Natalie The reasons to buy property in Spain are plentiful, and you just need to decide if those reasons match your expectations. As with any significant lifestyle purchase, ask yourself why you want to buy a Spanish home and do your homework before signing the dotted line. Pinpointing why you want to buy and what you expect from this real estate purchase will help you decide if this life endeavour will suit you.
When looking at foreign ownership, Brits often lead the way, followed by French and Germans, but these days, many other nationalities flock for good reasons. This trend continues as foreign homeownership becomes more of a norm than a luxury. With an international focus on the European country as the ideal place to own a home abroad, this comprehensive guide looks at what it offers foreign buyers.
Good Reasons to Buy Property in Spain
Firstly, some geographical facts
Spain is in southwestern Europe, on the Iberian Peninsula, bordered by France and Andorra, Portugal, and the Mediterranean Sea. As Europe’s fourth-largest country, covering about 505,990 square kilometres, the climate ranges from Mediterranean along the coasts to continental in the inland regions and oceanic in the northwest.
Varied landscapes include mountain ranges like the Pyrenees and Sierra Nevada, vast plains like La Meseta, numerous beaches along the extensive coastline, and the Mediterranean Balearics and Canary Islands off the northwest coast of Africa. Hence, choosing your location carefully is a must! Now let’s look at reasons to buy.
1: Average Prices Have Room for Capital Growth
Despite enormous growth, low property values have yet to peak at their historical high, so even budget buyers will find room to navigate. Across the country, the average price is 2,054 €/m2, but go regional, and prices range from 724 €/m2 to 4,180 €/m2 in the Balearic.
2: Global Tourist Brand
Anyone looking to rent their homes to cover running costs or delve into rental investments will tap into a thriving tourism brand. The World Economic Forum ranks Spanish travel tourism and competitiveness in the top five, and tourism accounts for 5% of the GDP, attracting over 70 million tourists annually.
3: Diversity and Choice
Much tourism success is down to diversity. Spain excels in everything it does, from food, lifestyle preferences, health, leisure, shopping, sports, and nature. The landscape and scenery differ from cities like Barcelona to smaller resorts like Gran Alacant. Even the climate, when comparing north and south regions, shows diversity. Hence, property buyers can explore several destinations to gauge whether they match their lifestyle.
4: Sunny Climate, Culture and Relaxed Lifestyle
Considering excellent climates and mild winters, imagine 320 days of sunshine yearly. Think terrace dining, seaside swimming, exploring nature and sporting a gorgeous year-round tan. Of course, Spanish culture lures many, whether tapa bars, traditional food, or the afternoon custom of a siesta. Coastal regions are popular because the seaside lifestyle is a dream, thanks to idyllic beaches.
5: Blue Flag Beaches
Regardless of where foreigners buy, a general trend for retirees is a beachside lifestyle. Spain delivers this in abundance with 5000 kilometres of coastline. Within this, 729 blue flag beaches present the cleanest and most sustainable recreation areas. Ninety-eight marinas and five ports also received a blue flag certification. If amazing beaches, sailing, and sea views alongside that desirable climate are your idea of a dream life, Spain delivers all that and more.
6: Various Regions for Property Investments
Perhaps the place where diversity shines is 17 individual regions, with Spanish cities and coastal areas. Valencia, which features well-known places like Alicante, reigns supreme for foreign property sales. Still, national buyers head to Andalucía, the Costa Brava, and the Balearic Islands. If you are undecided on locations, get to know each region to see if it matches your expectations.
7: The Spain Golden Visa Program and Spanish Citizenship
The Golden Visa appeals to many non-resident and non-EU foreigners who want to live in Europe. The Spanish government introduced the national program for non-EU citizens in 2013, structured around home ownership. The applicant makes certain investments to get foreign property ownership, permanent residency and live as a Spanish citizen. Officially called the residence by investment program, there are many factors to consider to determine if this is a sound investment. Please note that you must hold residency for at least ten years to apply for Spanish citizenship via this route.
