Buying Property in Spain: 10 Pitfalls Foreign Buyers Must Avoid
The dream of a life in the sun drives hundreds of foreigners every year to buy property in Spain. But what starts as a dream can quickly become a nightmare if you're not aware of the many pitfalls lurking in a Spanish property purchase.
Unlike more regulated property markets, the Spanish real estate market is characterized by significantly fewer consumer protection rules, complex administrative procedures, and unfortunately also some "cowboy" methods from both sellers and agents.
Through my years as a lawyer in Spain, I've seen countless examples of foreigners who bought property without proper legal advice—with expensive consequences. Some bought houses with illegal extensions that had to be demolished. Others discovered hidden debt on the property after purchase. Still others lost their deposit due to misunderstood contract provisions.
In this comprehensive guide, I review the 10 most common pitfalls in Spanish property purchases—and most importantly: how to avoid them.
Pitfall #1: Buying Without a Lawyer
This is the biggest and most costly mistake foreign property buyers make in Spain. Far too many trust that the agent "handles everything" and simply sign the papers presented to them.
"The Agent Handles Everything" - A Dangerous Illusion
| In Your Home Country | In Spain | |----------------------|----------| | Estate agents often regulated | Agents represent the SELLER, not you | | Consumer protection | Agent's fee paid by seller (2-5%) | | Trust in the system | Primary interest is closing the deal |
I've seen countless examples of agents who failed to inform buyers about significant problems with the property because it would threaten the sale.
Why an Independent Lawyer is Essential
An independent Spanish lawyer working for YOU will:
Before contract signing:
- ✅ Thoroughly check property records in Registro de la Propiedad (land registry)
- ✅ Verify seller's ownership rights
- ✅ Reveal any debt or encumbrances on the property
- ✅ Check for illegal extensions or modifications
- ✅ Review cadastral information and area
During contract negotiation:
- ✅ Ensure the contract protects your interests
- ✅ Negotiate terms and conditions
- ✅ Ensure correct deposit handling
- ✅ Review and explain ALL contract provisions in your language
At closing:
- ✅ Be present at the notary
- ✅ Ensure correct payments
- ✅ Check all documents before signing
- ✅ Follow up on registration
Typical Fees
| Purchase Price | Fee (1-1.5%) | + VAT (21%) | Total | |----------------|--------------|-------------|-------| | €200,000 | €2,400 | €504 | €2,904 | | €300,000 | €3,600 | €756 | €4,356 | | €500,000 | €6,000 | €1,260 | €7,260 |
This may seem expensive, but compared to the security and potential savings it provides, it's a very sensible investment.
Pitfall #2: Illegal Extensions and Modifications
This is perhaps the most widespread problem with Spanish properties—and unfortunately very difficult to detect for an inexperienced buyer.
A Common Phenomenon
In Spain, it is extremely common for properties to have modifications or extensions that are not legal:
- Pool built without building permit
- Covered terrace or "winter garden"
- Extra bedroom in the basement
- Carport or garage
- Conservatory or kitchen extension
Often these modifications were made many years ago, and the seller will reassure you that "it's never been a problem." But it's a ticking time bomb.
Why It's a Problem
| Risk | Potential Consequence | |------|----------------------| | Municipal fines | €5,000-30,000 or more | | Demolition order | You may be forced to remove the extension | | Resale problems | Future buyers will discover the issue | | Insurance doesn't cover | Damage to illegal parts is not insured | | Loan problems | Banks won't lend against illegal square meters |
How to Check
Your lawyer should verify:
- Nota Simple from Registro de la Propiedad - shows property registration, compare with actual buildings
- Licencia de Primera Ocupación - occupancy permit showing approved buildings
- Cadastral Registration - aerial photos show actual construction
- Physical inspection - by experienced architect or surveyor
Options If There Are Illegal Parts
| Option | Description | |--------|-------------| | Require legalization before purchase | Seller obtains retrospective permit (6-12 months, €3,000-15,000) | | Negotiate price reduction | Get discount equivalent to cost + risk (typically 1.5-2× legalization cost) | | Walk away | If the problem is too big or seller won't cooperate |
⚠️ IMPORTANT: Get explicit written confirmation in the contract about what the seller guarantees regarding the legality of all buildings and extensions.
