Buying a house in Spain as an American: full guide (2024)

Spain is an extremely popular destination for expats, looking for a pleasant climate and high standard of living.

Whether you’re thinking of working in Spain, in one of the major cities, such as Madrid, Barcelona or Valencia, or retiring to the Spanish coast, you can find your perfect place to buy your Spanish home.

In this guide you’ll find everything you need to know about buying a house in Spain as an American. And how to save on sending money to Spain while you’re at it.

Ready? Let’s get started.

What’s the property market like in Spain?

76% of people in Spain own their own homes, compared to the US average of 65%, and the large expat communities scattered throughout Spain means that a high proportion of real estate is already foreign owned¹.

However, the property market in Spain has been something of a roller coaster in recent history. In the years before the global financial crisis, Spanish housing prices had been among the highest in Europe, with some areas seeing growth in the region of 250% in the 10 years prior to the crash.

However, the financial crisis brought a major readjustment to the Spanish property market. Across the country, property prices on average lost around 40% of their value between the end of 2007 and the third quarter of 2015.

Spanish property is now starting to be seen by many as a strong investment once more. This renewed interest has pushed up prices, despite the negative impact of the global pandemic. Property prices in Spain rose by 2.6% in 2021, and early reports in 2022 suggest the pace of this increase is not expected to slow any time soon².

Can Americans buy property in Spain?

There aren’t any special requirements for Americans — or foreigners — to buy property in Spain.

In fact, the Spanish government is known for encouraging foreigners to invest in the country, so you shouldn’t encounter any issues when making your purchase.

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How to buy a house in Spain: step by step

Buying a property in Spain isn’t too dissimilar to buying a home elsewhere in Europe or North America. You’ll need to:

1. Set your budget

Foreigners buying a property in Spain can have a number of different intentions, and therefore a broad range of budgets depending on whether you’re buying a home to live in, looking for a vacation rental or investment.

Your first step is likely to be to work out how you’ll pay for your property, and set your budget accordingly.

If you’ll get a loan for the purchase, decide which mortgages might suit you, and get an offer in principle so you have a budget in mind

2. Apply for your NIE and get your team on hand

Before you even start looking for a property in Spain, there are a few important steps. You’ll need to get a Número de Identificación de Extranjeros (NIE) which is a tax registration number.

Get this in Spain or at your consulate in the US if you’ve not traveled there yet. With this number you’ll be able to open a Spanish bank account if you need one, too.

You should also find yourself a great property lawyer who understands Spanish property law and can help you navigate the purchase hassle free.

3. Find the property you want to buy

Make an offer the seller agrees to and have your lawyer draw up the Contrato de Reserva. This is a reserve contract which will mean the property is taken off the market for an agreed amount of time to let you complete due diligence checks.

Usually you’ll pay a fee which is held in escrow while these checks are completed — your property lawyer can help you negotiate this stage in the right way to ensure you get your money back if the deal falls through.

4. Complete due diligence checks

Your property lawyer will now step in, to check the Registro de la Propiedad (Property Registry) to make sure there are no debts outstanding against the property.

They’ll also check over all the property ownership documents to make sure the sale is legal.

It’s advisable also to have the house surveyed at this point. Once you’re all done, go back to the bank and finalize the mortgage if you’ll be using one.

5. Sign and pay your deposit

Sign the preliminary agreement — known as the Contrato Privado de Compraventa, and pay your 10% deposit. Your deposit must usually be paid within 10 days of the agreement being signed.

Make sure this includes an arres agreement. This means that if the seller subsequently withdraws the agreement you’re entitled to double your deposit money back. Any final legal checks can now be completed, so you’ll be ready to close the sale.

6. Close and register the sale

Both you and the seller sign the Escritura de compraventa, to complete the purchase.

You now have to pay the balance of the price and any outstanding fees. Your lawyer will help you to register the sale at the Notaria Publica (notary), and you’re done!

Cost of buying property in Spain

If you’re thinking of buying a property in Spain, the price you pay will be influenced significantly by where you want to live.

