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Buying or Selling Property in Spain

1. What taxes do I pay when buying property in Spain?

The taxes you pay when buying in Spain depend on two things: whether the property is a new build from a developer or a resale from a private owner, and which autonomous community (region) it is located in.

Resale properties — Transfer Tax (ITP)

When buying from a private seller, you pay Impuesto de Transmisiones Patrimoniales (ITP). Rates are set by each autonomous community and range from 6% in Madrid to a progressive scale reaching 13% in the Balearic Islands for high-value properties.

New build properties — VAT + Stamp Duty

Buying from a developer means paying IVA (VAT) at 10% for residential properties, plus AJD (Stamp Duty) at between 0.5% and 1.5% depending on the region. ITP and VAT are mutually exclusive — you never pay both.

2. What taxes do I pay when selling property in Spain?

Selling property in Spain triggers two main taxes for the seller: Capital Gains Tax and Plusvalía Municipal.

Capital Gains Tax (CGT)

CGT is calculated on the profit — the difference between the purchase price (plus acquisition costs and improvements) and the sale price (minus selling costs). The rate depends on your tax residency:

• Spanish tax resident: 19% on first €6,000 gain; 21% on €6,001–€50,000; 23% on €50,001–€200,000; 27% above €200,000
• EU/EEA non-resident: flat 19%
• Non-EU non-resident: flat 24%
• 3% withholding rule: For non-residents, the buyer withholds 3% of the sale price and pays it directly to the Tax Agency as a CGT advance. The seller settles the difference (or claims a refund) within 4 months.

Plusvalía Municipal

This local tax, paid to the Ayuntamiento, is based on the increase in cadastral land value during your ownership period. Sellers who sell at a loss are formally exempt since the 2021 Constitutional Court ruling. Your lawyer calculates your exact liability before you commit to a sale price.

3. How long does it take to buy a property in Spain?

A typical resale purchase takes 8–12 weeks from accepted offer to notary completion. The main phases:

4. Do I need a property lawyer to buy in Spain?

Using a property lawyer is not legally compulsory in Spain — but it is one of the most consequential decisions you will make. The risks of buying without independent legal advice are well-documented and often very costly.

The key point: your estate agent works for the transaction, the notary is a neutral state official, and the developer’s lawyer works for the developer. None of them act in your sole interest. Only an independent property lawyer does.

• Land Registry checks — verifying ownership and identifying debts, charges, or encumbrances
• Planning due diligence — confirming building licences and compliance with local planning rules
• Contract review — analysing every clause in the reservation contract and contrato de arras before you sign
• Tax advice — calculating your exact ITP or VAT liability before you commit
• NIE and bank account — managing the paperwork required before completion
• Notary representation — attending in person or via Power of Attorney
• Post-completion — paying taxes on time, registering title, transferring utilities

Legal fees are typically 0.5–1% of the purchase price plus 21% IVA. On a €400,000 property, that is €2,000–€4,000 — a small cost relative to the protection it provides.

5. How much mortgage can I get in Spain as a foreign buyer?

Spanish banks lend based on a bank-commissioned valuation of the property, not the agreed purchase price. Lending limits in 2026:

• Non-resident buyers: up to 60–70% of the bank’s valuation
• Spanish tax residents: up to 80% of the bank’s valuation
• The bank valuation may be lower than the purchase price — especially in less predictable markets
• Repayments must not exceed 35–40% of your net monthly income across all debts

6. What is the contrato de arras?

The contrato de arras penitenciales is the private purchase contract signed between buyer and seller, typically 3–5 weeks after offer acceptance. It is legally binding under Spanish law and establishes:

• The agreed purchase price
• The completion date at the notary
• The 10% deposit paid by the buyer on signing
• Penalty clauses: seller withdraws → returns double the deposit; buyer withdraws → forfeits the deposit
• Conditions precedent — mortgage approval, satisfactory due diligence, etc.

7. What is a NIE number and do I need one?

The NIE (Número de Identificación de Extranjero) is the Spanish tax identification number for foreign nationals. It is mandatory for all property purchases — without it, you cannot sign a title deed, open a Spanish bank account, or pay property taxes.

• In person in Spain — at a National Police station with an appointment. Allow 2–4 weeks
• Via Power of Attorney — your Spanish lawyer applies on your behalf. Most practical for buyers not yet in Spain
• At a Spanish consulate — in your home country before travelling

Apply for your NIE as early as possible — before you find a property if you can. It is a prerequisite for every subsequent step in the purchase.

8. Can I buy property in Spain without travelling?

Yes. Many international buyers complete their entire Spanish purchase remotely using a Power of Attorney (Poder Notarial), which authorises your Spanish property lawyer to act on your behalf at every stage — signing contracts, obtaining your NIE, opening a bank account, paying taxes, attending the notary, and registering the title deed.

The Power of Attorney can be executed:

• Before a Spanish notary — if you visit Spain at any point during the process
• At a Spanish consulate — in your home country (UK, US, Germany, etc.)
• Before a local notary with Apostille — in your home country; the document is then legalised for use in Spain

9. Can UK citizens still buy property in Spain after Brexit?

Yes — absolutely. Brexit has no effect on property purchase rights in Spain. UK nationals can buy, own, and sell property freely with no restrictions.

What has changed for UK buyers since January 2021:

• Mortgage LTV: UK buyers (as non-EU non-residents) are typically limited to 60–70% LTV rather than 80%
• Non-resident income tax (IRNR): UK owners pay 24% on rental or imputed income, rather than the 19% EU rate
• 90/180-day rule: Without a visa, UK nationals can spend a maximum of 90 days in any 180-day period in the Schengen Area. Property ownership does not grant the right to remain longer
• Residency routes: The Non-Lucrative Visa, Digital Nomad Visa, and other routes are available for UK buyers wishing to live in Spain long-term. Your lawyer can advise on these alongside the property purchase

10. ITP transfer tax rates by region (2026)

Transfer Tax varies significantly across Spain. Choosing the right region is as much a financial decision as a lifestyle one.

Frequently Asked Questions — Buying or Selling Property in Spain