Har du spørgsmål til din situation?
Få en gratis og uforpligtende vurdering af din sag.
Pitfall #3: Hidden Debt on the Property
Here's a shock for many foreign buyers: In Spain, certain types of debt follow the property, not the owner. This means you as the new owner take over the debt, even though the previous owner created it.
Which Debt Follows the Property?
| Debt Type | Details | |-----------|---------| | Unpaid IBI (municipal property tax) | Last 4 years of unpaid IBI encumber the property | | Debt to Homeowner Association | Unpaid community fees with no time limit—entire historical debt | | Unpaid Plusvalía | Municipal capital gains tax from previous sale | | Unpaid Utilities | Water, electricity, waste—risk of supply disconnection |
How to Protect Yourself
Your lawyer should obtain:
- Nota Simple from Land Registry (max 1 week old)
- Certificate from Homeowner Association - written confirmation of no debt
- IBI Receipt - last year's paid IBI plus direct municipal confirmation
- Debtor Declaration from Seller - seller declares in writing there is no debt
💡 TIP: Retain part of the purchase price (typically €3,000-5,000) until all documents proving full payment are provided.
Pitfall #4: Signing Arras Contract Too Quickly
The Spanish purchase process is different, and many foreigners underestimate the seriousness of the Arras contract (deposit agreement).
What is Arras?
Arras (Contrato de Arras) is a legally binding preliminary contract where:
- Buyer pays a deposit (typically 10% of the price)
- The transaction is binding for both parties
- A date for the final transaction is set
Types of Arras:
| Type | Consequence of Withdrawal | |------|---------------------------| | Arras Penitenciales (most common) | Buyer loses deposit (100%); Seller must return double (200%) | | Arras Confirmatorias | No one can withdraw; breach leads to lawsuit | | Arras Penales | Functions as penalty for breach |
No Cooling-Off Period
⚠️ CRITICAL: There is NO cooling-off period in Spain! The Arras contract is binding from the moment you sign. If you withdraw, you lose your deposit (typically €30,000-50,000).
When Can You Withdraw Without Loss?
Only if:
- Suspensive conditions not fulfilled (e.g., bank rejects loan)
- Seller has breached (significant undisclosed defects, can't deliver clear title)
My Clear Recommendation
- Make a reservation agreement first (Reserva) - smaller amount (€1,000-3,000), gives you time for investigations
- Have your lawyer investigate EVERYTHING before Arras
- Secure financing before Arras
- Negotiate suspensive conditions in Arras
- Only then: Sign Arras
Pitfall #5: Trusting Verbal Agreements
"We'll sort that out afterwards", "There's no problem with that", "We can change it after the notary"—these phrases should set off alarm bells.
In Spain, Only Written Agreements Count
Spanish legal practice is crystal clear: What is not written in the contract does not exist.
Items that MUST be in writing:
| Category | What to Include | |----------|-----------------| | Inventory List | All furniture specified, kitchen equipment, garden furniture, A/C units, curtains, lamps | | Condition at Handover | Property delivered in same condition as viewing; known defects specified | | Payment Terms | Exact amounts and payment dates; who pays what costs | | Handover Date | Exact date; time for key handover; what happens if seller isn't ready | | Seller Guarantees | No hidden debt; all extensions legal; no pending lawsuits; utilities paid and working |
💡 Red Flag: If anyone says "It's not normal to have such a detailed contract"—ask yourself: Why don't they want it in writing?
Pitfall #6: Not Checking the Homeowner Association
If you're buying an apartment, townhouse, or villa in a community complex, it's absolutely crucial to thoroughly investigate the Comunidad de Propietarios (homeowner association).
