One of the world's most popular markets for foreign buyers
The appeal is obvious: the climate, the lifestyle, a relatively strong rental market, and — in many regions — prices that still compare favorably with equivalent properties in northern Europe or major US cities.
Foreigners buy freely here. There are no restrictions on foreign ownership, no limits on the number of properties, and no residency requirement. Whether you're a non-resident buying a holiday home in Valencia or a new resident purchasing your first Spanish home, the legal framework is the same.
That said, the process differs enough from what Americans are used to that understanding the steps — and especially the taxes — before you make an offer really matters. Budget for an extra 10–13% on top of the purchase pricein transaction costs and you won't get caught short at the notary.
What you need before you start
Three things should be in place before you're seriously viewing properties — not after you've found the one you want.
Your NIE number
The Número de Identidad de Extranjeroappears on every deed and tax filing you'll sign. Applying through a US consulate can take 20–30 days, so start early — losing your ideal apartment because your NIE isn't ready is a needless heartbreak. See the NIE Number guide.
A Spanish bank account
You'll need one to pay the deposit, taxes, and final price. Spanish banks must verify the origin of funds — open the account early and be ready to document where your money comes from. Anti-money-laundering rules are taken seriously, especially on larger transactions.
An independent Spanish lawyer
Not optional. A notario authenticates documents — they are not your advisor. You need an abogado working for you: due diligence on debts, mortgages, planning and community charges; contract review; correct registration; and the tax filings after completion. Budget €1,000–2,500.
The purchase process, step by step
Search and offer
You find the property, negotiate, and verbally agree terms. Nothing is binding yet. Before making a serious offer, request a nota simple — a Land Registry (Registro de la Propiedad) report showing who legally owns it, any mortgages or charges, and the legal description. Your lawyer typically pulls this as part of initial checks.
Reservation contract & deposit (arras)
Once you agree a price, you sign an arras agreement locking in the purchase with a deposit — usually 10%. The most common form, arras penitenciales (Article 1454 of the Civil Code), cuts both ways:
A meaningful commitment on both sides — never sign one without your lawyer's review.
Due diligence
Between the arras and completion, your lawyer verifies everything: the nota simple against the physical property, unpaid community fees (cuotas de comunidad), outstanding IBI, the cédula de habitabilidad and energy certificate (both required for sale), any planning or protected-status limits, and that the Catastro description matches.
For older properties especially, what was built and what's officially registered can differ. Fix discrepancies before completion, not after.
The public deed — escritura de compraventa
Sales complete before a notario. Both parties (or authorized representatives) attend in person with valid ID — if you can't be there, a poder notarial (power of attorney) lets a representative sign for you. The notary verifies identity, confirms price and payment, and records any mortgage. The balance (price minus the arras) is paid, usually by transfer or banker's draft.
You receive a copy of the deed; the notary keeps the original. It must then be registered in your name at the Land Registry — until then, the transfer isn't protected against third parties. Your lawyer handles the submission.
Pay the taxes
Purchase taxes are unavoidable and significant, and must be paid within 30 days of signing the escritura — late payment incurs surcharges. Which taxes apply depends on whether the property is new or used, covered next.
The taxes: new vs. used property
The single biggest branch in your cost calculation is whether you're the property's first buyer from a developer, or buying a resale.
IVA + AJD
Plus AJD stamp duty on the deed itself — set by the autonomous community, typically 0.5–1.5%.
ITP + AJD
Some communities apply sliding scales by price. AJD applies too, at the same regional rate where there's a notarial deed.
Location is a financial decision. ITP is set and administered by each autonomous community, so the rate depends entirely on where you buy. Comparing similar properties across regions, the ITP difference alone can be several thousand euros on the same price. Verify the current rate with the consejería de hacienda where the property sits.
Other transaction costs
Beyond the main taxes, budget for the supporting cast. None of these are recoverable.
Total transaction costs, taxes included, typically run 10–13% of the purchase price — whether new (IVA + AJD) or used (ITP + AJD). Budget it up front.
Mortgages for non-residents
Spanish banks lend to non-residents, but on different terms than residents get. The headline difference is how much they'll lend.
Banks want extensive documentation — recent tax returns, proof of income and assets, employment or business financials. For Americans, having this in order (and translated where needed) before approaching a bank saves real time. A mortgage broker (intermediario de crédito inmobiliario) who works with foreign buyers can identify lenders experienced with non-resident applications.
Buying as a non-resident
If you own Spanish property but keep your tax residency elsewhere, there are ongoing obligations — all filed via Form 210, the non-resident income tax return (IRNR).
Imputed income tax — even if you don't rent it
Spain deems you to derive benefit from owning the property, so it taxes a notional income: 1.1% of the valor catastral if that value was revised since Jan 1, 1994, otherwise 2%. That figure is then taxed at 19% for EU/EEA residents and 24% for non-EU non-residents, including US citizens. Filed annually.
If you rent it out
Non-residents pay IRNR on rental income. EU/EEA residents can deduct expenses; non-EU non-residents (including Americans) are taxed on gross rental income at 24% with no deductions under standard rules — a significant distinction.
The 3% withholding — when you buy from a non-resident
When a non-resident sells, the buyer must withhold 3% of the price and pay it to the Agencia Tributaria (Form 211) within one month — it's a payment on account of the seller's capital gains tax. If you're buying from a non-resident, this is yourobligation: fail to withhold and you're personally liable for the amount plus interest and penalties. Your lawyer handles it. The seller then files their own gains return (Form 210) and pays or reclaims the difference; the non-resident gains rate is 19%.
The plus valía municipal
The plus valía municipal — formally the Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana — is a municipal tax on the increase in cadastral landvalue over the seller's period of ownership. The local ayuntamiento (town hall) calculates it from the cadastral value and the number of years owned.
Traditionally the seller pays it— but contracts can stipulate otherwise, and in buyer's markets it's occasionally negotiated. Clarify who pays before you sign the arras, and have your lawyer make it explicit in the contract.
The annual IBI
Once you own, you pay the Impuesto sobre Bienes Inmuebles(IBI) each year — Spain's equivalent of property tax, collected by the local council as a percentage of the cadastral value. Rates vary by municipality.
Check for arrears before completion. Unpaid IBI from previous years is a charge that follows the property, not the previous owner — so it can become yours. Your lawyer confirms it's clear as part of due diligence.
Buying through a company
Some foreign buyers explore holding Spanish property through a company — for estate planning, asset protection, or privacy. This is a genuinely complex area where the analysis depends on your circumstances, the property value, and your residency situation.
Spanish law has specific rules targeting certain structures used to hold property, including an annual Gravamen Especial sobre Bienes Inmuebles de Entidades No Residentesfor non-resident entities. If you're considering a company structure, get specialist advice before purchase — restructuring afterwards is costly. Our Legal & Taxes guide covers the wider tax picture.
Steps and costs at a glance
Sources
Frequently asked questions
Can I buy property in Spain without being a resident?
Do I need to travel to Spain to complete the purchase?
Is a survey required?
Can I get a Spanish mortgage as a US citizen, paid from US income?
What happens to my property tax if I become a Spanish tax resident?
Who pays the plus valía — me or the seller?
This is for informational purposes only and does not constitute legal or tax advice. Property law, tax rates, and transaction procedures in Spain vary by autonomous community and change over time. Before any purchase, engage an independent Spanish property lawyer and verify current tax rates with the relevant regional tax authority.