by Adam Hejducki 
The number of property purchases by Poles in Spain in 2024 exceeded the previous year.
There was a significant increase in Poles’ interest in the Spanish property market in 2024 and so, in the first three quarters of 2024, Poles purchased 3101 properties, an increase of 26% compared to the same period in 2023.
In the third quarter of 2024, Poles ranked fourth among foreign buyers of property in Spain, with a share of 5.32%.
The Costa Blanca and Costa del Sol regions are hugely popular, with foreign buyers accounting for a significant proportion of buyers.
In summary, buying a property in Spain involves certain procedures and costs, which vary depending on the region and type of property.
Buying a property in Spain is a process involving several key steps and involving certain fees and taxes. Below are the procedures for buying a property in Spain:
1. Property selection: The decision to buy a specific property, whether from the primary market (new construction) or secondary market (second-hand).
2. NIE number (Número de Identificación de Extranjero): Foreigners must obtain the Foreigner Identification Number necessary for the transaction.
3. Preliminary contract (Contrato de Arras): Signing of a reservation contract and payment of a down payment (usually 10% of the price), which secures the property for the buyer.
4. Examination of the legal status of the property: Checking that the property is not encumbered by debts, mortgages or other obligations.
5. Finalisation of the transaction: Signing of the deed (Escritura Pública) in the presence of a notary, which formalises the transfer of ownership.
6. Registration of ownership: Submission of the notarial deed to the Real Estate Registry (Registro de la Propiedad) to officially register the new owner.
Fees and taxes related to the purchase of the property: Properties from the primary market:
VAT (IVA): 10% of the purchase price (except in the Canary Islands, where it is 7%).
Asset transfer tax (AJD): Depending on the region, between 0.5% and 1.5% of the purchase price.
Secondary market properties: Transfer tax (ITP): The rate depends on the region; for example, in the Valencia region it is 10%, in Andalusia 7% and in the Canary Islands 6.5%.
Notary fees:Approximately 0.2%-0.5% of the value of the property.
Real Estate Registry fees:Approximately 0.1%-0.25% of the value of the property.
Additional costs:May include translation fees, lawyer’s or estate agent’s fees.
Entering into a mortgage with a Spanish bank for the purchase of a property for a Polish national is possible, although it involves several specific requirements and procedures.
Spanish banks require an extensive set of documents from foreigners to assess the customer’s creditworthiness. The standard documents are:
Identity documents:
Valid passport or identity card.
NIE (Número de Identificación de Extranjero) number, which is necessary for all financial transactions in Spain.
Proof of income and employment:
Certificate of employment or last 3 payslips (if employment is under an employment contract).
Declaration of economic activity and tax documentation (for self-employed persons).
Annual tax return (PIT in Poland) or equivalent.
Credit history:
Certificate of no loan arrears in Poland (BIK or relevant documents).
Bank statements:
Bank statements for the last 6-12 months.
Costs related to the purchase of the property:
Preliminary contract for the purchase of the property (Contrato de Arras).
Valuation of the property (the bank may itself commission an independent valuer).
Banks in Spain assess creditworthiness on the basis of:
Net income: Monthly loan charges (in Poland and Spain) cannot usually exceed 35%-40% of net income.
Debt ratio:The bank takes into account other financial obligations in the borrower’s country of residence.
Property value: Spanish banks usually offer a loan of 60%-70% of the value of the property to foreigners. The rest of the amount must be covered by the borrower’s own funds.
Banks offer different types of mortgages:
With variable interest rates: Based on the EURIBOR index, to which the bank’s margin is added.
With fixed interest rates: The instalment is fixed for the entire term of the loan.
Mixed: The initial years of repayment have a fixed interest rate and later it is variable.
Once the loan application is approved, the bank makes a conditional offer. Then:
The bank commissions an appraisal of the property (the cost is paid by the borrower, approximately EUR 300-500).
A final loan agreement is drawn up, which includes details of the loan amount, repayment period, interest rate and additional conditions.
The loan agreement must be signed in the presence of a Spanish notary. On the day of signing:
The mortgage is registered in the Mortgage Registry (Registro de la Propiedad).
The bank transfers the funds to the seller or to the account indicated in the contract.
Additional fees must be taken into account when concluding the mortgage:
AJD tax: 0.5%-1.5% of the loan value, depending on the region.
Notary and registration costs: approximately EUR 600-1,000.
Loan origination fee: Typically between 0.5% and 1% of the loan amount.
Insurance: Property insurance is required, sometimes also life insurance.
Repayment of the loan is in euro. Banks allow instalments to be automatically drawn from a bank account opened in Spain.
Important notes:
Own contribution: Spanish banks expect foreigners to contribute more (30%-40%).
EURIBOR index: it is worth keeping track of this index as it affects the instalments for variable rate loans.
Legal assistance: it is advisable to use a lawyer specialised in Spanish property law to safeguard the interests of the buyer.
By preparing the right documentation and following the procedures, the process of obtaining a mortgage in Spain can go smoothly, although it differs somewhat from Polish standards.
Hejducki Real Estate has extensive experience in the Spanish real estate market and will guide you through the entire process of purchase and related formalities. We will find for you your dream house or flat in Spain and we will also help you with the care after the purchase.
Feel free to contact us.