What Many Forget to Check
| Issue | Risk | |-------|------| | Pending Lawsuits | Costs may be distributed among all members | | Planned Major Expenses | Special contributions can be €5,000-20,000 per property | | Financial Status | Many members in arrears? Increasing fees? | | Rental Rules | May you rent out? Short-term? New rules require 3/5 majority |
Request Meeting Minutes
Your lawyer should obtain:
- Last 2 years of meeting minutes
- Latest accounts
- Budget for coming year
- List of members in arrears
Warning Signs
- ❌ More than 20% of members in arrears
- ❌ No savings in the association
- ❌ Pending lawsuits against the association
- ❌ Planned expenses over €10,000 per property
Pitfall #7: Forgetting NIE Number in Time
The NIE number (Número de Identificación de Extranjero) is your Spanish identification number as a foreigner. Without NIE, you cannot buy property in Spain.
Why It's a Problem
Many discover the need for NIE only when ready to sign at the notary—but by then it's too late.
Consequences:
- Seller becomes impatient or annoyed
- Other buyers may come along
- Worst case: Seller withdraws, you lose deposit
- Extra costs for new notary appointment
Process and Timeline
| Method | Processing Time | Notes | |--------|-----------------|-------| | In Person in Spain | 1-4 weeks | Book appointment at Oficina de Extranjería or Police Station | | Via Consulate | 4-8 weeks | More expensive, may still need to collect in Spain |
💡 Recommendation: Apply for NIE AS SOON AS you start seriously looking at properties.
Pitfall #8: Underestimating the Costs
One of the biggest surprises for foreign property buyers in Spain is the extent of extra costs beyond the purchase price itself.
What Does It Cost Beyond the Price?
For Resale Property:
| Cost | Percentage | Example (€300,000) | |------|------------|-------------------| | ITP (Transfer Tax) | 6-10% | €21,000-30,000 | | Notary | 0.5-1% | €1,500-3,000 | | Registration | 0.5-1% | €1,500-3,000 | | Lawyer | 1-1.5% | €3,000-4,500 | | Gestor | Fixed | €500 | | TOTAL | ~10-15% | ~€30,000-45,000 |
ITP varies by region:
- Andalusia: 7% (rising scale, up to 10% over €400,000)
- Valencia: 10%
- Madrid: 6%
- Catalonia: 10%
- Balearic Islands: 8-11%
Annual Ongoing Costs
| Cost | Typical Amount | |------|----------------| | IBI (municipal tax) | €300-1,000/year | | Basura (waste) | €100-300/year | | Community Fees | €300-3,000/year | | Insurance | €400-1,200/year | | Utilities | €1,200-3,000/year | | IRNR (non-resident tax) | €200-500/year |
The Real Price
For a €300,000 property in Andalusia:
- Advertised price: €300,000
- Purchase costs (12%): €36,000
- Total investment: €336,000
- First year's ongoing expenses: €2,500
- Total first year: €338,500
You need €338,500—not €300,000.
Pitfall #9: Not Making a Spanish Will
This is one of the most overlooked aspects of buying property in Spain—and one of the most important.
Why a Spanish Will is Essential
| Without Spanish Will | With Spanish Will | |----------------------|-------------------| | Your home country will doesn't work automatically | Faster probate (3-6 months vs 12-24 months) | | Must be translated, legalized with apostille | Lower costs | | Spanish authorities may reject it | No complications |
Spanish vs. Home Country Will
You need BOTH wills:
- Spanish will: For your property in Spain, Spanish bank accounts, Spanish assets
- Home country will: For your property in your home country, home country bank accounts
The two wills must be coordinated with no conflicting provisions.
Choice of Law - Protect Your Rights
A crucial element in your Spanish will is choice of law.
Spain has very different inheritance rules:
- Forced heirship to children: 66.7% (vs. 25% in many countries)
- Spouse is NOT a forced heir in Spain
Your Spanish will should contain:
"I choose [my nationality] law as the applicable law choice for my inheritance pursuant to the EU Succession Regulation."
