Frequently asked questions
about real estate in Spain

If you are British you can buy your house in the Balearic Islands from the UK without any problem. The fact that you belong to a state outside the European Union only affects the prior obtaining of the NIE to make the sale and purchase of the property. (see guide to buying and selling in Mallorca and Ibiza).

To buy a house, you simply choose the property you like, obtain a NIE, open a bank account, if applicable, arrange a mortgage and sign the mortgage and the purchase.

Yes, and without any problems to buy it.

The nationality of the buyer has no influence whatsoever on his ability to buy a property in the country.

To buy a house in Spain you only need to be identified with a NIE. The rest of the paperwork can be done by yourself or through a power of attorney, and a person who represents you in all the paperwork in your name.

Of course, in the same way as a Spanish citizen or a citizen of a Member State of the European Union.

The nationality of the buyer is not a fact that conditions the sale.

In this way, any foreigner can buy a house in Spain. However, there is only one difference as a previous step: obtaining a NIE.

What is a NIE? It is the basic identification number that all foreigners must obtain once they enter the country.

After obtaining your NIE, you will of course be able to buy a property in Spain like any other citizen, whether European or specifically Spanish.

To buy a house with a mortgage in Spain, you should be aware that as a non-resident you will have certain differences from a Spanish resident.

Firstly, non-residents will pay more because the interest rate is of a higher value than an interest rate granted to a Spanish resident.

In addition, a non-resident will have less financing for the property, generally 60% of the total amount, as opposed to the 70-8% that Spanish residents enjoy.

Generally, mortgages granted to non-residents are fixed rate mortgages, but it is true that variable rate mortgages are becoming increasingly common. In both cases, depending on the bank, a credit rating certificate from the country of origin will be requested as additional documentation.

As far as taxes are concerned, this depends on the buyer’s country of residence. Wherever he usually lives, he will be considered a tax resident.

You should buy a house in Spain because thanks to its real estate development and its quality of life, there is a perfect synergy between supply and demand, and not only that, but its value increases year after year.

In our post about the profitability of buying in the Balearic Islands, we talked about how a property in the Balearic Islands is a safe investment value, as every year its value increases, even in the year of the pandemic as we have already observed.

The costs associated with a purchase are usually 10 to 15% of the value of the property, in the form of taxes and additional expenses.

What are the taxes to be paid in Spain?

1. VAT (Value Added Tax) or ITP (Property Transfer Tax)

If you are buying a new home, the VAT to be paid is 10% if it is a permanent residence and 21% if it is a commercial property.

A new building is one that is acquired directly from the developer and there has been no previous buyer.

Otherwise, the act is not subject to VAT, but to ITP.

This tax is paid at the time of signing the deed of sale and the seller transfers it to the Tax Agency.

On the other hand, ITP, as we have said, will be the tax to be paid in the case of the acquisition of a property that is not a new construction.

The ITP, like the AJD that we will discuss later, is a tax that each Autonomous Community determines its value, which can be from 6% to 11.5%, distinguishing also if the property is to be used as a main residence or not. If it is a main residence, the ITP would have a tax reduction.

For example, in the Balearic Islands, the ITP is from 8 to 11.5%, but if it is for a habitual residence, it is reduced to 5%.

2. Stamp Duty Tax (AJD)

The stamp duty is a tax that is also levied on the property, and its calculation depends on the area in which the property is purchased. It can range from 0.5% to 1.5%. In the Balearic Islands it is 1.2% for this year 2022.

However, you can enjoy several reductions in the tax rate if you fall into one of the following two groups:

• You are under 35 years old and the property you want to buy will cost less than 130.000 €.
• You have an officially recognised disability and the property costs up to €180,000.

What costs do I have to pay?

3. Notary fees

You will be required to go to and use the services of a notary during this legal process of buying and selling.

This is because the notary is the one who will draw up the public deed and this generates notary fees which will depend on:

• The agreed sale price of the property
• Whether there are any mortgages behind the purchase
• The number of pages/sections in the contract
• The number of parties involved in the transaction
• Property registration fee

4. Property registration fee

Once you finally pay for the sale price, you will have to register it at the Land Registry, which is between 1% and 2%.

This also refers to the nota simple de registro, which is necessary to verify the status of the property. It will be essential to collect relevant data about the property and the previous owner. Why? Because it is the opportunity to detect if the property has hidden defects.

5. Change of utilities

One of the last steps in the process will be to receive ownership of the utilities (gas, water, electricity, etc.) from the previous owner.

6. Legal advice

Yes, in the whole procedure there are numerous legal documents that require the supervision of a lawyer, especially when you are a foreigner.

Generally, the lawyer’s fees range from 0.5 to 1.5% of the value of the property.

7. Real estate agent

The seller will pay the agent’s commission (from 2 to 15% in Spain). It can be agreed that this cost will be assumed by the buyer and deducted from the final sale price.

It is recommended to buy a house in Spain wherever there is coastline. The main reason is that not only is there a lot of supply, but also that it will be a profitable value that will only bring you benefits: renting it to other people for housing or, if not, also renting it out for holidays.

Having a property in Spain is a sure value, both if you want it for yourself and if you want to make it profitable, because of its quality of life and because it is a value that increases year after year.

Yes, absolutely.

There is only one difference with respect to a Spanish citizen: obtaining a NIE.

Obtaining a Tax Identification Number is only for the purpose of having a tax identification number in Spain.

Otherwise, the whole procedure will be the same, as if you were a Spaniard.

It should be borne in mind that, depending on where you live, the time it takes to obtain the NIE can vary from 10 days to 2 months. Therefore, we recommend that, as soon as you decide to buy a house, the first step is to obtain a NIE, in order to be able to operate without any problems in Spain, either from Spain or from your usual place of residence.

All other procedures can be carried out by you personally, or through a person who is in Spain as a proxy, i.e. who represents you in Spain.