Buying Property in Spain as a Foreigner: Procedures and Advice

Buying real estate in Spain as a foreigner requires mastering specific administrative procedures and understanding the local market well. With prices rising by 16.1% since November 2024, it is advisable to gather thorough information beforehand to successfully carry out your investment. At Immo Center, a real estate specialist in Empuriabrava, we help you gain a clearer understanding before taking the plunge.

Investing in real estate in Spain: an expanding property market

Spain is currently going through a remarkable expansionary phase in its real estate market: the national average price is stabilizing around €2,605/sqm, and mortgage rates remain around 3 to 4%. This momentum is largely due to the growing appeal of the Mediterranean lifestyle and the financial stability of Spanish banking institutions, which generally apply the same rates to foreigners as they do to Spaniards. It is important to know that the Costa Brava attracts more and more tourists: Empuriabrava and Roses welcome thousands of European visitors every year. Moreover, compared to the most popular destinations in Spain, both municipalities benefit from lower prices for real estate sales, a definite advantage for investors:

Source: idealista

Our presence in Empuriabrava and Roses allows us to assist many investors with their real estate projects on a daily basis. Thanks to this experience, we are well acquainted with the subtleties of the local market, urban developments, as well as administrative particularities. This enables us to offer you the best opportunities for purchasing houses or apartments in Empuriabrava or Roses.

The important steps to becoming a homeowner in Spain: NIE, budget, and financing

To become an owner of real estate in Spain, certain procedures need to be anticipated. Indeed, to successfully carry out your real estate project, you must first obtain your NIE, define your budget, and understand how Spanish banking institutions operate, especially for foreign investors.

Obtaining the NIE, your administrative passport for Spain

The NIE (Número de Identificación de Extranjero, or foreigner identification number) is your tax identifier in Spain: every foreigner planning to buy a property in Spain must obtain an NIE. This step is essential for the entire process, because without an NIE, you could face complications when registering with the land registry or filing tax returns. To obtain your NIE, you must provide:

• Your valid passport or ID card
• The duly completed EX-15 form
• A supporting document stating the reason for your request (e.g., a purchase promise)

You must also pay the administrative fee of 9.84 euros (form 790 code 012). You can complete this process from your home country at the Spanish consulate, or in Spain at an authorized police station.

The budget and cross-border personal contribution

Financing real estate in Spain differs slightly from other European models. While a domestic buyer might typically secure a mortgage with a 10% to 15% deposit, foreign investors in Spain must generally anticipate providing around 50% of the property’s price from their own funds. This contribution accounts for unavoidable associated costs and aims to offset the limits of Spanish bank loans for non-residents. Practically speaking, for a house in Empuriabrava listed at 300,000 euros, you will need to have around 150,000 euros in personal funds. Therefore, you must ensure you are well prepared financially and well organized to make your project successful.

Bank financing in Spain: what are the conditions for non-residents?

Spanish banks generally finance between 60% and 70% of the property’s value for non-residents, compared to a maximum of 80% for residents. You must therefore plan for a personal contribution of 30% to 40% of the purchase price, in addition to acquisition costs (around 10-15% of the price). To obtain financing from a Spanish bank, you must provide a number of supporting documents:

• Proof of identity
• Your NIE
• Proof of income: employment contracts, payslips, tax assessments, recent bank statements
• Documents concerning the property: purchase contract or pre-contract, property valuation report
• Official translations of all documents, performed by a sworn translator

You will also need to open a bank account in Spain to manage payments related to the loan and the purchase. To do this, note that major banks offer accounts for non-residents, often with varying terms.

Initial research: preparing your purchase on the Costa Brava

The search for real estate in Spain generally begins by exploring specialized online platforms, which allow you to view a wide selection of listings in Empuriabrava, Roses, but also more broadly listings for houses and apartments on the Costa Brava. On our website, we provide numerous filters to facilitate your initial searches: city, property type, budget, number of bedrooms and bathrooms, type of mooring, sea view, swimming pool, garage/parking, elevator.

To best plan your investment, especially if you consider acquiring property in Roses or Empuriabrava, it is better to know the assets of both towns. Empuriabrava is popular for its navigable canals and properties with private moorings, a unique feature in Spain that attracts an international clientele seeking an exclusive lifestyle. Roses, on the other hand, boasts a more traditional environment with family-friendly beaches, a lively historic center, and well-developed tourist infrastructures.

At Immo Center Empuriabrava, we put our knowledge of the local market at your service and organize targeted visits according to your criteria: budget, type of property (house, villa, apartment), proximity to shops, direct beach access, or mooring possibilities. Our expertise allows us to quickly identify opportunities that match your project, and we objectively evaluate each property before presenting it to you: overall condition, potential for value appreciation, neighborhood tranquility, sunlight exposure, etc.

The purchasing process and contracts: from reservation to the notarial deed

Once you have selected your real estate property in Empuriabrava, Roses, or on the Costa Brava, you will need to go through three contractual phases to validate the acquisition. These steps, which may differ from the system in your home country, require a good understanding to secure your investment.

The señal: a first financial commitment

The first contractual step consists of paying a señal (reservation fee) of around 1,000 euros to take the property off the market. This deposit, although modest, legally binds both parties. The reservation of the property is formalized by signing a purchase offer (reserva), a document that outlines the conditions of the future transaction. This period makes it possible to initiate the necessary preliminary legal checks to coordinate all the professionals required to secure the purchase.

The contrato de arras: the Spanish preliminary sales agreement

The contrato de arras refers to the preliminary sales agreement. At this stage, the initial deposit is topped up to reach 10% of the property’s total price. This contract firmly binds the seller and buyer under specific penalties:

• If the buyer backs out without a valid reason, they lose the deposit paid
• If the seller backs out of the sale, they must return double the deposit amount to the buyer
• The time between the arras and the final signature is generally 30 to 45 days

At Immo Center, we ensure that this contract protects our clients’ interests, notably by including suspensive clauses linked to the results of legal checks or obtaining your bank financing.

The escritura: the final signature before the notary

The escritura is the authentic deed of sale. Unlike notaries in some other European countries, the Spanish notary authenticates signatures and verifies the identities of the parties, but does not systematically check the legal status of the property. This is why legal support is essential up to this final step. During this signing, you pay the remaining 90% of the purchase price. The notary then hands you the keys to your property. You then have 30 days to pay the taxes and fees related to the transaction.

Legal checks and taxes

Legal checks condition the security of your investment. Contrary to what many think, the Spanish notary does not carry out the in-depth checks performed by their counterparts in certain other countries. Their role is limited to certifying the formal compliance of the bill of sale. That is why we work with specialized lawyers who consult the property registry to carry out seven legal checks:

1. Confirmation of the real identity of the selling owners
2. Detection of mortgage debts or existing charges
3. Verification of the property’s urban planning compliance
4. Checking for the absence of ongoing litigation
5. Validation of the surface area declared to the cadastre
6. Examination of easements or use limitations
7. Analysis of unpaid community obligations

In addition to legal checks, we help you plan your budget by incorporating all mandatory tax fees. For resale properties, you will need to pay the ITP (Impuesto sobre Transmisiones Patrimoniales, or Property Transfer Tax), which stands at 10% in Catalonia. For new properties, a 10% VAT applies. Also, remember the IBI (Impuesto sobre Bienes Inmuebles, or Real Estate Tax): this is the annual property tax, which varies depending on the municipality.