Can a foreigner buy a house in Madrid? Here’s what you need to know in 2025

Even though it's not the most visited city in the country, Madrid is considered the most authentic Spanish city for its history, food, art, and wines. If you're thinking about buying property in Madrid, you'll find that, despite lacking access to the Mediterranean, the city compensates by being one of Europe's greenest cities.

The cost of living in Madrid is more affordable than in other European cities like London, Paris, or Amsterdam, and this affordability extends to property prices. It's no wonder Madrid is one of Spain's top cities for foreign buyers.

Why's that?

• It's well-connected with direct flights in Europe and around the world
• The healthcare system is ranked among the best in the world and adds value to the city's living standards
• The relaxed Spanish lifestyle teaches you to slow down and enjoy some siesta time
• Life is always good with tapas - delicious food to be shared and savored during conversations

Ready to learn more? This guide covers what you need to know about buying a property in Madrid as a foreigner.

What's the property market like when buying property in Madrid?

Madrid, known for its international business and tourism, maintains a constant demand for homes and commercial spaces.

As of October 2024, the average price for residential properties was €5,113 per square meter, marking an 24.68% rise from December 2023's €4,101 per square meter.

"Madrid still offers properties at more affordable prices in areas with high demand. Although most of these properties need updates and renovations, this represents the value one can add. The best part is that the demand for rental properties is at an all-time high, with so many people looking for a European lifestyle. Madrid might be the best option among them all", says Oana Buda, a real estate personal shopper in Madrid."

Best place to buy property in Madrid

There are over 20 districts to choose from—some are more expensive than others, some closer to the parks or museums. The city center, for instance, is ideal for those seeking convenient transport, job options, and a vibrant expat community.

Salamanca: Madrid's premium area

Average price per m2: €8,180

As one of the city's safest neighborhoods, Salamanca has the highest property prices and attracts affluent residents. The area is renowned for its elegant apartments and townhouses, many housed within historic buildings.

Chamberi: residential atmosphere near the center

Average price per m2: €7,435

Despite its central location, Chamberi is a top choice for its safety, educational institutions, and serene ambiance. This neighborhood is popular with professionals, families, and retirees, offering modern to historic properties.

Villaverde: more budget-friendly options

Average price per m2: €2,133

Villaverde is a neighborhood known for its affordable prices due to its industrial history and location, which makes it less connected to the city center.

However, its appeal is growing, fueled by new developments and improved transportation links. The neighborhood predominantly features apartments, ranging from older buildings to new constructions.

Retiro: known for peacefulness and greenery

Average price per m2: €6,981

Retiro is the best neighborhood for those with mid and high-range incomes who want to live close to the city and have easy access to the park.

Known for housing one of the city's largest parks, along with numerous galleries and museums, Retiro is in high demand for its spacious apartments and homes.

What are the costs of buying a property in Madrid?

Taxes in Madrid are closely related to the district and the type of property you choose, depending on whether the property is new or a resale.

Let's assume you have found a 116 m2 second-hand penthouse in Salamanca, valued at €445,000.

To understand the fees for a new property, suppose you have found an 88 m2 apartment in the Villaverde district worth €223,000.

In this case, you will have to pay an additional €25,841:

Is it easy to get a mortgage in Spain as a foreigner?

Foreigners can secure a mortgage in Spain , but the process might be more complex and potentially more expensive than that of residents. 

Banks are reluctant to issue loans smaller than 100,000 EUR, so obtaining financing for a lesser amount is difficult.

Mortgage options

Banca March, Sabadell, UCI, Bankinter, Unicaja, and Santander are among the top Spanish banks ready to provide financing to international buyers as long as they have a good financial profile.

Learn about the best Spanish mortgage solutions for non-residents, understand their pros and cons, and discover how to select the option that suits your needs.

Eligibility criteria

The currency of your income and the deposit are very important to Spanish lenders. You must provide at least a 30% down payment and cover taxes and fees. 

Your debt-to-income ratio should not surpass 40%, meaning you won't qualify for a mortgage if you have higher levels of existing debt.

Documentation

Besides the general documentation requested by banks to mitigate their risks, such as proof of income or credit reports, having a NIE, the tax number in Spain, is mandatory.

Fortunately, banks are open to accepting documentation in English, without the need for translation into the local language. Continue reading to familiarize yourself with the documents required for a mortgage in Spain.

How Homevest can help you secure the best deal for your property in Madrid

Buying a property in Madrid with foreign income can be complex and sometimes discouraging. Luckily there are ways to navigate these challenges. Homevest is a solution that offers a digital platform to simplify the mortgage application process for non-residents. 

Functioning like a project management tool, it assists applicants in sourcing the necessary documents for bank review. This ensures that all required paperwork is easily accessible in one centralized location for the bank, the broker, and the client.

Homevest works to make banks compete for your case, ensuring you get the best mortgage terms. 

Despite taking three months to complete, with a slight delay in the final on-site signing in Spain, Sandra obtained mortgage financing from Sabadell. The loan came with a competitive interest rate of 1.8% first year, followed by 1,2% + EURIBOR, without any extra commissions or early repayment clauses.

Explore Sandra's journey of buying a property from France to Spain and discover how Homevest provided her with options and support, leading to a successful outcome.

Frequently asked questions

Is buying property in Madrid a good investment?

Oana Buda, a real estate personal shopper, says the answer to this question always depends on your expectations, budget, and strategy.

"As you can see from the variety of prices and neighborhoods, Madrid has something to offer everyone. In the luxury market, you can find spectacular apartments and houses in beautiful settings. As an investor, you can add value by renovating, reselling, or renting at top market prices while holding for the constantly growing real estate market. This segment has been growing exponentially over the past few years, with significant overseas capital making its way to Spain".

How long can I stay in Spain if I own a property?

If you're an EU citizen, you face no restrictions on your stay, unlike non-EU citizens, who can only stay for a maximum period of 90 days without a visa.

Should I use a mortgage broker to buy property in Spain?

A mortgage broker can speed things up because they know the market and understand how banks and local rules work. They'll guide you through the process to make sure your mortgage gets sorted on time.

There are many mortgage brokers who help non-residents. When picking one, consider their experience, the banks they work with, the quality of their service, and the rates and fees they charge.

Buying a property is a big step, and it can become overwhelming in another country where you don't know the local regulations or even the language.

The good news is that buying a property in Madrid can be straightforward, even if you're buying from abroad, as long as you source the right help and gather all the necessary information to make the right decision.

Sources used for this article in January 2025:

1. Sale cost calculator
2. Housing price in Madrid, Spain

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.