Buying a Home In Málaga, Spain? Here Are 3 In-Depth Legal Tips Every Foreign Buyer Should Know in 2025

01. Secure Your NIE (Foreigner Identification Number) and Prepare Your Documentation In Advance

  • The NIE (Número de Identidad de Extranjero) is mandatory for any property purchase in Spain. Without it, you cannot sign contracts, pay taxes, or register your property.

  • How to obtain it: Apply at a Spanish consulate in your home country or directly in Spain. The process requires your passport, proof of purpose (property purchase), and a small administrative fee.

  • Additional documents:

    • Valid passport

    • Proof of funds (recent bank statements, payslips, or tax returns)

    • Spanish bank account (not obligatory, but strongly recommended for managing payments and utilities).

  • Tip: Start your NIE application as soon as you begin your property search. Delays in obtaining the NIE are a common cause of postponed transactions.

02. Engage a Local Lawyer for a thourough Due Diligence and Understanding the Purchase Process

  • Reservation agreement: Once you find a property, a reservation contract is signed and a deposit is paid to secure it.

  • Arras (earnest money) contract: Typically, a 10% deposit is paid directly to the seller. This contract outlines the terms and protects both parties.

  • Final signing (Escritura Pública): The public deed is signed before a notary, who ensures the legality of the transaction.

  • Registration: The property is registered in your name at the Land Registry.

  • Why a local lawyer?

    • They check for outstanding mortgages, liens, or community debts.

    • They ensure the seller is the legitimate owner and the property’s legal status is clear.

    • They help you avoid common pitfalls, such as long delays between deposit and completion, or issues with bankrupt sellers.

03. Budget for All Taxes, Fees, and Ongoing Costs

  • Upfront costs:

    • Property Transfer Tax (ITP): 6–10% for resale properties, depending on the autonomous community.

    • VAT (IVA): 10% on new builds (instead of ITP).

    • Notary and Land Registry fees:Typically 1–2% of the purchase price.

    • Legal fees: Usually 1–2% of the property price.

    • Total additional costs:Budget 10–15% above the property price for all taxes and fees.

  • Financing:

    • Mortgages for foreigners: Non-residents can typically borrow up to 70% of the property value; residents up to 80%. Spanish banks require proof of income and a solid credit history.

  • Ongoing costs:

    • Annual Property Tax (IBI): Varies by municipality.

    • Non-resident income tax: Applies even if you don’t rent out the property.

    • Community fees: For shared services in apartment complexes or gated communities.

  • Other considerations:

    • The Golden Visa is no longer available, but options like the Non-Lucrative Visa or Digital Nomad Visa exist for long-term stays.

 

Without it, you cannot sign contracts, pay taxes, or register your property.

Get a lawyer who speaks your language and Spanish.

A local lawyer will check the status of the property and its legitimate owner, and will help you to avoid common pitfalls.

Understand local taxes. Budget for extra expenses.

Calculate in advance all the upfront costs, legal fees, additional costs, financing and ongoing costs.