Buying Property in Spain: A Guide for UK Buyers

Post-Brexit Changes for UK Buyers

Since 1 January 2021, UK nationals are classified as third-country (non-EU) citizens in Spain. The practical impacts include:

• 90-day rule: UK citizens can stay in Spain for a maximum of 90 days within any 180-day period without a visa. Previously, there was no limit for EU citizens.
• Residency applications: UK nationals must now apply for a visa or residence permit to live in Spain long-term, using the same process as other non-EU nationals.
• Non-resident tax rates: UK property owners in Spain are subject to the non-EU non-resident income tax rate of 24% on rental income, compared to 19% for EU residents.
• Healthcare: UK property owners without Spanish residency no longer have automatic access to the Spanish public health system. Private health insurance is required for visa applications.
• Property ownership rights: No change. UK nationals can still purchase, own and sell property in Spain without restrictions.

Getting Your NIE Number

The NIE (Número de Identidad de Extranjero) is the single most important document for any property transaction in Spain. It is required for:

• Signing property deeds
• Opening a Spanish bank account
• Paying taxes in Spain
• Setting up utility contracts

You can apply at a Spanish consulate in the UK (London, Manchester or Edinburgh) or at a National Police station (Comisaría) in Spain. Many buyers grant power of attorney (poder notarial) to their Spanish lawyer to handle the application. Processing typically takes 1–4 weeks.

Step-by-Step Buying Process

1. Obtain your NIE and open a Spanish bank account.
2. Appoint a Spanish lawyer (abogado) who is independent of the estate agent and developer. Budget €1,500–3,000 for legal fees.
3. Find and agree on a property. Make a reservation deposit (€3,000–6,000) to take the property off the market.
4. Due diligence: Your lawyer checks the Nota Simple (land registry extract), confirms no debts or encumbrances, verifies planning permissions, and checks community charges.
5. Sign the Contrato de Arras (preliminary contract). Pay 10% deposit. If you withdraw, you forfeit the deposit. If the seller withdraws, they must return double.
6. Arrange financing if needed. Spanish mortgage pre-approval should be obtained before signing Arras.
7. Sign the Escritura Pública (public deed) at the notary. Pay the balance, taxes and fees. The notary verifies identities and reads the deed aloud.
8. Register the property at the Land Registry (Registro de la Propiedad). Your lawyer handles this. Registration takes 1–3 months.

Costs and Taxes

Spain Golden Visa

Spain's Golden Visa programme grants residency to non-EU nationals who invest at least €500,000 in Spanish property. Key points for UK buyers:

• Minimum property investment: €500,000 (can be one or more properties)
• The initial visa is valid for 2 years, renewable for 5-year periods
• No minimum stay requirement - you can maintain the visa while living in the UK
• Covers spouse, children under 18, and dependent parents
• Provides the right to work in Spain
• Path to permanent residency after 5 years and citizenship after 10 years

Note: The Spanish government has signalled potential changes to the Golden Visa programme. Check current status before relying on this route.

Mortgages for UK Buyers

Spanish banks lend to non-residents, including UK buyers. Typical terms:

• LTV: 60–70% for non-residents (compared to 80% for residents)
• Term: Up to 20–25 years, with a maximum borrower age of 70–75 at maturity
• Interest rates: Fixed rates of approximately 3–4% for non-residents (2026)
• Documentation: Last 3 years of UK tax returns, 6 months of bank statements, proof of income, and a credit report
• Valuation: The bank commissions an independent valuation (tasación), costing €300–600

UK and Spanish Tax Obligations

Owning property in Spain creates tax obligations in both countries:

• Spanish non-resident income tax: 24% on net rental income (non-EU rate). If the property is not rented, you pay imputed income tax of 24% on 1.1–2% of the cadastral value.
• IBI (council tax): Annual property tax, typically 0.4–1.1% of cadastral value.
• UK income tax: Declare Spanish rental income on your Self Assessment. Claim a credit for Spanish tax paid under the UK–Spain double taxation treaty.
• Capital gains: Spain taxes non-residents at 19% on property gains. The UK also taxes the gain, with a credit for Spanish tax paid.
• Wealth tax (Impuesto sobre el Patrimonio): Applies to non-residents on Spanish assets above €700,000. Rates vary by region, from 0.2% to 3.5%.

Popular Regions

• Costa del Sol (Andalusia): Marbella, Estepona, Fuengirola. Established British community, 320+ days of sunshine, mature rental market.
• Costa Blanca (Valencia): Alicante, Benidorm, Jávea. Lower prices than Costa del Sol, strong UK flight connections.
• Balearic Islands: Mallorca, Ibiza, Menorca. Premium market, strict rental licence rules.
• Barcelona: Urban lifestyle, strong rental demand. Tourist rental licence moratorium in place.
• Canary Islands: Tenerife, Lanzarote. Year-round climate, different tax regime (IGIC instead of IVA).

Risks and Considerations

• 90-day stay limit: Post-Brexit, overstaying can result in fines and entry bans
• Illegal builds: Some coastal properties were built without proper planning permission. Always verify the Nota Simple and building licence
• Currency risk: EUR/GBP fluctuations affect both purchase price and ongoing costs
• Rental regulations: Tourist rental licences are increasingly restricted in popular areas. Check regional rules before buying to let
• Non-resident tax burden: The 24% non-EU tax rate on rental income is higher than the 19% EU rate, reducing net returns for UK owners
• Inheritance: Spanish succession tax can be high, and rules vary by autonomous community. Take specialist advice on wills and estate planning