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How buying property in Spain works: the 10,000-foot view
The Spanish property purchase process has four stages: reservation, private contract (arras), notary completion (escritura), and Land Registry inscription (registro). The full timeline from the moment your offer is accepted to the moment you hold the keys is typically 8–12 weeks for a straightforward resale purchase, or 2–3 years if you are buying off-plan. At each stage your legal and financial exposure increases, so the sequence of steps matters and cutting corners at any stage can create problems that are expensive to fix later.
As a foreign buyer you need three things before you can legally complete: an NIE number (fiscal identification), a Spanish bank account, and a Spanish lawyer who is independent of the estate agent and the seller. You do not technically need a lawyer (Spain does not require legal representation for property transactions) but buying without one is the single most common source of problems we see in our practice. A good independent lawyer costs 1–1.5% of the purchase price plus IVA and will save you multiples of that in avoided problems.
Step 1: NIE, bank account and lawyer, before you start viewing
Apply for your NIE number the moment you decide you are seriously looking at Spanish property. The NIE is a tax identification number that you need for virtually every legal and financial interaction in Spain, and the application can take anywhere from one week (in person at a Spanish police station) to eight weeks (through a consulate abroad). Starting early eliminates the most common cause of deal delays on the Costa del Sol.
Open a Spanish bank account before you find a property. You will need it to pay the reservation deposit, the arras deposit, the notary completion payment, and all ongoing taxes and utility bills. CaixaBank, Sabadell, and Santander all have English-speaking branches in Marbella and can open accounts for non-residents with a passport, NIE, and proof of address from your home country. The account opening itself takes 1–2 days in branch.
Engage a lawyer who specialises in property conveyancing for international buyers and who is completely independent of the selling agent. Your lawyer’s job is to conduct due diligence on the property (nota simple, debts, planning legality, community statutes), review and negotiate the arras contract, manage the completion process at the notary, and handle post-completion registration and tax filings. Budget 1–1.5% of the purchase price plus 21% IVA for a thorough service.
Step 2: Making an offer and signing the reservation
When you find a property you want to buy, you make a verbal or written offer through your agent. Negotiation norms on the Costa del Sol vary by market segment: in the sub-€1M band, 5–10% below asking is standard and vendors expect it; in the €1–3M band, 3–7% is typical; above €3M, negotiation depends heavily on how long the property has been listed and the vendor’s motivation. Well-priced new listings in high demand may sell at or above asking.
Once a price is agreed, you sign a reservation contract and pay a reservation deposit, typically €6,000–10,000 for properties under €1M or €10,000–50,000 for higher-value purchases. This reservation takes the property off the market for a defined period, usually 14–30 days, during which your lawyer conducts due diligence and the arras contract is drafted. The reservation deposit is usually refundable if your lawyer identifies a legal issue during due diligence, but not if you simply change your mind. Read the reservation contract carefully before signing.
Step 3: The arras contract: the binding private agreement
The arras de penitenciales is the binding private contract that commits both buyer and seller to the transaction. You pay 10% of the purchase price (minus the reservation deposit already paid) as a deposit. The legal significance of this deposit is straightforward: if the buyer withdraws, they lose the 10% deposit; if the seller withdraws, they must return double the deposit (20%) to the buyer. This symmetrical penalty structure is defined in Article 1454 of the Spanish Civil Code and is the standard across Andalucía.
Your lawyer should have completed due diligence before you sign the arras. This includes: obtaining a nota simple from the Land Registry confirming the seller’s title and any charges on the property, verifying that the property has a valid licence of first occupation (licencia de primera ocupación) or certificate of habitability (cédula de habitabilidad), checking for outstanding debts to the community of owners, verifying that the property matches its catastral reference and registered description, confirming there are no planning infractions or pending demolition orders, and reviewing the community statutes for any restrictions on short-term rental or modifications. Any of these checks revealing a problem is a valid ground for withdrawing with your reservation deposit returned.
