Buying a House in Spain as a Foreigner: The Complete Step-by-Step Guide

Spain remains one of the most popular countries in the world for international property buyers. Whether you are looking for a holiday home on the sunny Costa del Sol, a rental investment in Barcelona, or a permanent relocation base, the buying process is straightforward. However, as an international buyer, you must navigate specific legal, tax, and financial procedures that differ from those in your home country.

The absolute first step: Securing your NIE number

Before you can open a Spanish bank account, sign a reservation contract, or complete a property purchase, you must obtain a Número de Identificación de Extranjero (NIE). This is your personal foreign identification and tax number in Spain. You can apply for an NIE at a Spanish consulate in your home country, or in Spain through an authorized representative (using power of attorney) or directly at a national police station.

Without an NIE, you cannot register the property in your name or pay the required purchase taxes. We recommend starting this process as early as possible, as appointment slots can be limited. For a complete walkthrough of the application process, read our dedicated NIE number guide.

Understanding the buying process: Reservation, Arras, and Title Deed

Once you find a property you like, the transaction typically follows three main stages:

• Reservation Agreement (Reserva): You pay a small fee (typically €3,000 to €6,000) to take the property off the market. This reserves the home while your lawyer performs initial due diligence.
• Deposit Contract (Contrato de Arras): This is the binding pre-sale agreement. You pay a deposit (typically 10% of the purchase price). Crucially, under Spanish law, if the seller backs out, they must repay you double your deposit. If you back out, you forfeit the funds.
• Public Deed of Sale (Escritura de Compraventa): The final signing takes place before a Spanish Notary Public. The remaining balance is paid, keys are handed over, and the Notary registers the change of ownership.

Taxes and transaction costs to budget for

When buying a house in Spain as a foreigner, you must budget an additional 10% to 13% of the purchase price to cover transaction costs, depending on the region and whether the property is new or resale:

• Property Transfer Tax (ITP): Applies to resale properties. It ranges from 6% to 10% depending on the autonomous community (e.g., 7% in Andalusia).
• Value Added Tax (IVA) & Stamp Duty (AJD): Applies to brand-new builds. IVA is a flat 10% nationally, and AJD is typically 1.2% to 1.5%.
• Notary, Registry, and Legal Fees: Roughly 1% to 2% in total. We strongly advise hiring an independent Spanish lawyer (abogado) to handle the due diligence and protect your interests.

For a detailed breakdown of these purchase costs, see our article on the cost of buying property in Spain.

Securing financing: Non-resident mortgages

Many foreigners choose to finance their purchase through a Spanish bank. Non-residents can typically secure a mortgage of up to 70% of the purchase price or valuation (whichever is lower). This means you must cover the remaining 30% deposit plus the 10% to 13% purchase costs in cash. If you already file taxes in Spain, you may qualify for resident terms with up to 80% LTV. You can check your eligibility details in our guide on non-resident mortgages in Spain.