Buying Property in Spain: Everything You Need to Know in 2025

Since moving to Spain in 2019, I've been following the property market closely, both as a resident and as an investor. 

The warm, welcoming people, sunny summers with beautiful beaches and mild winters make Spain an irresistible place to live or invest.

It's not just the lifestyle that attracts people; Spain offers incredible opportunities for investment and passive income through short and long term rentals. 

Properties are available at prices that will surprise even the most experienced investor. With over 80 million tourists expected to visit Spain by 2024, it's no wonder the country remains a hot spot for property.

However, the Spanish government is working to cool the market by introducing new regulations on short-term rentals to protect long-term residents from price hikes driven by tourist demand. 

While the market remains attractive, it's not always easy to navigate. Many foreigners are unaware of risks such as okupas (squatters), the potential of certain regions, the impact of droughts and other critical factors to consider when buying a holiday home, apartment or investment property.

In this article, we'll look at the different types of property available, their pros and cons, the best regions to consider, mortgage options for non-residents and the additional costs you'll need to consider. 

Let's dive in and help you make an informed decision about buying property in Spain.

One of the biggest benefits of buying property in Spain is its incredible weather, especially for those escaping the chill of the UK and Northern Europe. With an average of 300 days of sunshine a year, Spain offers the kind of climate that makes you want to spend every moment outdoors.

Another highlight is the Mediterranean cuisine - a unique combination of delicious, fresh and healthy options at surprisingly affordable prices. From tapas to seafood, eating in Spain is not just a meal, it's an experience that feels luxurious without breaking the bank.

Spain is also rich in culture and entertainment. The country is home to countless museums, castles, historic sites, zoos and other attractions, making it a fantastic destination for tourists all year round. This constant influx of visitors presents an excellent opportunity for investors to capitalise on both the long and short term rental markets.

For example, many properties on the Costa del Sol come with tourist licences, swimming pools, gyms and even reception services, making them ideal for hosting guests.

Managing such properties remotely is straightforward thanks to the availability of BnB management companies and professional cleaning services. This means you can enjoy the benefits of a hands-off investment, while still providing first class hospitality to your tenants.

What makes Spain even more attractive is the balance it offers: a relaxed, quality lifestyle with a lower cost of living, and the potential to turn your property into a thriving long-term business. With the right property, you can enjoy the best of both worlds - a place to call home and a smart investment for the future.

In addition, Spain has an excellent transport infrastructure, with well-connected airports, trains and motorways, making it easy for tourists to explore the country and for you to stay in touch with your investment wherever you are.

Okupa Risks: The illegal occupation of properties, known as "okupas," remains a concern. In 2023, Spain recorded approximately 15,289 cases of property occupation, a slight decrease from previous years. Regions like Catalonia, particularly Barcelona, and Madrid are among the most affected areas. This shows that it is important to secure your property and understand local laws to reduce such risks.

However, if you are looking for an exceptionally good deal on a property in Spain, an occupied property could be a great opportunity. Just think of all the extra costs you could incur if you tried to evict the current tenants.

Abandoned Areas: Spain has a lot of empty properties. According to the consumption of electricity in a full year in 2021, 3,837,328 dwellings were classified as empty. Many of these are in rural or less developed regions, which may lack essential infrastructure and services. Investing in such areas requires thorough research to assess the potential for future development and the viability of your investment.

Competitive Market Environment: Post-pandemic, the Spanish property market has become increasingly competitive, especially in major cities and popular tourist destinations. High demand has led to rising property prices, making it challenging to find affordable options. This competitive environment means you need to make quick decisions and be ready to act when you see a good property that ticks all your boxes.

Properties with debts or legal issues: Some properties may come with existing debts, legal issues, or structural problems. Debts in Spain are held against the property itself, not the owner, which means that any charges or liens against the property immediately become the responsibility of the new owner. It's essential to conduct comprehensive checks, including reviewing the property's legal status, ensuring there are no outstanding debts, and assessing the structural integrity to avoid unforeseen liabilities.

Because of all this, banks are now stricter about lending, often requiring a deposit of at least 20% of the property's value. This means you need to have a lot of money ready to spend and be very careful with your finances.

Also, because there are so many investment-related loans, there might be a change in the market price. This shows how important it is to do your research and plan carefully before buying property in Spain.

Spain offers a diverse range of properties to suit every lifestyle and investment goal. From rural houses and small ranches with olive groves to city-center apartments, bungalows, holiday villas, and luxury estates, there’s something for everyone. The key is to align your property choice with your personal needs and objectives.

Before buying, it's important to consider why you're buying the property. If your goal is short-term rental income, focus on major cities such as Madrid or Barcelona, or popular tourist destinations such as the Costa del Sol, where you can achieve higher occupancy rates throughout the year. 