Step 4: Notary completion and key handover
Completion takes place at a Spanish notary’s office (notaría). Both buyer and seller (or their representatives holding power of attorney) attend. The notary reads aloud the escritura pública (public deed of sale), confirms the identities of both parties, verifies that the property is free of charges or that any existing mortgage is being cancelled simultaneously, and witnesses the exchange of the remaining purchase funds. You receive the keys at this point.
Payment at completion is typically made by banker’s draft (cheque bancario) drawn on your Spanish bank account for the balance of the purchase price minus the deposits already paid. If the seller has an outstanding mortgage, the notary will coordinate with the seller’s bank to cancel it simultaneously: a portion of your payment goes directly to the seller’s bank to clear the mortgage, and the remainder goes to the seller. Your lawyer should confirm the exact payment mechanics the day before completion to avoid any surprises at the notary’s office.
After completion, your lawyer handles the post-completion formalities: paying the transfer tax (ITP 7% in Andalucía for resale, or IVA 10% + AJD 1.2% for new builds), registering the property in your name at the Land Registry, updating the catastral records, and changing the utility contracts. These steps typically take 2–4 months to complete fully, but you own the property and have the keys from the moment the escritura is signed.
Total buying costs: what to budget beyond the purchase price
The total transaction costs for buying property in Spain in 2026 typically range from 11–14% of the purchase price for a resale property in Andalucía, or 12–15% for a new-build. Here is the detailed breakdown for a €1.5M resale villa: Transfer Tax (ITP) 7% = €105,000; Notary fees approximately €1,200; Land Registry (Registro) approximately 0.4% = €6,000; Legal fees 1.2% plus IVA = approximately €21,780; Mortgage costs if applicable (valuation €500, arrangement fee 0.5–1% of the loan); Bank transfer costs €200–500; NIE application €10–700 depending on route; Gestoría fees for tax filings €400–500. Total additional costs: approximately €135,000–145,000, or roughly 9–10% on top of the €1.5M purchase price.
For a €1.5M new-build apartment, the costs differ: IVA 10% = €150,000 plus AJD (Stamp Duty) 1.2% = €18,000, replacing the 7% ITP. This makes new-build purchases approximately 2–3% more expensive in tax terms than resale, which is why we always advise buyers to factor this differential into their new-build vs resale comparison. The notary, registro, and legal costs are similar regardless of whether the property is new or resale.
Financing: Spanish mortgages for non-resident buyers
Spanish banks actively lend to non-resident buyers, typically offering 60–70% loan-to-value for non-residents compared to 80% for residents. Interest rates for non-residents in 2026 are broadly in the range of 3.5–4.5% for a variable-rate mortgage (Euribor plus 1.5–2.5%) or 3.8–5.0% for a fixed rate over 15–25 years. The maximum mortgage term for non-residents is typically 20–25 years, and most banks require that the loan is repaid before the borrower turns 75.
The application process takes 4–6 weeks from submission to approval. You will need: proof of income (employment contract, tax returns, or company accounts for the last 2–3 years), a bank valuation of the property (tasación, €300–600), credit history from your home country, and your NIE. The mortgage deed is signed at the notary simultaneously with the purchase deed, so timing the mortgage approval to align with your completion date is critical. Your lawyer and your bank should be in regular communication from the arras stage onwards.
Due diligence: what your lawyer must check
The minimum due diligence checklist for any Spanish property purchase includes: a current nota simple from the Land Registry confirming clean title and no charges; verification that the property description in the escritura matches the physical reality (built area, number of rooms, plot boundaries); confirmation of a valid licence of first occupation or certificate of habitability; review of the catastral reference and that the property is correctly registered for IBI purposes; a search for outstanding community debts (your lawyer requests a certificate from the community administrator); verification that there are no pending planning infractions, demolition orders, or AFO (Asimilado Fuera de Ordenación) status; and a review of the community of owners’ statutes and recent minutes for any upcoming special levies or disputes.