The costs of homes in larger cities like Madrid and Barcelona are pretty high, while prime seaside locations can also be costly.

However, overall, the wide variety of different housing on offer means you can find something to fit pretty much any budget.

Average costs of buying a house in Spain

What are the property taxes and fees for buying a property in Spain?

When it comes to the fees of purchasing real estate in Spain, expect to add around 6 - 10% of the property price into your bill. These are likely to include:

The realtor fees are usually around 2.5 - 3% of the selling price and covered by the seller. Keep this in mind if you might sell the property later on.

Spend less oninternational transfers

Getting a mortgage in Spain

When buying a home in Spain it’s common to take a mortgage through a Spanish bank.

The Spanish banking industry is fairly well set up for foreigners, thanks to the large expat community there, with major Spanish banks like Bankia⁶, BBVA⁷, La Caixa⁸ and Santander⁹ offering a good range of mortgage products to both resident and non-resident applicants.

That said it’s worth checking the small print as each product will differ slightly from the next.

Non-resident mortgages, for example, are likely to be more limited than those offered to full time Spanish residents, with a higher deposit requirement.

If you’re planning on moving to Spain more permanently, you should consider opening a Spanish bank account and securing your mortgage, once you have confirmed your legal residency.

Choosing a bank

You can either choose a mortgage product directly with a bank, or work with a mortgage broker to find the right loan for your new Spanish home.

Using a broker can sometimes be a good idea - simply having someone on your side who speaks Spanish and really understands the system can pay dividends.

When you have chosen the mortgage product that works best for you, you’ll usually need to visit the bank in person to get a mortgage agreement in principle.

This is also handy to get a more solid idea of what you can afford. To get an agreement in principle you’ll need to show your creditworthiness, including proving your income and outgoings.

Things to know about the deposit

It’s normal to pay a deposit of 10% on your property which is held until the deal is completed.

If you’re paying your deposit from the US, a good way is to send your money with a fast, low-cost and secure Wise transfer.

Wise offers you the mid-market exchange rate for all your transactions and allows you to send money to Spain in just a few clicks.

You can also get a multi-currency account that enables you to receive money in 10 different currencies — including euros — and spend like a local wherever you are.

Finding and choosing property in Spain

Here’s everything that foreigners buying property in Spain should know about finding great Spain real estate, and the processes involved.

Getting an agency or realtor

When it comes to finding the right property for you, there are a few options you can consider:

• Use an inmobiliaria (real estate agency)
• Buy directly from the seller, through an online portal
• Find ads or word of mouth in neighborhoods you’re interested in

An estate agent, if used, generally works on behalf of the seller. The estate agent fees are likely to be between 2.5 and 3% of the price of the property, and are usually paid by the seller.

If it’s the first time you’ve bought a property in Spain, then a specialist buying agent or broker might offer helpful advice and insight into the local market.

However, there will be a fee to pay for this service, and you should make sure you’re clear on what you’ll get for your money, as both the packages and prices vary wildly.

🌐 If you’re looking into doing the research yourself, you can check one of the websites below as a starting point:

• Idealista¹⁰
• Servihabitat¹¹
• Fotocasa¹²
• Remax¹³

Finding the right property

Buying a home overseas is a big deal. It’s super exciting, but also comes with a lot of decisions — not least, about which specific property will suit you best. Here are some things to consider.

Live-in versus investment property in Spain

Spain has a well developed real estate sector. This means you'll have a wide choice of apartments, houses or even land if you want to build your dream home yourself. However, exactly what suits you will depend a lot on how you’ll use the property.

If you’re expecting to live in the home yourself — maybe because you plan to retire in Spain — then you’ll want to find a place that suits your personal needs.

However, if it’s an investment property you’re after, choosing somewhere that’ll bring in a good rental income and accumulate value over time is key.

Research is crucial. You can start online, but getting out to Spain to look around, chat to locals and get the feel of a place yourself can’t be beaten.

Types and conditions of the properties

There’s a good choice of property available in Spain, which varies from places perfect as holiday homes, great investment properties, and live-in housing which come with all the benefits of the Spanish lifestyle.

