Buying Property in Madrid as an EU Citizen: Real Advantages and the Process

There is one distinction that shapes the entire picture: whether you are a resident or not. An EU citizen who has been registered and regularized in Spain for more than six months accesses mortgages on the same terms as a Spanish citizen. That means financing of up to 80% of the appraised value and the market interest rates currently available to local borrowers. For a non-resident, that figure drops to 60-70% with higher rates. The difference in the financed amount and in total cost over a 25-year mortgage term can run into hundreds of thousands of euros.

The Resident EU Citizen Advantage Over the Non-Resident Buyer

The Spanish banking system treats residents as primary clients. The risk analysis is different: there is a local payroll or documented economic activity in Spain, local tax history, an active bank account with regular transactions. All of that reduces perceived risk and improves terms.

For the non-resident — whether an EU citizen who has not yet been registered or a foreign investor buying without settling — the bank requires more guarantees, finances less and applies higher rates. The typical ceiling is 60-70% of the appraised value, which with some frequency is lower than the purchase price, making the gap even wider.

An EU citizen who wants to buy in Madrid should think through the correct sequence: first establish residency — registration certificate, municipal registration, six months of banking history in Spain — and then go to the bank to request the mortgage. The financial savings from doing it in that order justify the wait.

Getting a Mortgage as a Resident EU Citizen in Spain: 2026 Conditions

In 2026 the Spanish mortgage market offers fixed-rate 20-year products in a band of roughly 2.8% to 3.4% depending on the bank, the applicant's profile and the bundled products contracted alongside the loan. Variable rate mortgages have regained appeal with the decline of Euribor, but most international buyers prefer the certainty of a fixed rate.

The banks most open to international clients with European documentation are CaixaBank, Sabadell and BBVA. Santander has strong international presence and may facilitate the process for clients who already bank with Santander in their home country. Bankinter offers competitive products for high-income clients.

Required documentation: passport or national ID, NIE, EU citizen registration certificate, income tax returns from the last two years — if there is already a tax history in Spain — or home-country documentation with apostille, bank statements from the last six months, employment contract or self-employment documentation, and a nota simple (basic land registry extract) for the property being purchased.

Purchase Taxes: What Nobody Explains at the Start

In Madrid, transfer taxes are the same for all buyers regardless of residency or nationality. The advantage for residents is in mortgage financing, not in the tax on the transaction itself.

For second-hand property: the Impuesto de Transmisiones Patrimoniales (ITP) in the Community of Madrid is 6% of the contracted purchase price. This is not the cheapest in Spain — Andalusia applies 7%, other communities reach 10% — but it is competitive. Madrid city is a major destination for property investment partly because of this.

For new build: VAT at 10% plus Actos Jurídicos Documentados (AJD) at 0.75% in Madrid. The total in new build is slightly higher than for second-hand property but includes the value of a property with no incumbrances and active developer guarantees.

On top of transfer taxes, there are notary fees, land registry fees and management fees: approximately 1.5 to 2% of the price. All in, the total cost of the transaction — price plus taxes plus fees — typically runs between 8% and 12% above the contract price.

Step by Step: From Offer to Title Deed

The standard sequence is: verbal offer, reservation deposit (3,000–6,000 euros to take the property off the market while negotiating), a preliminary purchase contract (arras confirmatorias) at 10% of the price — if the buyer withdraws, the deposit is forfeited; if the seller withdraws, they must return double — due diligence and mortgage processing period, and finally the public deed of sale signed before a notary.

The period between the preliminary contract and the final deed typically runs between 45 and 90 days. That is the time for the bank to carry out the appraisal, approve the loan and prepare the notarial documentation. If there are encumbrances on the property — a seller's existing mortgage, for instance — the notary coordinates simultaneous cancellation at the registry on the day of signing.

For EU citizens buying in Spain for the first time, real estate due diligence is the step that avoids the most mistakes: verifying the land registry situation, planning status and community of owners before committing to the preliminary contract.

For British citizens, mortgage conditions differ because they are treated as non-EU nationals, which materially changes the purchase analysis; the details are in our guide on getting a mortgage in Spain as a British citizen.

At Aedara we accompany the full property purchase process in Madrid from search to signing. If you are evaluating a purchase, visit our real estate page or contact us directly and we will walk you through how we organize the process from start to finish.