How to buy a property in Spain as a foreigner: Complete guide

Spain is one of the most attractive destinations in the world for international property investment. Its quality of life, Mediterranean climate, well-developed infrastructure and competitive prices compared to other leading European markets continue to draw buyers and investors from across the globe.

Within Spain, Valencia has emerged as one of the most dynamic and high-potential markets, combining a premium residential offer with rental yields that are hard to find in Madrid or Barcelona.

That said, buying or investing in property in Spain as a foreigner raises legal, tax-related and practical questions that are worth addressing before taking the first step. This guide covers everything you need to know to approach the process with confidence and clarity.

Can a Foreigner Buy Property in Spain?

The answer is yes — and without any general restrictions. Spain allows any foreign national, whether resident or non-resident, to purchase property on its territory, regardless of their nationality. There is no prior residency requirement to complete a purchase, nor are there any limitations on property type.

The only essential requirement is having a NIE (Número de Identificación de Extranjero) — a tax identification number without which it is not possible to sign any deed of sale or carry out any formalities with the Spanish tax agency.

Citizens of the European Union, the United Kingdom, Latin America, the United States, the Middle East or Asia can all purchase property in Spain following the same process. The differences between profiles arise mainly in the tax area (resident vs. non-resident) and in the conditions for accessing mortgage financing.

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Steps to Buy Property in Spain as a Foreigner

1. Obtain Your NIE (Número de Identificación de Extranjero)

The NIE is the first mandatory step for any foreigner wishing to buy in Spain. It can be applied for at the relevant police station or through the Spanish consulate in the buyer’s country of residence. The process can take between two and four weeks, so it is advisable to handle it well in advance.

2. Open a Bank Account in Spain

While technically not a legal requirement, opening a bank account in Spain makes the process considerably easier: it allows direct debit of property tax (IBI) payments, utility bills and, if the property is later rented out, the management of rental income. Most notaries and administrative agents also prefer that the funds for the transaction come from a Spanish account.

3. Sign the Reservation Contract (Contrato de Arras)

Once the property has been selected, the next step is signing the contrato de arras, which reserves the property for the buyer and sets out the conditions and timeline of the transaction. At this stage, it is customary to pay a deposit of 10% of the purchase price. It is essential that this contract be reviewed by a trusted solicitor or estate agent before signing.

4. Sign the Public Deed Before a Notary

The transfer of ownership is formalised by means of a public deed signed before a notary. This is the moment at which the remaining price is paid, the applicable taxes are settled and the property legally changes hands. The notary verifies the identity of the parties, the property’s registry status and the absence of any outstanding charges or debts.

5. Register the Property at the Land Registry

After the notarial signing, the deed must be registered at the Land Registry (Registro de la Propiedad) for the purchase to be fully effective against third parties. This step is usually handled by the administrative manager (gestoría) or the estate agent accompanying the transaction.

Find out more → Residency Visa for Property Investment in Spain

Taxes and Costs When Buying Property in Spain as a Foreigner

ITP or VAT: Which One Applies to You?

The tax applicable to the purchase depends on whether the property is a new build or second-hand. For new-build homes, VAT applies (currently 10% of the purchase price, plus 1.5% in Stamp Duty — Actos Jurídicos Documentados). For second-hand properties, the tax is the Property Transfer Tax (ITP), the rate of which in the Valencian Community will drop from 10% to 9% for the purchase of second-hand homes, effective June 1, 2026. However, the 11% ITP rate for properties valued at over one million euros remains in effect.

IRNR: The Non-Resident Property Tax

Foreign buyers who are not tax residents in Spain are subject to the Non-Residents’ Income Tax (IRNR — Impuesto sobre la Renta de No Residentes). If the property is not rented out, tax is levied on an imputed income (a percentage of the cadastral value). If it is rented, tax is charged on the rental income, with a withholding rate of 19% for EU and European Economic Area citizens and 24% for all others. This tax must be declared on a periodic basis and often requires the appointment of a fiscal representative in Spain.

Total Purchase Costs: A Summary

As a general reference, a foreign buyer should budget for an additional 10% to 13% on top of the purchase price, covering transfer tax or VAT, notary fees, Land Registry fees, administrative management fees and, where applicable, estate agent commission if not borne by the seller.

The Spanish Golden Visa: what has happened to this residence permit for investors

The Spanish Golden Visa program ceased to be in effect on April 3rd, 2025.

As of that date, no new residence permits are being granted for investment purposes (including the purchase of a home costing more than €500,000).

Applications submitted before that date are processed under the previous regulations, and those who already hold this permit may retain and renew it under the conditions in effect at the time of its issuance.

Why Invest in Property in Valencia?

Valencia offers a unique set of conditions for international property investment. It is Spain’s third-largest city by population, with a diversified and steadily growing economy and a quality of life that competes directly with destinations such as Barcelona or Lisbon — but at significantly lower acquisition prices.

Here are some of the key factors driving growing interest from foreign investors:

• More competitive price per m²: average prices in Valencia remain below those in Madrid and Barcelona, creating greater potential for long-term appreciation.
• Strong gross rental yields: in Valencia’s best neighbourhoods, gross residential rental yields range between 4% and 6%, with higher peaks in areas with strong demand for tourist or short-term rentals.
• Established international growth: in recent years, Valencia has attracted a significant community of digital nomads, expats and international families, fuelling demand for quality rental properties.
• Premium neighbourhoods with strong prospects: Eixample, Pla del Real, Ruzafa, El Botànic and Los Monasterios concentrate the most exclusive supply and the most financially strong demand in the Valencian market.

Mortgages in Spain for Foreigners: Can You Get Financing?

Yes, although the conditions are more restrictive than for residents. Spanish banks do offer mortgages to non-resident foreign nationals, generally with a loan-to-value ratio of between 50% and 70% of the appraised value (compared to the standard 80% for residents). The maximum term is usually 20 years, and the interest rates applied tend to be somewhat higher.

Typical requirements include: demonstrating stable and documented income in the country of origin, holding a NIE, providing evidence of a clean credit history and, in many cases, opening a current account with the lending bank. Working with an estate agency experienced in international clients greatly facilitates the banking process, as they are familiar with which lenders offer the best conditions for each buyer profile.

Monserrate: Your Go-To Agency for Property Investment in Valencia as a Foreigner

At Monserrate, we accompany international investors and buyers through every step of the property acquisition process in Valencia — from identifying the best market opportunities, many of which never appear on public listing portals, to coordinating with notaries, administrative managers and lawyers specialising in non-residents.

As premium home agents in Valencia, our commitment is to provide you with a buying or investment experience fully tailored to your profile, your return expectations and your goals. We understand that investing in a foreign country means placing your trust in those who know the market inside out: that is why every transaction receives personalised attention, in your language and with complete transparency at every stage of the process.

Contact Monserrate to begin your property investment journey in Valencia, backed by the expertise of the right specialists.