8: Global Demand and Good Liquidity
Currently, the real estate market is worth USD 166.01 Billion, but forecasts say, this will rise to USD 231.75 billion by 2029. Roughly 640,000 properties are sold annually, and in 2023, foreigners accounted for 15% of sales. Should you decide to sell later, expect excellent liquidity opportunities since Spanish property is a global product, not just domestic and not limited to European countries. This is just one reason why investors love Spain.
9: Airports and Flight Schedules
Spain is full of natural beauty and gorgeous beaches; hence, as a tourist destination, it excels in excellent airports and flight schedules all year round. International buyers quickly get to popular destinations through the major airports, which include Adolfo Suárez Madrid-Barajas Airport (MAD), Spain’s most significant and busiest travel hub for international and domestic flights.
Josep Tarradellas Barcelona-El Prat Airport (BCN) in Barcelona, Catalonia, is Spain’s second-largest airport and a base for Vueling Airlines. Málaga Airport (AGP) serves the Costa del Sol region with numerous European low-cost carriers. At the same time, Valencia Airport (VLC) serves eastern Valencia and surrounding areas, and Alicante-Elche Miguel Hernández Airport (ALC) serves the Costa Blanca region.
Palma Airport (PMI) is busy during summer, while Ibiza Airport (IBZ) gives easy access to Ibiza and Formentera. Gran Canaria Airport (LPA) specialises in inter-island and international flights. Tenerife South Airport (TFS) serves the southern part of the island with domestic and inter-island flights.
Other airports include Santiago de Compostela, Bilbao, Seville, Zaragoza, and Granada, which is the gateway to the Alhambra and Andalusia, Santander Airport (SDR), which serves Cantabria, and Murcia (RMU), which handles traffic for the Costa Cálida region. Air travel has never been so easy!
10: Luxury Properties and Destinations
For luxury properties to live in, use as a holiday home or achieve good rental yields, places like Marbella, Estepona, Benahavís, and Mijas excel. Easily find your perfect home with expert artistry, immaculate planning, and impeccable decor and design. But there is more. All luxury property for sale sits in desirable neighbourhoods that match the lifestyle. Puerto Banús is one such example of planned luxury living. Foreign citizens come from around the world, and Saudi royalty and celebrities often drop by.
11: European Stronghold
Spain has been a key European Union member since joining in 1986 and excels across various domains, like economy, social development, and sustainability, as the fourth-largest Eurozone economy and fifth-largest in the EU (after Germany, France, Italy, and the Netherlands). Spain also attracts much FDI, particularly in sectors like housing, energy (especially renewables), and manufacturing.
12: Healthcare and Life Expectancy
Spain’s healthcare system is among the best, with universal coverage and firm outcomes. The life expectancy is 83.5 years, among the highest globally, and the public healthcare system, known as the National Health System (Sistema Nacional de Salud – SNS), is funded through taxes and ensures access to healthcare for all legal residents. The European Health Insurance Card (EHIC) allows EU citizens to access public healthcare services. Non-EU citizens may need private health insurance unless they have a residency permit, often requiring proof of health coverage.
13: Green Transition and Sustainability
Spain generates 46% of electricity from renewable sources, including wind and solar energy production. Committing to sustainability, it emphasises energy-efficient and eco-friendly housing supported by EU funding and regulations. Ranking as an EU leader in renewable energy deployment, the country is on track to meet EU-mandated climate targets, aiming for 74% renewable electricity by 2030 and net-zero emissions by 2050.
14: Business and Economic Growth
The economy’s growth is a priority, and Spain excels in modern-day living, in which everything changes yearly. Entrepreneurship shines through in tech hubs like Barcelona and Madrid, with fintech, AI, and renewable energy sectors. A robust transportation network supports business operations, including high-speed rail, modern airports, and well-developed ports.
Meanwhile, the strong drive to attract foreign companies and industry experts is thanks to the strategic location in Europe, Latin America, and North Africa. In addition to this, major companies like Inditex (Zara), Banco Santander, Telefónica, Iberdrola, and Spain rank among the top 15 economies globally, with a GDP of approximately $1.6 trillion.
