How to buy property in Spain from the UK: your 2023 guide

The dream of owning a home near the sun-kissed Spanish coastline captivates many Brits. Whether considering a full relocation, purchasing a holiday home, or planning to retire under Spain's sunny skies, making well-informed decisions is essential.

This article gives you the information you need to make the right choice. So, if you're from the UK and interested in buying a property in Spain, keep reading to learn how to make your dream come true.

Is it a good time to buy a property in Spain?

Many opportunities on the market make it a good time to invest in a property in Spain. 

The quality of life, climate, and the Spanish coastlines draw more foreign homebuyers than ever. Data from the Association of Registrars show that in mid-2022, foreigners bought a record 26,728 homes, making up nearly 16% of all recorded property transactions.

Among these, the majority are British citizens. It is not surprising considering that, in addition to a high quality of life, the prices per square meter in the UK are 39% higher than in Spain.

How much does it cost to buy a property in Spain?

The average house price in Spain is 1,659 GPB per square foot. 

In 2023, the property market in Spain is on a steady upward trend, registering a 7.3% growth from the previous year.

Cost of living in Spain compared to the UK

Living in Spain is 38.2% cheaper than in the UK. Maintaining the same standard of living costs an average person around 3,000 GBP per month in Madrid, compared to 5,700 GBP in London.

To give you an idea of the price differences, here are a few examples:

• restaurant prices are 31.6% lower than in the UK
• groceries prices in Spain are 16.9% lower than in the UK
• rent prices are 32.8% lower than in the UK
• the price per square meter for an apartment in the city center of Barcelona can be up to 68% cheaper than in London

After all, the cost of living depends on your lifestyle. The larger cities like Madrid, Barcelona, and Valencia are pricier than the provincial areas. The large number of tourists makes a significant contribution to this aspect.

How easy is it to buy a property in Spain after Brexit?

The process and the costs are the same as before, even though the UK is no longer part of the EU. In fact, any foreigner can buy a property in Spain without being a resident.

Remember that you must have a Spanish tax number - Número de Identidad de Extranjero (NIE) to buy a property or get a mortgage in Spain. 

How to apply for the NIE number in the UK

To apply for the NIE at the Consular Office in the UK, you need to submit the following documentation:

1. A completed EX-15 standard application form (you must provide details about the economic, professional, or social reasons justifying the NIE application)
2. Documentary evidence supporting the need for obtaining the NIE
3. The original valid passport of the applicant, along with a copy of the bio data page

You can request the NIE Spanish Number at one of the Spanish Consulates in the UK (London, Manchester, and Edinburgh). 

The usual timeframe for issuing the NIE is 3 weeks, but it may take longer in exceptional situations. 

What steps should you take to buy a property in Spain from the UK?

Buying a property in Spain from the UK can be challenging. The process involves several steps that you need to take to realize your dream of owning a property in Spain. 

#1. Get the NIE Number 

The Foreigner Identity Number serves as your identification for legal and financial transactions in Spain. As mentioned earlier, it's one of the requirements to buy property in Spain.

#2. Open a bank account

It's necessary for managing financial transactions related to your property purchase (funds, bills, and mortgage-related matters). Learn about the requirements of a Spanish bank account, compare costs, and explore accounts for non-residents.

#3. Negotiation of price

Once you have found a property that meets your requirements, negotiating the price with the seller is the next step. 

#4. Look for a mortgage

If you require a mortgage to finance your property purchase, it’s essential to start researching and comparing the best mortgage options for UK buyers. 

Homevest is a solution through which you can compare and understand the Spanish mortgage offers.

It’s a digital solution that helps you make an informed decision about the mortgage that best suits your financial situation. 

#5. Sign the reservation contract

A reservation contract (contrato de reserva) ensures that the property is taken off the market and reserved for you during the remaining purchase process.

#6. Deposit Agreement

A deposit agreement (contrato de arras) solidifies your commitment to the purchase. It outlines the terms and conditions, including the amount of the deposit. The total loan amount the bank offers will depend on the official valuation of the property.

#7. Official evaluation of your mortgage

The valuation report will influence the bank's decision regarding the loan amount.

#8. Prepare the required documents

Several essential documents are needed to complete the property purchase. These include the nota simple (property report), which can be obtained from any registry office in Spain, the ITE (inspección técnica de edificios) confirming the structural integrity of the building or house, and the property deed (escritura pública).

#9. Sign the title deeds at the notary

This step marks the official completion of the sale deed.

#10. Register the property

After signing the sale deed, you must register the house in the property registry. This step legally establishes you as the owner of the property. Additionally, you will be required to pay the property transfer tax as part of the registration process.

How easy is getting a mortgage in Spain from the UK?

Getting a mortgage in Spain as a UK citizen can be relatively straightforward. 

However, it’s important to note that the process depends on your financial situation and the bank’s rules. Lenders assess each case individually so that the interest rates may vary from one case to another. 

Best Spanish mortgage options for UK citizens

Several Spanish banks, including Sabadell, Santander, Caixa, and Bankinter offer mortgages for individuals earning their income in GBP. 

Analyze the bank offers before deciding what is best for your financial situation. 

