How to buy property in Spain
Spain is famed for its attractive climate, culture and cuisine. In fact, as well as being a perfect place for a vacation, it’s a very popular expat destination with large communities of foreigners choosing to live, work, study or retire there.
If you’re considering joining them, you need this guide to buying property in Spain. We’ll cover all you need to know, including:
- How do you buy a property in Spain?
- Is buying a property in Spain a good idea?
- How can I find a property to buy in Spain?
- What’s the cost of buying a property in Spain – and how to save?
- How much tax do you pay when buying a house in Spain?
Making a high value purchase in a foreign currency – like buying a property overseas – can be costly and slow. In this article we’ll also talk about providers like Wise and OFX which can help you make cheap, fast and safe international transfers, with fees and rates that often beat the banks.
Can US citizens buy property in Spain?
There are no rules which prevent Americans from buying a property for themselves, to rent out or as an investment in Spain.
However, it’s important to note that US citizens are not able to stay indefinitely in Spain or elsewhere in the EU without applying for a visa. This means that if you’re buying a property to live in and intend to stay for more than 90 days in a 180 day period you’ll need to get permission.
What are the requirements to buy a house in Spain?
The good news is that whether you’re considering city living in Madrid, Barcelona or Valencia, or a coastal retreat in Andalucia, buying a property in Spain is a relatively straightforward process.
Property in Spain can be bought by anyone – broadly without restrictions. You’ll need to have financing in place, and you’ll be asked for standard documents like proof of identity and address. In fact, the only extra thing you’re likely to need to buy a property in Spain as opposed to the US is a NIE number – Número de Identidad de Extranjero. This is a Spanish foreigners identification number you can obtain by visiting your local police station if you’re already in Spain, or the Spanish embassy if you’re still in the US.
|Key point on international transfers|
|When transferring money between the US and Spain, specialist money transfer providers like Wise and OFX can help you save significant amounts of money in transfer fees. For property related purchases this can get into the thousands of pounds. At Exiap we compare providers to help you find the best one for your needs.|
How to buy a home in Spain step by step
Buying a home in Spain is not wildly different to the process in the US. However, navigating a different country’s processes is never straightforward, so having local support and advice is recommended.
Here are the basic steps you’ll need to take to buy a house in Spain:
- Set a budget for buying your new Spanish home, and get a mortgage offer in principal if required
- Decide on the Spanish city or region where you want to buy a property
- Find a local Spanish estate agent and start to view properties
- Select a property lawyer to work with – make sure they’re registered at the local Bar Association – the Colegio de Abogados
- Choose your perfect Spanish property
- Make an offer and enter into negotiations with the seller
- Once you’ve agreed a price, sign the preliminary offer – contrato privado de compraventa
- Pay a 10% deposit
- Your lawyer will complete due diligence checks – you’re also advised to get a survey on the property to check the condition
- Sign the sales contract – escritura de compraventa – in front of a notary
- Pay the remaining purchase costs, taxes and legal fees
Spanish property prices
Overall, Spanish property prices are – on average – lower than the costs of buying a home in the US.
In fact, Numbeo – which aggregates live data submitted by users around the world – estimates that it costs on average 24% more per square foot to buy a US city center apartment compared to a similar place in Spain – and 30% more to get a place outside of the city center.
Of course, Spanish property prices vary widely between regions and property types – we’ll take a look at some of the best places to buy property in Spain next.
Best places to buy property in Spain
The best place to buy property in Spain will depend on how you’ll use it, how much you want to spend, and the lifestyle you’d like to achieve.
If you’re looking for a coastal property in an area with a large and active expat community you might want to consider the regions of Valencia and Andalucia – home to the largest English speaking expat communities in Spain. For a lower cost and a relaxed lifestyle, take a look at Murcia. And of course if you’re headed to Spain to get a taste of city life, you can’t go wrong with Madrid, Barcelona, Valencia or Seville.
