Buying a house in Spain: step by step

Buying a house in Spain is perfectly doable, but the process differs from what you know at home. There is no financing condition unless you have it added yourself, and the buyer’s costs are considerably higher. This is the route from viewing to keys.

Step 1: papers in order

You need a NIE number (the Spanish identification number for foreigners) and a Spanish bank account. Arrange both before you start bidding seriously; applying for a NIE takes weeks and without that number no notary will sign.

Step 2: the offer and the arras contract

Once you agree on the price, you usually sign a reservation document with a small amount first, then the contrato de arras: a preliminary purchase contract with a deposit of around ten percent. Mind what you sign. If you withdraw, you lose the deposit. If the seller withdraws, they must pay back double. Have an independent lawyer (abogado) read the contract first; one typically costs around one percent of the purchase price and almost always earns it back.

Step 3: the checks

Your lawyer checks with the property register (Registro de la Propiedad) whether the seller really owns the property, whether debts or seizures rest on it and whether everything was built legally. With older houses in the countryside that last point is no formality: illegal extensions are common along this coast. Also ask for the cédula de habitabilidad (habitability certificate) and, with apartments, for any debts to the owners’ association.

Step 4: the notary

The transfer happens at the notary with the escritura, the deed. Registration in the property register follows. If you buy with a mortgage, the bank signs too. Non-residents can usually borrow up to seventy percent of the valuation from Spanish banks; count on at least thirty percent of your own money, plus the costs.

The costs in a row

• Transfer tax (ITP): ten percent on existing homes in the Valencia region.
• New build: ten percent VAT (IVA) plus roughly one and a half percent stamp duty (AJD).
• Notary and registry: together roughly one to two percent.
• Lawyer and gestoría: around one percent.

Add it all up and you land at twelve to fourteen percent on top of the purchase price. Buy at 200,000 euros and you spend around 227,000 euros.

Where do you buy?

That depends on what you want: city life in Alicante, quiet in the villages behind the coast or an urbanisation by the sea. Our pieces on the most beautiful villages and the cost of living give an honest picture per area. Rent for a few months in your chosen area first; a winter on the coast tells you more than ten viewings in July.

About the authorMilo Schuijt

Milo Schuijt is an entrepreneur and DJ on the Costa Blanca. He writes about the places where he lives, works and plays: from beach bars to the housing market.