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. 

Many expats have settled in Spain or invested in a holiday home there. You must know how the process works if you’re considering doing the same. 

Keep reading a guide that covers everything you need to know when buying a property in Spain as a foreigner. Don't let complicated financing hold you back, unlock new opportunities with Homevest, a trusted alternative service simplifying cross-border mortgages.
 

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. 

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 Madrid, but if you’re interested in the coastal regions as well, you can find more varied prices. 

What steps do I need to take for a mortgage loan 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. Once you have a clear idea of your budget, you can start exploring your options for mortgage loans.

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. 

You may want to compare offers from several banks to find your situation’s best interest rates and loan terms.
 

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.

If you are a Spanish expat interested in buying a house back home, check out how to get a mortgage in Spain from abroad. 

 

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.

How to obtain a 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, and Hipotecas are among the banks from Spain that offer mortgages for those who earn income from abroad.

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 variable rate is 1.2% + 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 an initial rate of 2%. 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 3.65% fixed rate in the first six months and a 4.15% fixed rate subsequently.

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.

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. 

Hipotecas Mortgages

If you’re searching for a flexible non-resident lender offering mortgage options for new-builds and fixer-uppers, including financing for renovation, Hipotecas is your answer.

The minimum property purchase for non-residents is 150.000 EUR, while the minimum mortgage is 60.000 EUR. 

 

Homevest simplifies obtaining mortgage from abroad

Homevest helps you understand and centralize your cross-border house-buying experience into one place.

Using the platform, you get support in preparing documents and sending requests to banks without paying extra fees. Homevest is a free service built specifically to work in your favor and save you time. 

If you want to obtain mortgage financing from abroad using Homevest, you need to take the following steps:

• Sign up on homevest.io and give some essential information to estimate a budget for your credit (country of residence, type of employment contract, income, and the deposit you can offer)
• Create an account to apply for a mortgage, and tell what stage you are in the home-buying process
• Upload copies of your documents to verify their eligibility - the copies will be forwarded to the eligible banks
• Manage your application file in your Homevest account and follow your progress

Filling out the application form and uploading the necessary documents on the Homevest platform takes a few minutes. After your documents are checked and sent to the eligible banks, the banks will contact you within 10 working days.

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:

Service | Price

• Property transfer tax | 8-12% of the purchase price
• Notary costs, title deed tax, land registration fee | 800-900 EUR
• Property Registry fee | 350 EUR
• Legal fees | 1%
• Estate Agent Fee | 3% 

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.

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 if you want tailored advice when buying your new home in Spain from the UK.

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. Get started and apply for a cross-border mortgage in minutes.

Sources used and checked on February 2023:

1. Foreigner Identity Number (NIE)
2. Sabadell Mortgages
3. Unicaja Mortgages
4. Bankinter Mortgages
5. The cost of buying a property 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.