As you’d expect, buying a property in a city center location will be pricey – but there are also some great picks for a lower cost property in Spain. More on that coming right up.
|Getting a bank account in Spain|
|Getting a multi currency account can help you easily manage your money and save on fees. You can use the account to receive, hold, and transfer different currencies, as well as to spend on a debit card. Wise and Revolut are some of the most popular providers for multi-currency accounts.|
Cheapest places to buy property in Spain
If you’re looking for a lower cost place in Spain you’ll probably want to avoid the Spanish islands – but despite this it is still possible to find cheap coastal property in Spain if that’s your thing. Each region has its own up and coming locations where the property costs may be below average, so getting a local agent to help you search will pay off.
As a few examples to start your search for cheapest places to buy property in Spain:
- Affordable properties in the Costa Blanca – check out Torrevieja or Santa Pola for great locations which balance the budget
- Some of the cheaper places to buy in Murcia include Sucina and Balsicas – still a short drive from the beach and Mar Menor
- Fancy the Costa del Sol? Affordable locations include Manilva – but there are also bargains to be found even in the well known resort locations if you search
Is buying a house as an investment in Spain a good idea?
Whether investing in Spanish property is right for you depends on what you’re hoping to achieve and how long you’re prepared to leave your money locked away.
It’s important to remember that you’ll likely have to pay 24% tax on rental income if you let out a Spanish property, and there is also a capital gains tax of 24% for non EU citizens which is payable upon selling the property. The Spanish property market has had its ups and downs, which is worth considering if you need liquidity or you’re looking for a low risk investment option.
In all cases, you’ll want to get high quality, professional investment advice to make sure you’re making the right decisions for you.
What’s the property market like in Spain?
We mentioned earlier that the Spanish property market has had its ups and downs. In fact, Spanish property prices fell significantly during the global financial crisis of 2007-2008, with annual decreases in overall house prices a feature until around 2015. However, Spanish house prices did stabilize significantly in the years that followed.
The global pandemic caused a fairly short, sharp dip in overall average prices in the mid-part of 2020. However by the middle of 2021 prices were back to their pre-pandemic levels, and have seen significant growth since.
How much does it cost to buy property in Spain?
Here’s a look at average prices per square foot for some major Spanish cities to help build a picture of the costs of buying property in Spain.
|Spanish city||Price per square foot – city center (USD)||Price per square foot – outside of city center (USD)|
* Data taken from Numbeo.com; correct at time of writing, 27 March 2023
On top of the property cost don’t forget you’ll also need to pay additional fees and taxes at the point of purchase. These can include:
- Property transfer taxes of 6% – 10% of the property value
- Notary fee of 0.03% – 0.45% of the property value
- Registration fee of 0.02% – 18% of the property value
- Estate agent fee of 2.5% – 3% of the property value
Buying a property in Spain can mean paying quite a selection of fees. One other important cost to consider is the fees for sending money from the US to Spain to pay for your new home in euros. Here you can run into extra charges in the form of transfer fees and exchange rate markups.
Specialist international transfer providers offer a fast, secure payment service you can arrange right from your smartphone. Providers like Wise offer an automatic discount on the costs of sending high value international transfers, and a service like OFX can also offer competitive rates with a 24/7 phone support option if you need it.
- Wise: Send money online or from your phone, with low, transparent fees and the Google exchange rate. Wise payments are usually fast or even instant, and high value transfers qualify for lower fees.
- OFX: Make your payment online, in-app or by phone, with no transfer fee and just a small markup added to the exchange rate used to convert your dollars to euros. That can mean you pay less compared to choosing your normal bank.
Financing a property purchase in Spain
There are a few common ways to finance a property purchase in Spain:
- Buy in cash using savings
- Get a Spanish mortgage
- Get a mortgage or loan in the US
- Refinance your US property and use the cash to buy in Spain
Each option has its own advantages and disadvantages. Before you decide how to pay for your new home in Spain you’ll want to research the choices which are available to you, and consider the pros and cons.
Getting professional advice is a good idea. Although you’ll often pay for the service, using a specialist advisor or broker can also mean you cut costs in the end by getting a deal which really suits your needs.
Looking for ways to buy euros in the US? Check our page on How to buy Euro
Pros and Cons of buying property in Spain
Still on the fence about buying a new home in Spain? Here are a few pros and cons to consider:
Pros of buying property in Spain:
- Large English speaking communities in many towns and villages
- Great range of housing options, with lower average prices compared to the US or many other European countries
- Huge selection of property types, and no restrictions on foreign ownership
Cons of buying property in Spain:
- You’ll need a visa or permit if you want to stay permanently
- Taxes can be high, including if you rent your property out
- Some older properties may not have been built to the construction standards you’d expect in the US
Getting a Spanish mortgage
It is possible to get a Spanish mortgage to pay for your property. However, as banks set their own terms and conditions you may need to shop around to find the right mortgage for your needs.
