Your Guide to Buying a Property in Spain

Buying property in Spain is exciting — but it’s also different from the UK system. Here’s what every UK buyer should know before starting their journey.

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1. Key Legal Requirements

NIE Number
A mandatory identification number for foreigners. You need it to sign contracts, open a bank account and complete the purchase.

Spanish Bank Account
Many purchases require a Spanish account to handle payments, utilities and taxes.

Deposit & Reservation
Typically, buyers pay a reservation fee (more or less €5,000–€6,000) followed by a 10% deposit when the private contract is signed.

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2. Visas for UK Buyers

Non-Lucrative Visa (NLV)
Still available.
For those who want to live in Spain without working locally. Requires proof of sufficient funds and private health insurance.

Other Visa Types
• Digital Nomad Visa (remote workers)
• Entrepreneur / Start-Up Visa
The Golden Visa has been officially discontinued.

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3. Taxes & Fees

Estimated 12-14% on top of the purchase price, including:
• 10% Transfer tax or VAT (depending on resale vs new build)
• Notary fees
• Registry fees

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4. Currency Exchange

Exchange rates can significantly affect your budget.
We can connect you with trusted currency specialists who often save buyers thousands compared to bank rates.

5. Administrative & Tax considerations

Before Brexit, UK buyers were treated the same as EU citizens when purchasing property in Spain.
Since Brexit, UK nationals are now classified as non-EU buyers, which means different — and in some cases less favourable — financial and tax rules apply.

Below is a clear overview of what has changed and what UK buyers should be aware of.

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Mortgages for UK Buyers in Spain

Yes, UK buyers can still obtain a mortgage in Spain, but conditions for non-EU residents are stricter.

Typical conditions for UK non-resident buyers (2025):
• Interest rates: approximately 4–5%
• Maximum mortgage term: up to 20 years
• Loan-to-value: 60–70% of the purchase price
• Documentation must be officially translated and apostilled
• Stronger applications often include:
• UK-based income or assets
• Equity released from a UK property

Good to know:
Some UK banks offer international mortgage products, including:
• NatWest International
• Barclays International
• HSBC Expat

At Costa Connect, we always advise buyers to speak with both Spanish banks and UK-based international lenders before making a decision.

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Rental Income Tax for UK Owners (Post-Brexit)

This is one of the areas where Brexit has had the biggest financial impact.

Before Brexit
• Tax rate: 19% on net rental income
• Deductible costs included:
• Mortgage interest
• Community fees
• Local property tax (IBI)
• Maintenance costs

After Brexit
• Tax rate: 24% on gross rental income
• No costs can be deducted
• Applies to all non-EU non-residents

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Imputed Rental Income (Renta Imputada)

Even if a property is not rented out, Spanish tax authorities assume it generates income.

This is known as imputed income and applies to all non-resident owners.

How it is calculated:
• 1.1% of the cadastral value (if revised after 1994)
• 2% of the cadastral value (if not revised)
• Taxed at 24%

Example:

Property cadastral value: €100,000 (not revised)
• Imputed income: 2% × €100,000 = €2,000
• Tax payable: 24% × €2,000 = €480 per year

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Capital Gains Tax When Selling (UK Residents)

UK property owners must pay capital gains tax in Spain when selling a property at a profit.
• Pre-Brexit: 19%
• Post-Brexit: 24%, with no deductions allowed

Withholding rule:

When a non-resident sells a property:
• The buyer must withhold 3% of the purchase price
• This is paid directly to the Spanish tax authority
• It acts as an advance payment against capital gains tax

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