Buying property in Spain as a foreigner. A step-by-step guide

Spain is your dream place if you’re looking for a warm climate, delicious food, and a high standard of life. Whether you’re considering working in Madrid or Barcelona or retiring to Alicante or Palma de Mallorca, you will need to find a property that suits your needs. 

Keep reading a guide that covers everything you need to know when buying a property in Spain as a foreigner. 

How easy is it to buy a property in Spain as a foreigner?

Any foreigner can buy a property in Spain without being a resident. 

However, mortgage conditions differ for foreigners and can be more complicated. It is necessary to demonstrate eligibility and provide evidence of declared income.

It’s essential to have a foreigner’s identity number (NIE) to buy a property in Spain. The document can be easily obtained, especially if you are from an EU country. Getting it might take a few weeks if you are from the UK. 

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

The price you’ll pay for buying a property will be influenced significantly by your desired location. The most expensive properties in the country are in Barcelona, but if you’re interested in the coastal regions as well, you can find more varied prices. 

If you decide to buy a property in Spain, bear in mind that the price per square meter might differ significantly depending on the location: 

Where is the best place to buy a property in Spain?

The best place to buy a property in Spain in 2023 depends on personal preferences and specific requirements. 

Spain offers various desirable locations, each with unique charm and advantages. Popular options include Barcelona, Madrid, Costa del Sol, and the Balearic Islands. 

For instance, Valencia and Alicante are popular destinations for British citizens interested in buying a holiday home in Spain. 

Barcelona

Property prices in Barcelona are among the highest in Spain, but at the same time, the cost per m2 for an apartment can be up to 200% cheaper than in London, depending on its location inside or outside the city center.

The city is home to many expats, making the purchase of an apartment in Barcelona a potentially good investment, especially for rental purposes.

Madrid

Buying a house in Madrid might be suitable for you if it aligns with your financial capabilities and way of life. As of July 2023, Madrid's average cost per m2 reached a two-year high of 3,938 EUR.

Mallorca

Mallorca is a great place to buy a property, whether looking for a peaceful retreat or a fresh start. Many locals speak English, German, and French. Plus, getting a mortgage here is just like in the rest of Spain.

Tenerife

Buying a property in Tenerife can be cheaper than in cities like Madrid or Barcelona. With its popular beaches and attractions, there's a good opportunity for rental income.

However, consider that buying property in Tenerife can become complex due to legal considerations, language barriers, financing challenges, and various taxes and fees.

What steps do I need to take for a mortgage in Spain with foreign income?

If you're a foreigner looking to buy property in Spain, you may need to obtain a mortgage loan with foreign income. This process can be challenging, but with careful planning and research, you can secure the financing you need to realize your dream of owning a home in Spain.

1. Calculate your budget

The first step is to calculate your budget to determine how much deposit you can bring and how much you need to borrow. 

Keep in mind that Spanish banks cover up to 70% of the purchase price or value of the property. This means you’ll need to pay at least 30% of the property’s value in cash as a down payment.

2. Check banks offering international mortgage loans

It's important to note that not all banks in Spain offer foreign mortgage loans. Be sure to research your options and find the banks that offer mortgages to foreigners with income from abroad. Check their eligibility conditions and the documents you’ll need to provide to qualify for a loan. 

Homevest can help you compare offers from top Spanish banks to find the best interest rates and loan terms for your situation.

3. Obtain preapproval and offers

After finding suitable banks, contact them to obtain preapproval and offers. This step will give you an idea of your monthly payments and help narrow your property search. Take the time to carefully review the terms and conditions of each offer before making a decision.

4. Find the right property

Once you have preapproval and offers, start looking for the right property. Searching for properties that fit your budget and meet your requirements can be time-consuming. You should also be prepared to negotiate with sellers to get the best deal possible.

5. Buy the property and pay the monthly loan

After agreeing on a price, buy the property and begin paying your monthly mortgage loan. The loan period can range from 5 to 30 years, depending on the amount borrowed.

The mortgage loan process in Spain may differ from your home country, so it’s essential to research and work with professionals who can guide you through the process.

What documents are required to apply for a mortgage in Spain from abroad?