For rural properties or older builds, additional checks are essential: confirmation that the property is on urban or urbanisable land (not protected rural land), verification that any extensions or swimming pools were built with the correct licences, and a check that the property is connected to mains water and electricity legally rather than through informal arrangements. On the Costa del Sol specifically, we have seen a sharp increase in buyers encountering AFO issues, properties built without full planning permission that have been retrospectively legalised with conditions, and your lawyer must explain the implications before you commit.
The six mistakes that catch foreign buyers most often
First, not engaging a lawyer before signing anything. The reservation contract is a legally binding document and we have seen buyers sign reservations with onerous penalty clauses because they assumed it was just a formality. Second, using the seller’s lawyer or the agency’s recommended lawyer without understanding the conflict of interest. Your lawyer must be independent and work exclusively for you.
Third, not checking the urbanistic legality of the property. In Andalucía specifically, properties built or extended without the correct licences are common, and the consequences range from inability to get a mortgage to potential demolition orders. Fourth, not reading the community of owners’ statutes. These can prohibit short-term rental, restrict renovations, or include pending special levies of tens of thousands of euros. Fifth, underestimating the total costs. We see buyers who budget for the purchase price and the ITP but forget the legal fees, registro, notary, gestoría, and currency transfer costs, which together add another 4–7% on top of the tax.
Sixth, transferring funds too late. Spanish bank transfers take 1–3 working days, and international transfers can take longer. If you are converting Sterling or dollars to euros, you should arrange the currency transfer at least one week before completion to avoid exchange rate risk and transfer delays. Using a specialist currency broker rather than your bank can save 1–2% on the exchange, which on a €1.5M purchase represents €15,000–30,000.
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How long does it take to buy a property in Spain as a foreigner?
A straightforward resale purchase typically takes 8–12 weeks from accepted offer to notary completion. This breaks down as: 1–2 weeks for reservation and due diligence initiation, 2–4 weeks for due diligence and arras contract negotiation, and 4–6 weeks from arras to notary completion. If you need a mortgage, add 4–6 weeks for the approval process, though this usually runs in parallel with the conveyancing. Off-plan purchases take 2–3 years from reservation to completion, with stage payments during construction.
What taxes do I pay when buying property in Spain?
For a resale property in Andalucía: Transfer Tax (ITP) at 7% of the purchase price. For a new-build: IVA at 10% plus AJD (Stamp Duty) at 1.2%. On top of these headline taxes, you pay notary fees (approximately €1,200), Land Registry fees (approximately 0.4%), legal fees (1–1.5% plus IVA), and ongoing annual taxes including IBI (council tax, 0.4–1.1% of catastral value) and non-resident income tax (Modelo 210) if you are not a Spanish tax resident.
Do I need a Spanish bank account to buy property in Spain?
Yes, practically speaking. While the law does not strictly require it, you need a Spanish bank account to pay the notary completion via banker’s draft, to set up direct debits for IBI, community fees, and utility bills, and to receive any future refunds from the Spanish tax authorities. Opening an account as a non-resident is straightforward at CaixaBank, Sabadell, or Santander in Marbella. You need your passport, NIE, and a proof of address from your home country. It takes 1–2 days.
Can I buy property in Spain without visiting?
Yes, by granting a power of attorney (poder notarial) to your Spanish lawyer, who can sign the reservation, arras, and escritura on your behalf. The power of attorney must be notarised in your home country and apostilled. However, we strongly advise visiting at least once before committing. Virtual viewings and video calls are useful for shortlisting, but the feel of a neighbourhood, the quality of light, noise levels, and access routes are things you can only assess in person. At minimum, try to attend the notary completion in person.
What is the arras contract in a Spanish property purchase?
The arras de penitenciales is the binding private contract between buyer and seller that commits both parties to the transaction. The buyer pays 10% of the purchase price as a deposit. If the buyer withdraws, they lose the deposit. If the seller withdraws, they must return double the deposit to the buyer. This symmetrical penalty is defined in Article 1454 of the Spanish Civil Code. Your lawyer should complete all due diligence before you sign the arras, because once signed, pulling out costs you 10% of the property value.
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