Hi everyone! I’ve noticed more and more people on the forums discussing buying property in Spain, especially in Barcelona and Madrid. I’ve just gone through the whole process and hit a few snags, so today I want to talk about the most crucial first step: how much you really need for a down payment.
First, it’s important to understand that as non-tax residents, we face different mortgage policies compared to locals or residents with long-term permits. Banks will typically only grant us a mortgage of around 60% of the property value, and some are even more conservative, offering only 50%. This means we need to prepare a down payment of at least 40%-50% of the total property price. These must be your own funds, and you must be able to clearly explain their origin, as banks are very strict with anti-money laundering checks.
But don’t think you’re all set once you have the 40% down payment! There’s a whole host of other miscellaneous costs involved in the buying process, which typically amount to an additional 10%-15% of the property price. If you haven’t factored this into your budget for buying property in Spain, you’ll find yourself in a tight spot later on. I’ve listed the main items below for your reference.
Taxes and Expenses Related to Property Purchase
| Cost Item | Approximate Rate | Description |
|---|
| Property Transfer Tax (ITP) | 6%-10% | Depends on the region; this is the largest tax for resale properties |
| VAT (IVA) | 10% | Applies to new properties instead of ITP |
| Notary Fees | 0.2%-0.5% | A legally required procedure |
| Property Registry Fees | 0.1%-0.25% | To register the property in your name |
| Lawyer’s Fees | Approx. 1% | Highly recommended to hire one to review contracts and avoid risks |
| Mortgage Arrangement Fee | 0.5%-2% | Charged by the bank; can be negotiated |
So, all in all, a safe budget plan would be: 50% of the property price (down payment) + 15% of the property price (taxes/fees) = 65% of the total cost needs to be ready in cash. Additionally, before applying for a mortgage, make sure to get your NIE number sorted. Also, whether you’re considering the Spain’s Golden Visa or not, prepare documents like bank statements, proof of income, and tax returns from your home country in advance, and it’s best to have them officially translated. Don’t be like me, scrambling to submit extra documents at the last minute. I hope this information is helpful to you all, and I welcome any veterans who’ve already been through this to add their insights!
