. His role is limited to ensuring that the deed of sale complies with the law. 

• The notary certifies the identity of the parties involved in the transaction 
• Register the new owner with the Property Registry(Registro de la Propiedad)
• Collects fees and taxes related to the sale.

The lawyer's role

On the other hand, the lawyer plays a central role in the process of buying property in Spain. He or she is responsible for legal verification, analysis and drafting of key documents, as well as assisting the buyer and managing the administrative procedures involved in the sale. 

Here's what it will do for you: 

• Check for debts, charges or hidden defects
• Verify property (condition, structure, etc.) and seller's identity
• Examine charges, debts and mortgages on the property
• Check that the property complies with land registry and town-planning standards
• Check compliance of energy diagnostics
• Check registers (mortgages, sheltered housing, etc.)
• Monitoring future construction projects
• Obtain a registration certificate issued by the town hall
• Drafting the reservation agreement and sales contract
• Analyze all legal documents related to the transaction
• Check the draft deed
• Translate and clarify documents for non-Spanish-speaking buyers
• Represent the buyer throughout the process, including at the notary's office
• Negotiate contract terms on behalf of the buyer
• Provide legal and tax advice
• Taking care of administrative formalities
• Track payment of taxes and fees
• Register the property with the land registry

Make a power of attorney (poder notarial) with a notary in Spain

In practical terms, what can a power of attorney do for you when investing in property in Spain? 

1. Apply for an NIE.
2. Open a bank account.
3. Sign the compromis or deed of sale in your absence.

Practical info : 

• It is obtained in Spain, directly from a notary.
• In your country, via the local consulate or notary (with apostille and translation)
• You can also set it up directly with Terreta Spain. Your advisor will take care of everything.

3 - The financial aspect of buying property in Spain 

Purchase costs

What costs and taxes are involved in investing in property in Spain? On average, acquisition costs amount to around 11% of the value of the property, excluding consultancy fees. However, these costs can vary from region to region. 

Let's list the three main categories of expenses: 

1. Notary fees 

They represent only around1% of the purchase value.

2. Consulting fees 

Legal fees should be included in the calculation. Most lawyers charge their clients a percentage of the value of the property purchased (between 1 and 2%). Also factor in agency fees.  

3. Taxes

They depend on the nature of the good 

• Older home market

In older homes, the ITP (Impôt sur les Transmissions Patrimoniales) applies. The rate varies considerably from one autonomous community to another. This is a one-off tax payable within 30 working days of purchase. 

• New-build market 

VAT is charged on new properties at a rate of 10%. To this must be added AJD (Tax on Documented Legal Acts): the rate varies according to the Autonomous Community, but is generally between 0.5% and 1.5% of the purchase price of the property. 

4 - Real estate taxation, beyond the purchase

Where you file your tax return depends on your tax residence. If you reside in Spain for more than 183 days a year, or if the center of your economic and/or family activities is located there, you must file your tax return there.

Every homeowner in Spain is subject to three types of tax: 

1. Property taxes (IBI): L'Impuesto Sobre Bienes Inmuebles

This is an annual local tax based on the cadastral value of the property. It applies to all real estate (housing, garages, premises, etc.). The rate varies between 0.4% and 1.3% of the cadastral value.

2. Taxes on rental income of non-residents

IRNR(Impuesto sobre la Renta de No Residentes) is Spain's Non-Resident Income Tax. It applies to :

• People spending less than 183 days a year in Spain ; 
• To those who have their main economic interests outside Spain;
• Owners of real estate in Spain who are not resident in the country.

Tax rates vary according to the taxpayer's country of residence:

• EU residents: 19
• Non-EU residents: 24

Special case: for property owners in Spain:

• Fictitious" taxation on the use of the property for days when it is not rented;
• Tax base: 1.1% or 2% of the property's cadastral value. 

3. Taxes on residents' rental income

For residents, rental income is used to calculate income tax (IRPF), which is progressive and increases according to tax brackets, from 19% to 45%. 

• Progressive tax whose rate changes according to taxable income  
• Takes into account the taxpayer's personal and family circumstances
• Applies throughout Spain, with special provisions for the Canary Islands, Ceuta and Melilla 

4. Impôt sur la fortune, IP (Impuestos sobre el Patrimonio)

It only applies to assets in excess of €700,000 in Spain (€500,000 in Catalonia), and has been abolished in many autonomous communities.  

5. Added value or ganancia patrimonial

Ganancia patrimonial is paid when a profit is made on the sale of a property. 

Practical info 

• In most cases, the seller pays for it
• If the seller is non-resident, the buyer must pay 3% of the capital gain to Spanish tax authorities (to combat tax evasion). The seller pays the remaining 16% within 3 months of the sale. 
• The tax rate varies according to tax residence (19 or 24% for non-residents) and according to the amount of gains for residents (between 19 and 30% since 2025).