Our collaborator Pilar Herrera, Solicitor and Property Inspector, provides us with a clear and detailed summary of the steps involved in purchasing a property in Spain.
We are aware that our clients are about to take one of the most important steps in their lives: buying a home.
The process can be somewhat labyrinthine: valuations, banks, clauses, documents that are not always easy to understand… and decisions that will have an impact for years to come.
Buying a home is more than just paying a certain amount and applying for a mortgage: it can be the starting point for financial independence.
Shall we begin?
1. Before Buying: Calculate the Extra Costs
In Andalusia, for example, VAT on new-build homes is 10% (4% for subsidised housing), to which another tax must be added, the IAJD, which is 1.2%.
Other costs will also be added:
Valuation
Notary
Registration fees
Agency fees
2. Prepare the Documentation According to Your Profile
Personal Documentation (All Cases)
ID card / NIE (Foreign Resident ID) / Passport (valid)
Marital status and matrimonial regime if married
Deposit agreement or preliminary purchase agreement
Latest receipts for current loans (e.g., mortgage, personal loan, etc.)
Recent bank statements (3-6 months)
Account balances that justify the funds for the purchase
Employment and Income Documentation
Salaried Employees
Last 3 payslips
Employment contract (preferably permanent)
Income tax return (last financial year)
Certificate of employment history
Self-Employed Workers
Income tax returns for the last 2 years
Quarterly VAT and income tax forms (130/131 and 303)
Registration with the IAE (Economic Activities Tax)
Employment history
Bank statements showing activity
Tax return
3. Prepare the Property Documentation
Deposit agreement or preliminary sales agreement
Simple registry note (to check encumbrances)
Latest property tax (IBI) receipt
Energy efficiency certificate
4. Additional Guarantees (If Required by the Bank)
The bank may consider the guarantees insufficient and request additional guarantees, which would mean:
Guarantor documentation: Same documents as for the owners
Deeds and encumbrances of other properties provided as collateral
With this, the bank can:
Analyse your ability to pay (income – debts)
Review your financial history (CIRBE + statements)
Assess the collateral (property)
5. Understand the Mortgage Well—What You Are Signing
A mortgage loan is a long-term contract. You repay what you have received + interest.
How much can be financed?
Residents and first home: Up to 80% of the lower value (purchase price or appraisal value)
Certain profiles may finance up to 90%
What percentage of net income do banks allow for repayments?
Up to 30–35% of net income
What is the best interest rate?
Fixed: Always the same percentage
Variable: Generally linked to Euribor plus a spread
Mixed: A combination of fixed and variable
Maximum repayment period?
Maximum of 30 years, or until reaching 75 years of age
What are the conditions for paying less?
Direct deposit of salary
Taking out insurance or pension plans
Obtaining and using bank cards
(Ensure the cost does not exceed the savings)
Is it the same for nationals and foreigners?
No. Spanish banks prefer customers in this order:
Residents of Spain
Residents of the EU
Others
They prefer civil servants and salaried employees over the self-employed
They favour first-home purchases over investment properties
Generally require 30–40% of the purchase price to be available for the transaction
6. The Mortgage Process in 7 Steps
Choosing a Mortgage
The customer chooses the type: fixed, variable, or mixed.Signing the Mortgage Application
Authorises the bank to:Analyse viability
Request an approved valuation
Review the legal status of the property
Submission of Documentation
Personal, income, and property documents
Bank reviews ratios and viability
Feasibility Analysis
Debt ratio (≤ 30–35%)
Financial history (CIRBE, ASNEF, RAI)
Job stability and seniority
Appraisal and Legal Report
Cost ≈ 0.10% of appraised value
Timeframe: approx. 5 days
Legal registry report checks for encumbrances
Delivery of Binding Documentation
FEIN, FIAE, interest rate simulations, expense breakdown, insurance conditions, draft mortgage agreement
Binding on the bank for 30 days
Notary – Two Appointments Required
First appointment: Free advice, transparency report (10–14 days before signing)
Second appointment: Signing of deed of sale and mortgage
Subsequent Procedures
Payment of taxes (AJD/ITP or VAT)
Registration in the Land Registry
Delivery of copy to client
7. Recommended Credit Institutions in Tarifa
Unicaja
Banco Santander
CaixaBank
BBVA
All provide advice on conditions and terms.
If you need assistance, you can count on the help of Pilar Herrera, our recommended advisor in this area.
Contact Pilar Herrera
+34 678 53 53 99
pilar.gestionpatrimonial@gmail.com
Solicitor 5490 ICA Cádiz