Buying property in Spain is genuinely achievable for foreign nationals — but the process is structured differently to the UK, Ireland, Germany, or the United States, and the terminology takes some getting used to. This guide walks through the complete end-to-end process: from obtaining your NIE to receiving the keys, covering taxes, contracts, and costs at each stage.
The examples and context throughout are drawn from Alicante province and the Costa Blanca, where the international buyer share is among the highest in Spain and the market infrastructure for non-resident buyers is well established.
Before You Buy: The NIE Number
The Número de Identificación de Extranjero (NIE) is the Spanish tax identification number for non-residents. It is not optional — you will need it to:
- Sign any property contract
- Open a Spanish bank account
- Pay taxes on the transaction
- Register the property in your name
Obtaining a NIE requires a visit either to a Spanish consulate in your home country or to a Comisaría de Policía (police station) in Spain with a valid Extranjería (foreigners) unit. Processing times vary: within Spain, appointments in Alicante are generally available within two to four weeks; via consulate abroad, allow four to eight weeks depending on location.
The NIE application requires your passport, a completed EX-15 form, and documentation explaining why you need the NIE (a reservation contract, for example, is sufficient). If you are already committed to a property purchase, many buyers obtain the NIE through a local Spanish solicitor (abogado) via a poder notarial (power of attorney) — a practical arrangement that avoids the need for a personal visit.
Step 1: Reservation Contract (Contrato de Reserva)
Once you have identified a property and agreed a price with the developer or vendor, the process formalises with a reservation contract. This is a short-form document — typically two to five pages — that records:
- The property (address, reference, basic specifications)
- The agreed purchase price
- The reservation deposit — typically €3,000–€10,000 for new-build apartments on the Costa Blanca
- The deadline by which the contrato de arras must be signed
The reservation deposit is deducted from the final price. If the transaction does not proceed due to the buyer’s withdrawal at this stage, the deposit is generally forfeited. If the developer withdraws, the deposit is typically returned (the terms of the reservation contract govern this precisely).
This is not yet the binding purchase contract. Its purpose is to take the property off the market while due diligence is completed.
Step 2: Due Diligence
Between the reservation and the arras contract, your Spanish solicitor should verify:
Title search (nota simple): Confirms the vendor is the registered owner and reveals any charges, mortgages (hipotecas), or encumbrances on the property. Available from the Registro de la Propiedad (Land Registry) at low cost.
Planning and licences: For new-build properties, confirm the developer holds a valid licencia de obra (building licence). For resale properties, confirm no outstanding planning enforcement issues.
Community charges and IBI: Check for any outstanding comunidad de propietarios (residents’ association) fees or Impuesto sobre Bienes Inmuebles (IBI, municipal property tax) arrears. Unpaid charges pass to the new owner under Spanish law.
Developer’s bank guarantees (new-build): For off-plan purchases where stage payments are made before completion, Spanish law requires the developer to hold those funds in a ring-fenced bank account with a guarantee (aval bancario) or insurance. Obtain and retain this documentation before any payment beyond the reservation deposit.
Step 3: Contrato de Arras
The contrato de arras (deposit contract) is the main pre-completion agreement and the point at which both parties become legally committed. There are three forms under Spanish law, but for property purchases the standard format is the arras penitenciales under Article 1454 of the Código Civil:
- The buyer pays a deposit, typically 10% of the purchase price (inclusive of the reservation amount already paid)
- If the buyer withdraws, the deposit is forfeited
- If the vendor withdraws, the vendor must return double the deposit to the buyer
The arras contract also specifies the completion timeline — typically 30–90 days for resale properties, longer for new-build completions.
For off-plan new-build purchases, the payment structure is different: there is usually a stage-payment schedule agreed at reservation, with a deposit of approximately 30% paid in tranches during construction, and the remaining balance at escritura (notarial completion). In this case, the arras stage may be combined with or replaced by the developer’s bespoke purchase contract.
Step 4: Mortgage (If Applicable)
If you require mortgage finance, the arras stage is when mortgage applications are typically progressed. Spain has a developed mortgage market for non-residents. Non-resident buyers can typically borrow up to 60–70% of the purchase price (compared to 80% for Spanish residents), though individual bank criteria vary.
Required documentation generally includes:
- Passport and NIE
- Last two years’ tax returns or P60/equivalent income documentation
- Three to six months’ bank statements
- Employment contract or proof of self-employment income
Allow four to eight weeks for mortgage approval. Some Spanish banks offer dedicated international buyer services; several Northern European banks also offer Spanish mortgages directly.
Step 5: Escritura de Compraventa — Notarial Completion
The escritura pública de compraventa is the formal deed of sale signed before a Spanish notario (notary public). The notary’s role in Spain is different from a solicitor in the UK system: the notary is a state-appointed official who verifies the legal validity of the transaction, confirms the parties’ identities, and ensures the deed is correctly executed. The notary does not represent either party — both buyer and vendor appear before the same notary.
At completion:
- The balance of the purchase price is transferred (bank transfer or banker’s draft on the day)
- The escritura is signed by both parties before the notary
- Keys are handed over
The escritura is then registered at the Registro de la Propiedad — typically within four to eight weeks of completion. Until registration, the buyer holds a copia simple (simplified copy) of the deed as proof of ownership.