When buying a property and getting a mortgage in Spain, you’ll need the following documents:

• Copy of Spanish National identity card or passport
• NIE number (Número de Identidad de Extranjero) 
• Payslips (usually for the last 3 months)
• Annual tax payments and deductions (P60 Form in the UK) 
  • Last 3 years for sole traders
• Last year's tax return
• Proof of the primary residence 
  • For homeowners: Land Registry title
  • For renters: Lease Agreement
• Employment contract (with all annexes)
• Bank statements (usually from the last 6 months)
• Savings and investments statements (to prove the origin of the deposit)
• Credit report

In certain situations, banks may ask for additional documents to determine an applicant's eligibility, which is done on a case-by-case basis. Keep reading to discover the documents checklist for a non-resident to apply for a Spanish mortgage.

How to obtain the NIE number to buy a property in Spain

The "Número de Identidad de Extranjero" (NIE) is an all-purpose ID and tax number in Spain required to buy a property and get a mortgage.

When living abroad, you can apply for the NIE number:

1. In-person: in Spain or via a Spanish Consulate abroad
2. Through a representative in Spain 

The required documents when applying for the NIE number are:

• Original and one copy of the Ex-15 application form filled out and signed (the form must indicate the economic, professional, or social reasons that justify the NIE application)
• An original document (and extra copy) that explains the reason for applying for an NIE number (a purchase contract for a property, or a mortgage application)
• Passport and a photocopy of the main page of your passport (the page with name, photo)

It’s worth mentioning that the NIE is usually issued within two weeks, but in exceptional situations, it may take longer. The document is sent to the applicant by email. 

We recommend contacting your local consulate to check the latest guidelines regarding applying for the NIE, as processes and instructions may change over time.

What are the best Spanish mortgages for foreigners?

Sabadell, Cajasur, Unicaja, Bankinter, BBVA, Santander, Caixa, and UCI are among the banks from Spain that offer mortgages for those who earn income from abroad.

For married couples, it's usually better to apply together with most Spanish banks. Since marriages often involve shared finances, this can help in the application process. 

Continue reading to understand the specifics when applying for a Spanish mortgage with a co-applicant and learn about the conditions you must meet to be eligible for financing.

Sabadell Mortgages

Sabadell Bank is one of Spain's most competitive mortgage lenders, serving a wide set of non-resident applicants. If you want to move forward with Sabadell, you should know the minimum property purchase for non-residents is 150,000 EUR. The lowest rate is 4%, including Euribor 12m, and the term range varies between 3 and 25 years. 

Cajasur Mortgages

If you’re interested in buying a house in the Costa del Sol and Andalusia areas, a great option would be a mortgage from Cajasur. You can borrow between 80.000 and 1.000.000 EUR at a lower rate of 4,38%. However, depending on the customer profile, you should know there is a 0-1.5% opening fee. 

Unicaja Mortgages

Unicaja Banco is a flexible Spanish lender with a wide offering for non-residents. You can access a mortgage with a lower rate of 4,60%.

After the bank approves your application, they will open an account at Unicaja Banco to directly debit the repayments and sign the mortgage at the notary's office of your choice.

Santander Mortgages

Santander's Mundo Mortgage for non-residents provides a broad range of options for individuals seeking to purchase a second home in Spain, with loan amounts ranging from 100,000 to 1,000,000 EUR and both fixed and variable rates.

The lowest rate is 5,82%, including Euribor 12m, and the term range varies between 1 and 20 years. 

Bankinter Mortgages

Bankinter is one of the best options for applicants from the US and UAE. You have access to a choice of a fixed-rate or a variable-rate mortgage. 

If you prefer to pay a fixed monthly amount, you can choose the same interest rate and installment for the entire mortgage term. If you want to adapt to the market situation, you can have a Euribor-indexed variable interest rate, to which Bankinter adds a fixed spread. 

BBVA Mortgages

BBVA's mortgage solutions for non-residents provide both fixed and variable-rate options, with repayment terms extending to 30 years, easing financial strain with manageable installments. 

The loan amount offered ranges from 100,000 to 2,000,000 EUR, accommodating various financial needs and welcoming applicants from various nationalities and residency countries. However, BBVA's services are restricted to those earning Euros and applying from overseas.

