10 Legal Considerations for Foreigners Buying Property in Spain 2025

In this article we will show you what are the 10 legal considerations for foreigners buying property in Spain 2025.

While Spain remains an attractive destination for real estate investments, purchasing a property in Spain as a foreigner in 2025 can be an interesting opportunity, but at the same time requires careful attention to legal and financial regulations.

These are the points you should take into account before buying a property in Spain

INDEX

1. Understand Residency and Non-Resident Status

Whether you plan to live in Spain permanently or remain a non-resident, your legal status will affect your property purchase process. Non-residents can legally buy property in Spain, but you’ll need to obtain a Foreigner’s Identification Number, also known as an NIE (“Número de Identificación de Extranjeros”).

Tip: Apply for your NIE well before starting the purchase process, as it’s required for all legal and tax-related procedures.

2. Research Property Ownership Rights

Ensure the seller has all legal rights to sell the property. One common risk in Spain is purchasing a property with unknown co-owners or unresolved inheritance claims. Make sure to verify the clear title through the property’s Land Registry records (“Registro de la Propiedad”).

Example: A buyer once unknowingly purchased property with a dispute over inheritance rights, which caused costly legal battles to resolve.

3. Review Urban Planning Regulations

Certain properties, especially in rural areas, may not comply with urban planning regulations or may have been built without proper licensing. Illegal developments pose significant risks, including hefty fines or even demolition orders.

Advice: Consult with a lawyer or surveyor to confirm that the property has appropriate building permits.

4. Get a Legal Property Assessment

Before sealing the deal, have a notary and independent legal expert evaluate the property’s condition and documentation. This includes checking for outstanding debts, unpaid taxes, or liens tied to the property itself.

Why this matters: Hidden liabilities can transfer to a new owner, meaning you could end up responsible for someone else’s unpaid taxes or debts linked to the property.

5. Know the Costs Beyond the Purchase Price

The actual property price is just the beginning. Additional costs—such as VAT (Value Added Tax) for new properties or “Impuesto sobre Transmisiones Patrimoniales” (Transfer Tax) for resale homes—apply to the purchase. Legal fees, notary fees, and registration fees will also add to your budget.

Example Breakdown: On average, you should budget an additional 10%–12% of the property price for associated taxes and fees.

6. Work with a Trusted Legal Professional

Hiring a local, independent lawyer who specializes in Spanish property law is essential. Avoid relying solely on the seller’s or developer’s legal team, as potential conflicts of interest could arise.

Pro Tip: Choose a lawyer fluent in both Spanish and your native language to ensure you fully understand all contracts and legal implications.

7. Check Tax Obligations as a Foreign Property Owner

Foreign buyers must comply with Spanish taxation laws. For example, non-resident property owners are required to pay:

Property Tax (“Impuesto sobre Bienes Inmuebles” or IBI): Paid annually.

Non-Resident Income Tax on Imputed Rental Income (IRNR): Even if you don’t rent out the property, a notional rental income tax may apply.

Understanding these obligations will prevent surprises down the line.

8. Beware of Timeshare and Leaseback Arrangements

While timeshares and leaseback properties are legal in Spain, they require additional scrutiny. Some arrangements may include restrictive terms that affect resale opportunities, or they may not entitle you to full ownership.

Best Practice: Have your lawyer review these agreements thoroughly before committing.

9. Use a Secure Payment Method

Property transactions in Spain typically take place through escrow accounts or bank-certified checks. Avoid informal “under-the-table” payments, which are not only illegal but also raise the risk of fraud and losing your money.

Important Note: Always keep precise documentation of every payment for legal and tax purposes.

10. Understand Post-Purchase Responsibilities

After purchasing the property, you’ll need to handle post-purchase procedures, such as registering the deed in the Land Registry and setting up utilities in your name. Additionally, compliance with all tax filings for your new property is critical.

Simple Tip: Work with your lawyer to ensure all post-purchase obligations are seamlessly attended to.

Other Legal Considerations

Community Fees: If your property is part of a community of owners, ensure you are aware of any ongoing community fees or shared expenses. These can cover maintenance of shared spaces, amenities, or infrastructure.

Inheritance Laws: Be mindful of Spain’s inheritance laws, as they can vary significantly from other countries. It’s advisable to prepare a will in Spain to simplify the process for your heirs.

Mortgage Clauses: If taking out a mortgage, review all clauses carefully to ensure there are no hidden fees or unexpected terms, particularly concerning interest rates or early repayment penalties.

Renting Out Property: If you plan to rent out the property, be aware of local rental laws, including tenant rights, rental caps, and tax obligations on rental income.

Renovation Permits: If you plan to renovate the property, be sure to obtain the necessary permits and permissions from local authorities. Failure to do so can result in costly fines and legal issues.

Capital Gains Tax: When selling the property, be aware of capital gains tax obligations in both Spain and your country of residence. Your lawyer can advise you on any applicable deductions or exemptions.