Taxes and Costs: What to Budget
This is where international buyers frequently underestimate the total transaction cost. Budget for the following beyond the purchase price:
Transfer Tax vs VAT: New-Build vs Resale
The tax treatment depends on whether the property is new-build or resale:
New-build (obra nueva, first transmission):
- IVA (VAT): 10% of the purchase price (standard residential rate; 4% for vivienda de protección oficial social housing — not applicable to typical market purchases)
- AJD (Actos Jurídicos Documentados, stamp duty): 1.5% in the Comunidad Valenciana (Alicante province applies this rate)
- Total tax burden: approximately 11.5% of purchase price
Resale (segunda transmisión):
- ITP (Impuesto sobre Transmisiones Patrimoniales, transfer tax): 10% in the Comunidad Valenciana
- AJD is not additionally payable on resale
- Total tax burden: approximately 10% of purchase price
Additional Purchase Costs
| Cost | Typical Range |
|---|---|
| Notary fees | 0.2–0.5% of deed value |
| Land Registry fees | 0.1–0.3% of deed value |
| Solicitor / abogado | 0.5–1% of purchase price (fixed fee arrangements also common) |
| Property survey (if desired) | €300–€800 depending on property |
| Mortgage arrangement fee (if applicable) | 0.5–1.5% of mortgage value |
Total transaction cost rule of thumb: Budget 12–15% of the purchase price on top of the property price to cover all taxes, fees, and professional costs comfortably.
IRNR for Non-Resident Property Owners
Once you own a property in Spain, you have ongoing tax obligations as a non-resident:
IRNR (Impuesto sobre la Renta de No Residentes) applies to all non-residents with property in Spain — even if you do not rent out the property. The basis differs:
- Empty property (imputed income): The tax is calculated on a notional rental value (typically 1.1–2% of the valor catastral). The rate is 19% for EU/EEA residents, 24% for non-EU/EEA residents.
- Rental income: 19% on net rental income for EU/EEA residents (deducting allowable expenses); 24% gross for non-EU/EEA residents with no expense deduction.
IRNR is filed annually (or quarterly for rental income). The modelo 210 is the standard return form. Many non-resident property owners engage a local gestor (tax administrator) for filing, at a cost of approximately €100–€200 per year.
IBI (Impuesto sobre Bienes Inmuebles) is the annual municipal property tax, due regardless of residency. Rates vary by municipality and cadastral valuation; typical annual IBI for a two-bedroom apartment in Alicante is €400–€900.
The Costa Blanca in Context: What Foreign Buyers Find Here
Alicante province — the core of the Costa Blanca market — combines several factors that make it practical for international buyers beyond lifestyle considerations:
Developer market experience: The Costa Blanca has one of the highest non-Spanish buyer percentages in Spain. Local developers routinely handle NIE assistance, multilingual contracts, and international bank transfers. The transaction infrastructure is well adapted to foreign buyers.
New-build supply: The Alicante market has sustained new-build development activity, providing buyers with access to contemporary builds with developer warranties and off-plan payment schedules. This is distinct from markets like central Madrid where resale stock dominates.
Rental market: Both long-term residential rental demand (from EU residents relocating) and short-term tourist rental demand contribute to yield potential for investors. Short-term rental requires a licencia de apartamento turístico — the licensing regime in the Comunidad Valenciana has tightened, so verify licence availability for a specific property before purchasing with a short-term rental intention.
Airport access: Alicante-Elche Airport (ALC) provides direct connections across Europe. This is a liquidity factor for investor-buyers: a wider pool of future buyers increases resale options.
Working with Independent Legal Counsel
This point warrants emphasis: for any non-trivial property transaction in Spain, engage an independent Spanish solicitor (abogado) before committing funds beyond the reservation deposit. Independent means not recommended by or employed by the developer or selling agent — your solicitor’s obligation is to you, not to the transaction completing.
Specifically, your solicitor should:
- Conduct the nota simple and verify title
- Review all contracts before you sign
- Advise on tax implications for your specific residency situation
- Coordinate the escritura on your behalf (or attend with you)
- Manage the post-completion registration
The cost is a modest fraction of the transaction value. The protection is material.
Inversa Development: New-Build Apartments and Investment Products on the Costa Blanca
Inversa Development operates as Makarov e Hijos, Sociedad Cooperativa (CIF F42521534), registered in Alicante. We develop new-build residential properties on the Costa Blanca — including apartments in San Juan de Alicante — available for direct purchase by end-buyers.
We also offer structured co-investment products for qualified investors who wish to participate in development projects through bilateral private agreements. Both products are documented to the standards described in this guide: bank guarantees for stage payments, complete escritura processes, independent legal review actively encouraged.
For new-build buyers, the buying process follows the structure outlined here: reservation → arras → stage payments during construction → escritura at completion. We provide full documentation at each stage and can assist with NIE referrals and solicitor introductions.
You can review our current projects and learn about investment participation at Inversa Development investments.
Legal disclaimer: This article is informational only and does not constitute legal, financial, or tax advice. Property transactions in Spain involve legal and financial complexity, and regulations may change. Individual tax obligations depend on your country of residence, applicable double-taxation treaties, and personal circumstances. Investment products offered by Inversa Development (Makarov e Hijos, Sociedad Cooperativa, CIF F42521534) are structured as bilateral private agreements and do not constitute a public offering under Ley del Mercado de Valores (LMV). Consult a qualified Spanish abogado and an independent tax adviser before committing to any property transaction or investment in Spain.