For a peaceful personal retreat, bungalows, villas or plots in quieter areas may be ideal. Those looking for an eco-friendly lifestyle can explore rural houses or off-grid properties in regions such as the Pyrenees or Asturias, perfect for self-sufficient living surrounded by nature.

If you're looking for a long-term rental, consider properties close to business centres such as Madrid or Barcelona, where families and professionals often look for a home. Larger properties with three or more bedrooms are particularly attractive to renters in these areas. 

For luxury property buyers, holiday villas in places like Marbella or Ibiza offer both exclusivity and excellent rental potential during peak tourist seasons. Other factors to consider include tourist licences, local amenities, maintenance costs and legal considerations. 

By aligning your choices with your goals and researching the area thoroughly, you can find the perfect property that meets your needs and adds value.

Below we highlight some of the most popular and sought after regions for buying property in Spain, providing you with a broad overview of the different types of property and their unique characteristics.

We use data and insights from Indomio.es, one of the most comprehensive property statistics platforms in Spain. 

This will help you to better understand the market and make informed decisions tailored to your needs.

Buying property in Spain is relatively straightforward, whether you are a resident or a non-resident.

However, the government plans to introduce up to 100% tax on property purchases for non-EU residents.

• The first requirement is to obtain a NIE (Número de Identificación de Extranjero), a tax identification number for foreigners, which is essential for any property transaction.

• Non-residents can own property in Spain without restriction, but you'll need a Spanish bank account to handle payments and expenses such as taxes and utility bills.

• Both residents and non-residents are required to pay property transfer tax, notary and registration fees during the purchase process.

• Non-residents should also be aware of additional taxes such as non-resident income tax (IRNR) if the property generates rental income.

• If financing is required, Spanish banks generally offer mortgages to non-residents, but require a larger deposit, typically 30-40% of the property value, than residents.

Owning a property as a resident can offer certain tax benefits, including deductions for primary residences, so understanding your residency status is key to maximising your investment.

When financing a property in Spain, several mortgage options are available through trusted funding partners, including major Spanish banks such as Santander, BBVA, CaixaBank and Bankinter. 

Non-residents can typically secure a mortgage for up to 60-70% of the property's value, while residents can qualify for up to 80% or even 90%. Most banks require a minimum deposit of 10-30% of the property value for residents and up to 40% for non-residents. 

Idealista.com, a popular property listings platform, reports that mortgage rates in Spain are currently competitive, averaging around 3-4% in 2024. The exact rate depends on the type of loan and your financial situation. Some banks offer fixed-rate mortgages for long-term stability, or variable-rate mortgages linked to Euribor, which can be advantageous during periods of low interest rates.

In addition to funding, many mortgage products come with additional services to protect your investment, such as home insurance, life insurance tied to the mortgage and payment protection plans. These options not only increase security, but also make your investment more resilient to unforeseen events. 

Before you commit, it's important to compare offers from different banks, negotiate terms and understand any associated fees, such as arrangement fees and early repayment penalties, to ensure you get the best deal for your situation.

In addition to the deposit, buyers should allow for additional closing costs, which can add around 10% to the price of the property. 

For example, for a €220,000 property, here's a breakdown of typical costs:

• Notary fees: €1,100
• Tax consultancy: €660
• Registry fees: €440
• Purchase tax (ITP): €17,600
• Title search fees: €50
• Property valuation fees: €440

These amounts can vary depending on the type of property, services used and region, so it's wise to consult a professional to estimate the full costs based on your specific situation.

Buying property in Spain offers a unique opportunity to enjoy a vibrant lifestyle, benefit from a favourable climate and take advantage of a dynamic property market. With its stunning landscapes, rich culture and year-round tourism, Spain offers a promising setting for both personal retreat and profitable investment.

The benefits of investing in Spain are clear: the beautiful weather, affordable Mediterranean lifestyle and strong rental demand make it a top choice for buyers from around the world. 

However, navigating the market requires careful planning and an awareness of potential pitfalls such as okupa risks, abandoned areas and the complexities of the competitive property market.

Property prices vary greatly depending on the region and type of property, with average prices per square metre ranging from €1,200 in the Pyrenees for rural properties to €5,000+ in Mallorca for luxury properties. 

Additional costs such as taxes, notary fees and property valuation can add around 10% to the purchase price, so budget accordingly.

Whether you are a resident or non-resident, Spain offers flexible mortgage options through trusted banks such as Santander and BBVA. 

While non-residents may face higher deposit requirements (30-40%), mortgage rates remain competitive and banks often offer additional benefits such as insurance and payment protection to safeguard your investment.

Ultimately, the key to success is aligning your purchase with your goals - whether it is a quiet personal retreat, a long-term rental property or a high-yield tourist rental.

By understanding the local market, researching regions and property types, and preparing financially, you can enter the Spanish property market with confidence and make your dream of owning a home in Spain a reality.