15: Types of Property for House Hunting
Real estate investors love property searches because the types are endless. Whether you want a holiday home that generates rental income or a traditional Spanish Finca that reflects the rich culture, you will find what you want. From affordable prices for studio apartments to large villas and mansions in select Spanish markets, expect various styles of architecture as well.
Some people opt for resale property, while others like the discounted prices of off-plan homes for an excellent investment. Some international investors like golfing homes because of high rental yields. Aside from that, think of attractive choices like branded hotel residences, townhouses, penthouses and more. Buyers can even design and build their bespoke homes.
16: Real Estate Sectors and Favourable Trends
Spain traditionally has high homeownership rates, with over 75% of residents owning their homes. The rental market has expanded in recent years, particularly in urban areas, as younger generations choose long-term rentals due to high property prices. However, Spain is popular for second home ownership, particularly among foreign property owners, with areas like Costa Del Sol and Balearic Islands being significant hotspots.
The housing market experienced a significant downturn during the 2008 financial crisis, but prices have recovered mainly, especially in urban and coastal areas. Cities like Madrid have high property prices, with an average per square meter exceeding €3,500 in prime locations. Housing is more affordable in rural and less populous regions, with prices below €1,000 per square meter.
This beautiful country attracts many foreign buyers, particularly from the UK, Germany, and Scandinavia, and the robust tourism sector boosts demand for vacation rentals and investment properties. The rise of remote work has also increased interest in properties in smaller towns and coastal regions, but overall Europeans favour Spain as a retirement destination because of the climate, cost of living, and healthcare system.
People Also Ask
Is it still a good idea to buy property in Spain?
Spain will always be an attractive destination, and the housing sector will remain solid for many years. We advise drilling down to regional markets rather than looking at the country. All experts and foreign investors will testify that some perform better than others, and to avoid others. This involves much research and asking questions, but it is worth it for a good investment.
Can I get permanent residency in Spain if I buy a house?
The house-buying process and residence visa process are two separate aspects. Of course, buyers can get a permanent residence with a golden visa for a foreign investment scheme. Otherwise, they must apply separately for residency. Applications are easy to complete.
What are the pitfalls of buying a home in Spain?
Foreign buyers’ biggest mistake is assuming that housing regulations and the buying process are identical. Our expert advice and a crucial step are to start with a clean slate, ask many questions and do much research. Pitfalls often come from the house itself, and now is not the time to skimp on a lawyer or a surveyor, especially if buying older properties in rural areas.
The surveyor will check everything structurally, and the lawyer is responsible for due diligence. One pitfall to avoid is buying a house where the renovations or additions, like swimming pools, don’t have licenses. Remember the difference between the market value and cadastral value. You will pay more tax if the latter exceeds the market price.
What is the Spanish Wealth Tax?
The Spanish Wealth Tax (Impuesto sobre el Patrimonio) applies to individuals’ net wealth, targeting high-net-worth residents and non-residents who own Spanish assets. Spanish residents pay tax on worldwide assets, but Non-Residents only pay on holdings in Spain. The tax depends on net assets, the total value minus allowable liabilities (such as mortgages).
The first €300,000 of a taxpayer’s primary residence is exempt. Individuals have a tax-free allowance of €700,000 (in most regions), though this varies by autonomous community. The Wealth Tax is progressive, ranging from 0.2% to 3.5%, depending on the region and assets, and Spain’s 17 autonomous communities can adjust exemptions and tax rates. For instance, Madrid provides a 100% rebate. Other areas, like Catalonia and Andalusia, enforce stricter rates. It mainly affects only high-net-worth individuals.
Tips to Avoid Pitfalls
- Hire a local, independent lawyer to handle legal issues and aspects.
- Conduct thorough due diligence on the home, local prices, and history.
- Work with a reputable real estate agent who knows the local market.
- Ensure all documents are translated before signing.
- Factor in all additional costs beyond the property price.
- Understand capital gains tax and inheritance laws.
- For apartment complexes, monthly maintenance costs must be paid towards communal areas.
How much tax do you pay when buying a Spanish home?