Cost: €350-700 (one-time)
This can save your heirs thousands of euros and many months of waiting time.
Pitfall #10: Using a Lawyer from Your Home Country
This final pitfall is more subtle but no less important.
Why a Home Country Lawyer Isn't Enough
| Problem | Consequence | |---------|-------------| | Doesn't know Spanish property law | Can't detect local issues | | Cannot act locally in Spain | No access to Spanish registries | | No local presence | Can't meet at notary, contact authorities | | You end up paying double | Home country lawyer for coordination + still need local Spanish lawyer |
What a Local Lawyer with Your Language Skills Gives You
- Authorized in Spain - Member of Colegio de Abogados, trained in Spanish law
- Speaks Your Language - Can explain complex legal matters clearly
- Has Office in Spain - Can attend notary, direct access to registries
- Knows Cross-Border Issues - Understands your expectations and concerns
Red Flags When Choosing a Lawyer
- ⚠️ Lawyer is "affiliated" with the agent (conflict of interest)
- ⚠️ Fee seems unusually low (< 0.5%—what aren't you getting?)
- ⚠️ Doesn't respond quickly to questions
- ⚠️ Can't provide references
- ⚠️ Won't give written fee estimate
Checklist: Before You Sign
Legal Checks (Via Lawyer)
- [ ] Nota Simple obtained and reviewed (max 1 week old)
- [ ] Cadastral checked - buildings match registration
- [ ] Licencia de Primera Ocupación received
- [ ] Homeowner Association investigated (if applicable)
- [ ] Municipal matters clarified - IBI paid, no illegal extensions
Financial Checks
- [ ] Budget prepared including all purchase costs (10-15%)
- [ ] Financing in place
- [ ] Payment plan agreed in writing
Contract Checks
- [ ] NIE number obtained
- [ ] Purchase contract reviewed by lawyer with translation
- [ ] Deed reviewed before notary signature
Practical Checks
- [ ] Physical inspection completed
- [ ] Utilities verified as functioning
- [ ] Will prepared (Spanish and home country, coordinated)
Frequently Asked Questions
Can I buy property in Spain without living there?
Yes, absolutely. You don't need to be a resident to buy property. You just need an NIE number. As a non-resident, you must be aware of special tax rules (Modelo 210).
Do I need a Spanish bank account to buy property?
It's not a legal requirement, but strongly recommended. Most notaries and sellers expect payment from a Spanish account. You'll also need it for IBI, community fees, and utilities.
What's the difference between escritura and contract?
Contrato/Arras is the preliminary agreement with deposit (normally 10%). It's legally binding, but ownership doesn't transfer yet. Escritura de Compraventa is the final deed, signed at the notary. The remaining balance is paid, and ownership formally transfers. This document is registered in the Land Registry.
Can I withdraw after signing at the notary?
No. Once you've signed the escritura at the notary, the transaction is final and binding. There is no cooling-off period. That's why it's so crucial that all checks are completed BEFORE this signature.
Conclusion
Buying property in Spain can be a fantastic investment—both financially and for quality of life. Thousands of foreigners today enjoy their homes in the Spanish sunshine.
But as this guide has shown, there are also many pitfalls to be aware of. The 10 most important are:
- Never buy without an independent lawyer
- Thoroughly investigate the legality of all buildings
- Check for hidden debt—it follows the property
- Understand the seriousness of the Arras contract
- Only trust written agreements
- Investigate the homeowner association
- Get NIE in good time
- Budget 10-15% extra for costs
- Make a Spanish will at the same time as the purchase
- Use a local lawyer who speaks your language
The common thread through all these points is: Thoroughness before signing. Everything you invest in thorough investigations and professional advice before purchase will pay back many times over in avoided problems and costs.
Need help with buying property in Spain? Contact me for a no-obligation conversation about your planned purchase.
Useful Links:
- Registro de la Propiedad (Spanish Land Registry)
- Catastro (Official Property Registration)
- Consejo General del Notariado (Spanish Notaries)