Sabadell mortgage stands out as a worthy consideration due to its highly flexible terms, providing a wide range of options spanning from 3 to 25 years. With a variable interest rate of 1.2% + Euribor 6m, it offers competitive terms. The minimum loan amount is set at 100,000 EUR.

Santander's Mundo Mortgage presents another suitable option worth exploring. The bank provides a broad range of options for UK citizens seeking to buy a holiday home in Spain. The variable rate offered is 1.85% + Euribor 12m, and the term range varies between 1 and 20 years. 

Caixa mortgage is also an excellent option for UK citizens. The scheme's wide acceptance of high loan amounts, and an extended term range of 5-20 years, accommodate various financial situations.

Read on to discover the best Spanish banks for mortgages for UK citizens and learn how to compare them quickly and without fees.

Eligibility criteria for UK citizens

When applying for a mortgage, there are several important factors that lenders consider to assess your eligibility:

• income stability
• employment consistency
• credit score
• residency status
• debt-to-income ratio (DTI)
• down payment capacity
• the type and value of the property 

Lenders assess your repayment capacity by analyzing your income streams and stable employment. They determine your creditworthiness by evaluating your credit score. 

Documentation required for UK citizens

The documents you will need to provide to secure a mortgage in Spain include:

1. Passport and NIE
2. Proof of income: employment contracts, pay slips, tax forms (P60)
3. Bank statements
4. Credit report
5. Proof of the main residence
6. Proof of deposit

If you have already chosen the property, keep in mind that banks will require the following documents to assess the risk before providing you with a final binding offer:

1. Simple note (the property report) 
2. Pre-contract
3. Valuation report 
4. Appraisal for the property 

The good news is that if these documents are already in English, most banks do not require them to be translated or legalized. 

Homevest can help you in the process of buying a property in Spain from the UK

Consider Homevest as your solution for boosting your property budget and simplifying obtaining a mortgage in Spain from the UK.

Homevest is a digital platform that simplifies applying for and receiving mortgage offers from local banks.

Experience the benefits of Homevest for an easier and more convenient experience in obtaining mortgage offers from Spanish banks:

• Save valuable time by using the Homevest mortgage comparison tool to evaluate the associated costs of each available option
• Effortlessly manage your cross-border home-buying journey by consolidating all your application documents in one secure location
• Retain full control over your application process through your personal Homevest account

This service is designed with your best interests in mind. 

There are no charges for processing your documents, and Homevest only receives a commission from the bank upon the successful completion of a mortgage. While this commission may vary depending on the lender, it's important to note that this fee is not added to your loan amount.

What are the costs of buying a property in Spain?

The taxes involved in buying a property in Spain vary based on the property's location and whether it is a new development or a resale from an individual.

Outlined below are the estimated costs associated with acquiring a mortgage in Spain:

• Transfer taxes: 6-10% of the purchase price for second-hand properties
• Value Added Tax (VAT): approximately 10% of the purchase price (applies to new properties)
• Stamp duty (AJD): 0.5-2% of the purchase price (applies to new properties)
• Notary fee: 700 EUR 
• Registration fee: 350 EUR 
• Property appraisal: 300-600 EUR

Keep in mind that these figures are an estimation and can vary depending on the specific circumstances of the property purchase in Spain. 

Buying a property involves more than just the sale price. A long list of fees and property taxes can quickly add up. Continue reading to understand the taxes and costs of buying property in Spain.

Frequently asked questions

Can I buy a property in Spain to rent out?

Yes, you can rent out the property you buy in Spain. However, you need to pay a 24% non-resident income tax (Impuesto sobre la Renta de No Residentes - IRNR) on your rental income.

The tax rate increased after Brexit, and you should know that you won’t be able to deduct rental expenses.

When planning to buy to let in Spain, it's essential to meet all legal requirements, and obtain necessary permits and registrations. Continue reading to learn everything you need to know before making an informed decision.

Can I retire in Spain from the UK?

Yes, retiring in Spain is possible. 

There are specific requirements you must fulfill. For instance, you need to obtain a valid residence permit to move here and provide evidence that you have enough funds to support yourself during your retirement.

Can I get Spanish residency by buying a property in Spain?

Yes, it is possible to obtain a Golden Visa in Spain, valid for 3 years, by buying a property valued at over 500.000 EUR. 

It’s worth mentioning that the investment does not necessarily have to come from a single source. You can purchase multiple properties whose combined value meets the residency requirement. Read on for more information and see what you need to do to qualify for residency in Spain by buying property.

Can I get a mortgage in Spain if I already have one in the UK?

Yes, getting a mortgage in Spain is possible even if you already have one in the UK.

Keep in mind that your debt needs to remain below 30-35% of your income. 

The good news is that non-resident buyers in Spain enjoy the same mortgage terms as Spanish residents. This means you can secure up to 80% coverage for your primary residence and 60-70% for a second home.

Sources used and checked on July 2023:

1. Home purchasing in Spain by foreigners
2. Property prices comparison between UK and Spain
3. House prices in Spain
4. Cost of living comparison between London and Madrid
5. Cost of living comparison between London and Barcelona
6. Embassy of Spain in the UK
7. The process of purchasing a property in Spain as an expat
8. Non-resident income tax
9. How long can UK citizens stay in Spain
10. Golden Visa in 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.