How to buy property in Madrid as a non-resident

Spain's property market is open to non-residents. There are no restrictions on foreign nationals buying real estate, and the process — while more involved than a domestic transaction — follows a clear legal structure. The key is understanding each step before you commit, not after.

This guide covers the process as it applies to buyers from Latin America, the United States, the United Kingdom and other non-EU countries.

Step one: the NIE

The NIE (Número de Identificación de Extranjero) is the tax identification number that Spain assigns to foreign nationals. It is mandatory for any property transaction: you cannot sign at the notary, open a Spanish bank account or pay taxes without one.

For non-residents, the NIE can be obtained through the Spanish consulate in your home country. This is often the most practical route if you are in the early stages of the process and not yet in Spain. Processing times vary, but applying from outside Spain typically takes two to six weeks.

If you are already in Spain, you can apply in person at a National Police station (Comisaría). An appointment is required.

Step two: the Spanish bank account

Spanish property transactions require payment via bank transfer from a Spanish account. This is not a bureaucratic formality — it is a legal requirement tied to anti-money laundering regulations. The notary will verify the origin of funds.

Several banks offer non-resident accounts. The process of opening one has become more streamlined in recent years, though requirements vary. Typically you will need your passport, NIE, proof of address in your home country and proof of income or employment.

Step three: the arras contract

Before the final deed, Spanish property transactions almost always involve an arras contract — a private purchase agreement between buyer and seller. This locks in the agreed price and conditions, and typically involves a deposit of 10% of the purchase price.

The standard form — arras penitenciales — gives both parties an exit: the buyer forfeits the deposit if they withdraw; the seller pays double if they back out. This provides meaningful legal protection and is worth understanding clearly before signing.

Step four: due diligence

Before signing the arras, the property must be verified. This means checking the Land Registry (Registro de la Propiedad) to confirm ownership and that the property is free of charges, debts or encumbrances. It also means reviewing the community of owners' situation, any pending maintenance fees, and — for new builds — the building licence and developer guarantees.

This is the phase where a lawyer's involvement becomes essential. A Spanish property lawyer will review the documentation, flag any issues and advise on whether the transaction is clean. Do not skip this step.

Taxes: what to budget for

For resale properties (second-hand), the main tax is ITP (Impuesto de Transmisiones Patrimoniales), a transfer tax paid by the buyer. The rate in the Community of Madrid is 6% of the purchase price. This is one of the lowest in Spain.

For new-build properties, ITP is replaced by VAT (10%) plus Stamp Duty (AJD, 0.75% in Madrid).

On top of the applicable tax, budget for notary fees (typically €600–€1,500 depending on price), Land Registry inscription fees, and legal costs if you are using a lawyer (recommended: typically 1% of the purchase price).

Step five: the notarial deed (escritura)

The final step is signing the public deed of sale at a notary. Both buyer and seller must be present — or represented by a duly notarised power of attorney, which is the standard route for non-residents who cannot travel to Spain on the closing date.

At this point, the balance of the purchase price is transferred, the tax is paid and the property is registered in your name.

Non-resident tax after purchase

Once you own the property, there are ongoing tax obligations. Non-residents who do not rent out the property pay an imputed income tax based on the cadastral value of the property — typically a small amount. If you do rent it out, rental income is taxed at a flat rate of 19% for EU/EEA residents or 24% for others, though double-taxation treaties may modify this depending on your country of residence.

At Aedara we coordinate the full acquisition process for non-resident buyers: property search, legal and fiscal due diligence, NIE assistance, notary coordination and post-purchase support. If you are considering buying in Madrid, tell us about your search.