How to buy property in Spain as a foreigner: a step by step guide

1. Requirements Before Buying a Property in Spain

Before signing the Public Deed, there are a few essential steps to take:

NIE (Tax Identification Number): All foreign buyers must obtain an NIE. This can be done in person at the relevant administrative office or through a Power of Attorney (POA) if you’re unable to attend in person. It’s advisable to get your NIE early in the process to avoid delays

Spanish Bank Account: A bank account in Spain is required for both the property payment and for future tax and utility payments. The bank will ask for documentation regarding the origin of the funds you plan to use to purchase the property. Be sure to understand the bank’s requirements in advance

These steps are crucial in understanding how to buy property in Spain as a foreigner.

2. Letter of Intent (LOI) and Good Faith Deposit

Once you’ve found a property you wish to purchase, the next step is to make a formal offer. This is done through a Letter of Intent (LOI), followed by a good faith deposit. The deposit is held by the real estate agency and is typically a percentage of the property’s price. Your agent will guide you on the exact amount.

If the seller accepts your offer, the LOI becomes a reservation agreement, which removes the property from the market and sets the stage for the next steps. Buying a property in Spain often involves this step to ensure both parties are committed to the transaction.

It’s highly recommended to hire a lawyer to oversee the process and ensure all legal aspects are covered.

3. The Private Arras Contract (Contrato de Arras)

The Contrato de Arras is a private agreement between the buyer and seller, detailing the property, purchase price, payment breakdown, and deadlines. At this point, the buyer usually makes a down payment, often 10% of the agreed price, which is paid to the seller’s bank account.

The contract includes an important clause: If the seller backs out of the sale, the buyer is entitled to double the down payment. If the buyer withdraws, the down payment is forfeited. Prior to signing, legal and technical checks will be carried out on the property to ensure everything is in order. This is an essential step in how to buy property in Spain as a foreigner without encountering legal issues.

4. Completion of the Public Deed (Escritura de Compraventa)

The final step is the signing of the Public Deed in front of a public notary. On this date, the remaining balance of the purchase price is paid. The notary certifies the transfer of ownership, and the deed is filed with the Spanish Tax Office and Land Registry. After signing, the buyer takes full ownership and possession of the property.

Buying a property in Spain involves several important steps, from securing the necessary documents to signing the public deed. By understanding each phase of the process—whether it’s obtaining an NIE, making an offer, or completing the legal paperwork—you can ensure a smooth and successful property purchase in Spain. Make sure to consult local experts, such as lawyers and real estate agents, to guide you through the process with ease.

If you're interested in how to buy property in Spain as a foreigner and need assistance with any part of the process, Lucas Fox is here to help. Our team of property experts and legal advisors can provide you with tailored guidance to ensure your investment is a success. Reach out to us today to start your journey towards owning property in Spain. To ensure you're fully prepared, it's important to also understand the hidden costs of buying property in Spain, which can significantly impact your overall investment. Learn more about these costs to make an informed decision every step of the way.