Buying Property in Spain: Process and Obligations
Key Figures at a Glance
| Indicator | Value |
|---|---|
| Transfer tax on resale (ITP), Balearic Islands | 8 % up to €400,000, tiered up to 13 % above €2m (ATIB) |
| New build | 10 % VAT (IVA) plus 1.5 % stamp duty (AJD), 2 % from €1m (Guía Fiscal) |
| Buying from a non-resident | buyer withholds 3 % of the price and pays it over (Agencia Tributaria) |
| Total purchase costs, resale | approx. 10 to 15 %, depending on price (BELLAZZURA estimate, non-binding) |
The Purchase Process
- Get an NIE. Foreign buyers need the NIE identification number for the contract, taxes and land registration (Colegio de Registradores).
- Preliminary contract with deposit. Under the arras contract the buyer pays a deposit. In the usual form the buyer loses it on withdrawal; if the seller withdraws, the seller repays double (Art. 1454 Civil Code).
- Checks. Ownership and encumbrances are shown in the land register extract (nota simple). Anyone planning to let checks the licence; in the Balearic Islands new holiday rentals in apartment buildings have been prohibited since April 2025 (BOE).
- Notary appointment. The purchase is concluded in a public deed (escritura) before a notary. Payment methods and in some cases the origin of funds must be documented (Colegio de Registradores).
- Tax and land register. Existing properties are subject to transfer tax (ITP), new builds to VAT (Agencia Tributaria). Registration in the Registro de la Propiedad follows.
After the Purchase
- The municipality levies the annual property tax IBI.
- Non-residents pay tax on an imputed income from the property if they use it themselves or leave it empty (Agencia Tributaria).
- The residence permit for property investors (Golden Visa) was abolished on 3 April 2025 (Spanish government).
Prices, locations and purchase costs: Real estate in Spain.
Purchase Costs and Taxes
Worked example: resale apartment in Mallorca for €800,000
| Item | Amount |
|---|---|
| ITP 8 % on €400,000 | €32,000 |
| ITP 9 % on €200,000 | €18,000 |
| ITP 10 % on €200,000 | €20,000 |
| Notary, land registry, administration, approx. 1 to 2 % | approx. €8,000 to €16,000 |
| Total | approx. €78,000 to €86,000, around 10 to 11 % |
For a new build at the same price, 10 % IVA (€80,000) and 1.5 % AJD (€12,000) apply instead of ITP. The scale applies each rate only to the relevant band of value.
Legal Due Diligence
- Land register extract (nota simple): owner, mortgages, easements
- Cadastral data and comparison with what is actually built
- Habitation certificate (cédula de habitabilidad) and building permits; for fincas the legal position on rural land
- Certificate from the owners’ association on paid charges, latest property tax receipt (IBI)
- If letting is planned: licence and whether it can be transferred
Letting
New holiday lets in apartment buildings have been prohibited in the Balearic Islands since April 2025 (BOE). Non-residents pay tax on rental income in Spain; with own use or vacancy, an imputed income is taxed (Agencia Tributaria).
Selling
If a non-resident sells, the buyer withholds 3 % of the price and pays it within one month; the seller credits it against their tax (Agencia Tributaria). The municipal land value tax (plusvalía) is then paid by the buyer and settled in the contract (City of Madrid).
Questions for Your Tax Adviser
- How are Spanish rental income and sale gains treated in Germany?
- Is it better to buy jointly or through a company?
- What are the consequences of later moving to Spain?
Who Does What
- Lawyer (abogado): checks, preliminary contract, representation by power of attorney
- Notary: public deed (escritura)
- Gestoría: taxes, land registration, utilities
- Agent: property, documents, negotiation and coordination
Overview, no legal or tax advice. Before signing, please involve a notary or lawyer in the country concerned. Figures with source and date; figures marked “approx.” and worked examples are non-binding estimates.