Foreign nationals pay between 10 and 12% of the purchase price for the property transfer tax, except the Canary Islands, which charges 7%. Add extra costs like lawyers, translators, and notary fees. Homeowners also pay annual property tax, which varies across regions from 0.4% to 1.10% of the cadastral value. Don’t forget income tax if you rent it out.
How to buy a home in Spain
Financing Options: There are various options, but most foreign buyers source finances from their home country rather than applying for Spanish mortgages, which require long-winded agreements and contracts. In addition to the purchasing price, don’t forget to factor in tax rates and closing costs into your final budget.
Get your NIE and Spanish Bank Account: Obtaining a NIE (Número de Identificación de Extranjero) and a Spanish bank account is essential for foreigners planning to work, live, or invest. The NIE identification number is issued to non-Spanish residents for legal, tax, and administrative purposes, and foreigners need one to buy and sell a home and for tax identification purposes. Popular banks include Santander, BBVA, Caixa Bank, Sabadell, and ING. When you purchase a home through our real estate company, we help you do both.
Search for properties: Start your search for Spanish property by reviewing our portfolio of apartments and villas for sale. Use the contact form to arrange viewings or find out more via email. Once you find the home of your dreams, we will arrange for the Contrato de Reserva, which will temporarily take the house off the market so we can complete other formalities and your lawyer can complete due diligence. Once complete, sign the deeds.
But What are Famous Destinations where Foreigners Buy?
Costa del Sol (Andalusia): Popular with British, Scandinavian, and German buyers, the districts where foreign buyers head include Marbella, Málaga, Estepona, Nerja, and Fuengirola. There are already large expat communities and excellent transport links via Malaga airport.
Costa Blanca (Valencian Community): With an established British expat community, especially in Torrevieja, other nationalities of buyers include German, Norwegian, and Dutch, who flock to places like Alicante, Benidorm, Torrevieja, Jávea, and Denia.
Balearic Islands (Mallorca, Ibiza, Menorca): Although the Balearics are the most expensive place, foreigners adore Palma de Mallorca, Santa Eulalia (Ibiza), Mahón (Menorca). Buyers tend to be Wealthy Europeans, mainly from Germany and Scandinavia, who like the exclusive international schools.
Canary Islands: British, German, and Scandinavian buyers adore the islands of Tenerife, Gran Canaria, Lanzarote, and Fuerteventura, which typically experience hotter temperatures during winter.
Barcelona (Catalonia): Popular Areas include Eixample, Gràcia, the Gothic Quarter, and Poblenou, which attract French, Italian, British, and American buyers. Barcelona is also a thriving tech hub that attracts international professionals.
Madrid: The capital city attracts French, Latin American, Chinese, and British buyers to places like Salamanca, Chamberí, Retiro, and Centro. They like the cultural and business hub, which has strong rental demand, international schools, and excellent transport links.
Valencia (Valencian Community): Neighbourhoods to consider include Ruzafa and El Cabanyal. Known as the city of arts and science, Valencia is experiencing higher demand from remote workers and digital nomads, thanks to affordability and quality of life.
Costa Brava (Catalonia): With proximity to France and Barcelona, buyers like Girona, Lloret de Mar, Tossa de Mar, and Cadaqués. Featuring stunning coastal landscapes and historic towns, the Costa Brava is quieter and less commercialised than other coasts.
Murcia and Costa Cálida: Buyers head to La Manga, Cartagena, and Mar Menor for attractive opportunities through new golf resorts and planned developments. These areas offer more affordable properties compared to other regions.
Basque Country and Northern Spain: Visit the areas of San Sebastián, Bilbao, Asturias, and Galicia to discover lush green landscapes, a cooler climate, and world-famous gastronomy. This region is seeing growing interest in cities like Bilbao for urban renewal, lower housing prices, and cultural scenes.
Use Our Real Estate Agent Services
We are Spot Blue International, and we sell homes in all major cities and towns. Whether you want beautiful beaches, suitable real estate investments, or retirement, we can help with your property purchase. Call an agent today who will answer your questions about returns on investments, real estate prices, and more reasons to buy property in Spain as a foreigner.
