Dreaming of Living in Spain? How Buying a Property Works Step by Step

Have you ever lain by the sea, looked at a house next to the beach, and wondered what it would be like to stay there — or thought that this is exactly the kind of place you’d love to return to regularly? Have you dreamed of spending your free time surfing, or simply watching the waves and listening to the sound of the ocean? Maybe you’ve even considered buying an apartment as an investment property — a place you could occasionally escape to for a holiday while also generating additional income.

If so, then this article is exactly for you. We’ll go through the key points you need to consider before buying a property abroad.

In our case, everything started during a service meeting with a client, where the conversation turned to the client’s intention to buy a house or apartment in Spain. Since my father lives in Spain and we had already dealt with several property purchases there together in the past, we were able to connect the client with a trusted local real estate agent who has known the local market inside out for over 20 years.

Before the trip, we selected several interesting properties with the client and arranged viewings so we could inspect everything not only virtually but also in person on site. My role during the trip was not only to translate, but above all to help keep things grounded — because when choosing a property, emotions often play a major role, and it’s important to maintain a rational perspective.

So what exactly did we have to pay attention to during the selection process and the following steps?

Besides the standard checks regarding the condition of the house, utilities, sewage systems, and estimating potential renovation costs, there were also many financial aspects to consider.

It quickly became clear how important it is to deal with details that may not be obvious at first glance.

For example, not all homeowners’ associations allow short-term rentals — which is a crucial factor if you plan to buy an investment property. In Spain, there is also the phenomenon of so-called “okupas” — illegal occupants who take over properties. If this happens, eviction can be quite complicated, so it is necessary to assess the risk associated with a specific property.

It is equally important to find out the amount of monthly maintenance fees, the condition of the reserve fund, and how many owners within the community are in debt. Apartments located in gated residential complexes often prove to be a safer option because they tend to be financially more secure.

Utilities are another important topic. I recommend monitoring them regularly — most providers have their own apps where you can track consumption. Price differences can be significant. For example, we encountered a case where monthly energy costs were around €120 before switching providers, but after the change they dropped to approximately €40.

Finally, it is also necessary to account for taxes. In Spain, taxes are paid not only when purchasing a property but also annually — to the municipality, province, and the state.

Opening a bank account and handling other administrative matters can usually be arranged through the real estate agency. Just like in the Czech Republic, it is important to work with trusted agents and lawyers. However, it is worth knowing that in Spain contracts are usually not negotiated extensively, and working hours (especially for lawyers) can be limited. Another key contact is an insurance specialist — ideally someone who can handle everything remotely. Fortunately, we already had such contacts, which made the entire process much easier.

In the following section, we’ll look at a specific checklist of things to watch out for when buying property in Spain.

Fees When Buying Property in Spain

When purchasing property in Spain, you need to take into account taxes and fees, which vary depending on whether you are buying a new-build property (from a developer) or a resale property (“second-hand”).

New-Build Property (Purchase from a Developer)

VAT (IVA – Impuesto sobre el Valor Añadido)

• Usually 10% of the purchase price for residential properties
• Up to 21% for commercial properties or land

Stamp Duty (AJD – Impuesto de Actos Jurídicos Documentados)

• A tax for the legal registration of the transaction
• Varies by region, typically between 0.75% and 1.5%
• Examples: Andalusia: approx. 1.2%, Catalonia: approx. 1.5%

Resale Property (Secondary Market)

Property Transfer Tax (ITP – Impuesto de Transmisiones Patrimoniales)

• Replaces VAT and AJD
• The rate depends on the region
• Approximate rates: Andalusia: 7%, Valencia / Catalonia: 10%, Madrid: 6%–7%

Other Fees (Applicable in Both Cases)

In addition to taxes, you should also expect additional costs, which usually amount to approximately 3%–5% of the purchase price:

• Notary fees – approx. 0.1%–0.5%
• Land Registry (Registro de la Propiedad) – approx. 0.1%–0.4%
• Lawyer (highly recommended) – usually around 1% + VAT
• Gestoría (administrative service) – handling taxes, registrations, and possibly mortgage arrangements

Overall, the total costs associated with purchasing property in Spain usually range between approximately 10% and 15% of the purchase price.

Example: Buying an Apartment in Spain Using Andalusian Rates (ITP 7%, VAT 10%, AJD 1.2%)

As the table shows, with a resale property you should expect additional costs of approximately 9%, while for a new-build property the additional costs are around 13%.

What Should You Watch Out For?

Besides tax rates (especially ITP and AJD) and other fees, keep in mind that each autonomous region in Spain has its own rules. Always verify the current conditions for the specific area you are considering (e.g. Andalusia vs. Madrid).

So now you have a general overview of what to expect. And if you are one of those dreaming of a sunny home abroad and need help with the process or financing of property abroad, feel free to contact us.