The exact products available for you will depend on the property you’re buying, the value of the loan you need, and the loan to value ratio. It’s common for foreigners and non-residents to require a higher deposit amount compared to Spanish citizens and residents – about 30% is normal.
Other fees may apply – including application charges, early repayment costs and late payment penalties. Make sure you read all the paperwork carefully before you make a final decision on which mortgage to choose.
Need a Euro bank account in Spain? Check our guide on How to Open a Bank Account in Spain
Paying property tax in Spain
When you buy a property in Spain you’ll need to pay some costs at the point of purchase, including a property transfer tax which is likely to be around 6% to 10% of the value of the property. There are then ongoing taxes to consider too, which can vary based on your situation and where in Spain your property is located. These costs include:
- Property ownership tax – impuesto sobre bienes inmuebles or IBI – is set on a regional level and paid annually or by installments, usually around 0.4% – 1.1% of the property value
- Wealth tax – impuesto sobre el patrimonio – paid on the value of your estate including your property. Tax free allowances are in place which vary depending on whether you’re a resident or not
- If you rent your property out you’ll usually have to pay 24% tax on the rental income as a non-EU citizen
Most of your Spanish property taxes can be paid online once you have registered with the local tax authorities wherever you buy your property.
How easy is buying property in Spain for foreigners?
Buying a property in Spain as a foreigner is fairly straightforward. However, it’s important to understand common pitfalls of buying Spanish property before you get started. Some common problems with buying a property in Spain include:
- Underestimating the additional costs and taxes payable at the time of purchase and for maintenance of the property
- Failing to complete due diligence checks – making sure the house has been built legally, can legally be sold, and does not have any debts attached to it, for example
- Buying without a building survey – some older properties in particular may have construction issues which are expensive to fix
- Trying to do everything yourself – Local support and advice can help you navigate the process and make sure everything goes through smoothly
Related: Send money to Spain from the US
How to find a Spanish property
If you’re ready to make your Spanish property dream come true you might be wondering how to get started and find the perfect home in Spain for you. There are a few key options to consider:
- Use Spanish real estate websites which aggregate lots of listings from different agents
- Choose a local estate agent – an inmobiliaria – in the area you want to buy in
- Choose an estate agency which is a specialist in helping expats buy a place in Spain
- Use your own network or word of mouth to find a perfect place
Spanish property websites
Here are a few popular Spanish property websites to get your search started:
- Pisos.com (Spanish only)
- Tucasa.com (Spanish only)
Conclusion: Is it worth buying property in Spain?
Spain is a very popular destination for people who want to buy an international property for themselves or as an investment. With a large expat community, enviable lifestyle and attractive climate, Spain could be the perfect place to consider if you want to live, work, retire or invest abroad.
If you’re ready to take the leap and buy a property in Spain the good news is that the process is relatively straightforward and there are not usually any limits on the type of place you can buy as a foreigner. As part of your planning, check out specialist international money transfer providers such as Wise and OFX, which may be able to help you get a better deal on your USD/EUR currency conversion – so your money goes further.
Ready to get started? You could be living the Spanish dream in next to no time.
FAQs on Buying Property in Spain
Can US citizens buy property in Spain?
Yes. US citizens can buy property in Spain without restrictions. However, you may need a visa or permit to stay in Spain if you’re intending on moving permanently or spending more than 90 days at a time in your new home.
How much deposit do you need to buy a property in Spain?
In most cases a deposit of about 10% – 30% of the property value is required when buying property in Spain. The exact amount may vary based on your mortgage if you have one, the property type and the agreement you make with the seller.
Is Spain a good country to buy property?
Spain is a very popular place for expats to invest in property to live or retire. There are large English speaking communities in many Spanish towns and villages. However, the Spanish real estate market has had its share of ups and downs – so before you decide to buy a property in Spain you’ll need to do your research and weigh up all the pros and cons carefully.