However, it’s really important to check the construction standards of the property before you buy — some houses, in particular those over about 15 years old, can have hidden problems which are costly to fix.

The good news is that construction standards in Spain have improved greatly over recent years, and new builds are of the same standard as in the US.

Older homes, however, may not have been built to quite the same meticulous standard. To double check this you can find a surveyor online¹⁴, or ask for recommendations from local connections.

Pitfalls of buying property in Spain

Here are a few things to watch out for to make sure you don’t fall foul of scams or issues when buying a property in Spain:

• Ask for local advice and recommendations for a property lawyer who understands the market well and is used to working with foreigners
• Make sure your realtor is registered with a professional body like the API association of Spanish realtors¹⁵
• Ensure all due diligence checks are carried out on the property — known scams include properties sold off plan which don’t materialize, and illegally built homes sold to foreign buyers
• Get a survey to check the construction quality to avoid high repair bills down the line
• Sense check any deal — if it looks too good to be true it probably is

What’s the best place to buy in Spain?

From chic city pads, to coastal boltholes, there’s plenty of choice of great Spanish property out there. Let’s take a look at a few popular cities and why expat buyers may like them, to give you some inspiration.

Madrid

The Spanish capital is naturally one of the more expensive places to buy property, but as an investment — or if you plan to work in Spain — it can be a great bet.

You’ll find great shopping, nightlife, cuisine and culture — and as Madrid is one of the largest cities in Europe, there are also plenty of housing options to choose from.

The central district of Salamanca is popular with professionals, while Retiro suits family buyers. If you want the best of Madrid but also some peace, consider nearby Pozuelo, just a few miles from the city center but with luxury real estate and more space.

Barcelona

Barcelona is another fun place for expats to buy property in Spain — but another one with a relatively high price tag.

While housing costs may not be quite as high as Madrid, they’re still pretty eye watering — shop around or consider locations slightly outside of the city center to make your budget go further.

Sarria and Tres Torres are good places to look for family accommodation, while Vila Olimpica will suit anyone looking to be in the heart of the action, with plenty of bars and nightlife to choose from.

Alicante

Both a city and a province on the Costa Blanca, Alicante is a super popular destination with expats, particularly people who want to retire in the sun.

If you’re looking for a regional home this is a great place to start, with an established expat community, great weather and plenty to do.

Popular cities in the area include Benidorm and Rojales, while Alicante city itself also presents a good option with a wide range of housing.

Seville

Romantic Seville, said to be the birthplace of modern tapas, is popular both with tourists and expats moving to Spain.

It’s a small city, so you won’t be far from the center wherever you choose to buy a new home — and the prices are somewhat lower than in places like Madrid and Barcelona, too.

What are the legal requirements of buying a property in Spain?

The notary has an extremely important role in house sales in Spain, including entering the property transfer onto the land register (Registro de las Propiedades).

However, you’ll also need your own property lawyer to help with other aspects of the sale, including due diligence checks to make sure the seller is actually the legal owner of the property, and that there are no existing debts listed against the property.

This is especially important in Spain, as debts are attached to the property and transfer with the ownership. If there’s an outstanding mortgage on the place in the previous owner’s name, you could find yourself liable for it.

Buying a property is a big and exciting step, but navigating the system in a new country can be a challenge. Luckily, buying your dream home in Spain should be fairly straightforward if you follow these steps, and source the right local help if you need it.

Good luck with finding, buying and settling into your new home in Spain.

Source:

1. Global Property Guide - Spain prices
2. El País - Real estate prices 2022
3. Numbeo - Cost of living comparison: Barcelona & Madrid
4. Numbeo - Cost of living comparison: Sevilla & Valencia
5. Global Property Guide - Spain buying guide
6. Bankia
7. BBVA
8. La Caixa
9. Santander
10. Idealista
11. Servihabitat
12. Fotocasa
13. Remax
14. Spanish Property Survey
15. API
16. Please see Terms of Use for your region or visit Only Pay for What You Use for the most up to date pricing and fee information.

Sources checked on 06.01.2022