Caixa Mortgages

CaixaBank Holabank mortgage scheme is tailored for non-residents seeking to invest in the Spanish real estate market, offering two types of mortgages: a fixed rate for up to 20 years with a bonus at a rate of 3.35% and without bonus at a rate of 4.35%. 

The scheme's wide acceptance of multiple currencies, high loan amounts, and an extended term range of 5-20 years to various financial situations. 

UCI Mortgages

If you’re searching for a flexible non-resident lender offering mortgage options for new-builds and fixer-uppers, including financing for renovation, UCI is your answer. The minimum property purchase for non-residents is 150.000 EUR, while the minimum mortgage is 60.000 EUR. 

Continue reading to learn more about the best Spanish mortgages for non-residents and how to compare the offers quickly and fee-free.

What are the current mortgage rates in Spain?

Caixabank, Sabadell, and Unicaja are among the banks that offer the most competitive interest rates for mortgages. There is a big variance between the highest and lowest offer from the same bank, which shows that it’s often worth it to negotiate with them.

Keep reading to see the mortgage rates for non-residents from August and find out which deals were the best, so you can make the most appropriate decision.

Is there a way to simplify accessing a Spanish mortgage from abroad?

If you’re looking for a solution to save time and money, Homevest might be an alternative worth considering.

Homevest offers a digital platform that simplifies the mortgage application process for non-residents interested in buying a property in Spain. It’s a service free of charge that can help you save more than with other mortgage brokers.

By submitting your mortgage documents a single time through this service, you gain access to top banks in Spain, including CaixaBank, Sabadell, Santander, and Unicaja.

You can compare mortgage offers from the best Spanish banks and choose what’s best for your financial situation.

Homevest can be a reliable support that accelerates the process of buying a property in Spain directly from abroad.

What taxes and fees will I need to pay when buying a property in Spain?

The costs of buying a property in Spain depend on several factors, such as the location or whether you are buying a new property from a developer or a resale property from an individual. 

You should keep in mind that buyers pay the majority of the costs, usually involving:

It’s worth mentioning the property price would be the most significant expense that you will incur when buying a property in Spain, outside of the purchase price. 

Buying a new property will usually be split into VAT (IVA) and purchase tax (AJD). For example, if you buy a new property in Andalusia for 100,000 EUR, then you will pay VAT of 10% and purchase tax of 1.5%.  

Also, don’t forget the seller usually pays the estate agent fees in Spain, typically around 3% of the price.

Understanding the taxes associated with buying a property in Spain is crucial for non-residents. Read on to learn more.

Buying property in Spain after Brexit

Even though the UK is no longer part of the EU, British expats still have the right to buy property in Spain. You don’t have to worry since the cost of buying a property in Spain is the same whether you are a Spanish national, a British, or an American citizen. 

When applying for a mortgage in Spain as a UK citizen, you should expect the following requirements:

• minimum 30% contribution as a deposit towards the property price
• maximum mortgage repayment of 30 years
• minimum property value of 100,000 EUR
• the property or the land can not be in a rustic area (Suelo Rústico) as it is considered “non-residential” land and thus not within the municipalities approved development plan
• choosing between fixed, mixed, or variable interest rates

Continue reading to learn about the process, requirements, and valuable tips for making an informed decision when buying a property in Spain from the UK.

Frequently asked questions

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

Buying a property in Spain is a great idea for investment purposes. 

Foreigners, including British, Germans, French, Romanians, Belgians, Italians, and Dutch, accounted for a significant 14.6% of property purchases in 2022. Even if you don't plan to permanently reside in Spain, renting out the property can still provide a worthwhile investment opportunity. 

Can a US citizen buy a property in Spain?

There are no restrictions for US citizens when it comes to buying property in Spain.

Buying a property is a big deal, and navigating the system in a new country can be challenging. Fortunately, buying your dream house in Spain is easier with Homevest’s help. Keep reading to discover all your answers when buying a house in Spain as an American.

Sources used and checked on September 2023:

1. Property prices Madrid versus Barcelona
2. Property prices Valencia
3. Property prices Alicante
4. Property prices Palma de Mallorca
5. Foreigner Identity Number (NIE)
6. Sabadell Mortgages
7. Unicaja Mortgages
8. Bankinter Mortgages
9. The cost of buying a property in Spain
10. Home purchases by foreigners in 2022

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.