Spain has long been a favourite destination for UK buyers and it’s easy to see why. If you’ve ever dreamed of what it might be like to live in Spain, you’re already taking the first step towards a new chapter overseas. While the process of owning a home shares similarities with the UK, there are a few legal and financial pitfalls of buying property in Spain, that it’s helpful to understand from the very beginning.
With the right preparation and the proper guidance, you can anticipate the parts of the process that differ from the UK and approach your purchase with confidence, rather than being caught off guard.
In this guide, we’ll look at what to consider before buying a property, the key stages during the buying process and the ongoing costs to plan for once you’ve got the keys.
For help managing the currency side of your property purchase, Lumon specialises in helping buyers send money overseas safely. It’s a simple way to stay in control of your budget and make the most of your international property purchase.
How to avoid the pitfalls of buying property in Spain, before you buy
A little due diligence early on can help you avoid the most common pitfalls of buying property in Spain.
If you’re buying a residential property, it’s important to know whether it’s a new build or a resale home. This matters because buying a new build or a resale property comes with different legal requirements, processes and costs, which can affect your timeline as well as your budget.
- New build: A brand new property that has never been lived in before. It may still be under construction (off-plan) or recently completed by a developer.
- Resale property: A property that’s already been owned and lived in before and is now being sold by its current owner. While both routes can lead to your dream home in Spain, there are a few differences to keep in mind before you buy.
Legal pitfalls of buying property in Spain
One of the most important aspects to understand is how property ownership in Spain works. Each region has its own planning rules, tax rates and legal requirements. These can affect costs, permissions and even what you’re allowed to do with the property once you own it.
The most common legal pitfall for UK buyers may be discovering that a property is not correctly registered or that previous building works were carried out without the appropriate licence. Addressing this early protects you from unexpected costs or delays later.
Here are a few key checks to make sure you understand Spanish property law before you proceed.
| Type | What it means in Spain | Key things to check |
| Freehold (propiedad plena) | You own both the building and the land outright. Most residential properties in Spain are sold as freehold. | Most secure form of ownership. Confirm the title deed (escritura de compraventa) lists you as the sole owner once registered. |
| Leasehold (arrendamiento de larga duración | You own the property, but not the land. Less common in Spain. Usually applies to commercial or long-term land leases, rather than homes. | Ask your lawyer to confirm the lease term and renewal rights. These can differ from UK arrangements. |
| Urban land (suelo urbano) | Land that’s approved for residential development and has access to utilities and local infrastructure. | Ensure the property or development has a valid building licence (licencia de obra) and habitation certificate (licencia de primera ocupación).1 |
| Rustic/rural (agricultural) land (suelo rústico or suelo no urbanizable) | Agricultural or protected land where building is heavily restricted. Some older homes on rustic land may not be fully legal. | Confirm the property is officially registered for residential use before you buy. Building extensions may require extra permissions.1 |
- New builds and off-plan properties: Confirm that the development is approved and built on recognised urban land (suelo urbano) and that it has the correct building license (licencia de obra). If buying off-plan, ensure the developer provides a valid bank guarantee (aval bancario) to protect your deposit.1
- Resale properties: Ask your lawyer to confirm the property’s registration details match what’s being sold and that it’s officially recorded for residential use.1
Request a ‘Nota Simple’ from the Land Registry
Once you’ve confirmed the property’s location and classification, request a Nota Simple, a short report from the Spanish Land Registry (Colegio de Registradores). This document shows who legally owns the property and highlights any debts, disputes or boundary issues you should know about before you buy.2
- For resale homes, it confirms you’re buying a debt-free and properly registered property.
- For new builds, it verifies that the developer’s title is correctly recorded.2
Financial pitfalls of buying property in Spain: Additional costs
It’s easy to focus solely on the purchase price, but you should allow around 10-15%* extra for additional costs including legal fees, notary and registration charges, surveys and spanish property tax such as IBI (Impuesto sobre Bienes Inmuebles).
*This estimate is based on guidance commonly cited across reputable Spanish property and expat advisory sources. Actual costs can vary depending on the property’s location and value.
Cost type | New builds | Resale properties |
| Legal fees | Around 1% to 1.5% of the purchase price.* | Around 1% to 1.5% of the purchase price.* |
| Taxes | VAT (IVA) – 10%.3 | Property Transfer Tax (ITP) – 6-10%.4 |
| Surveys or inspections | Optional inspection. | Usually recommended to do a full survey. |
| Ongoing taxes | IBI (property tax), community fees.2 | IBI (property tax), community fees.2 |
*Spanish law does not have fixed rates for lawyers; fees vary depending on the lawyer and the complexity of the transaction. The 1% figure is a typical market rate, often ranging from 1% to 1.5% of the purchase price.
Off-plan and uninspected properties
If you’re buying off-plan, take additional care before committing to any payments. A few extra checks mean you can move forward with greater certainty. Review the developer’s reputation, confirm that all building licenses (licencia de obra) are in place and ensure your deposit is protected by a bank guarantee should the project face delays.2.
It’s good practice to work with an independent lawyer
Consider choosing an independent, English-speaking solicitor who specialises in Spanish land law (urbanismo). They should be completely independent of the developer or the estate agent.5 This ensures that every detail from contracts to registration is handled correctly and solely in your interest.
Common pitfalls of buying property in Spain: Contracts, deposits and payments
Once you’ve found the right property, the next stage is formalising everything in writing. Understanding each step helps you maintain control of the process and proceed with clarity.
Buyer’s checklist: Contracts and final checks
Before completing your purchase, make sure the key documents and inspections are in order:2
- Reservation contract (Contrato de Reserva): Never sign or pay a reservation fee or deposit until your lawyer has reviewed it, as these fees are often non-refundable.
- Sales contract (Contrato de Arras): Legally binding for resale properties. If you pull out, you lose your deposit; if the seller withdraws, they must repay double.
- New builds: Use a staged payment contract instead of lump-sum contract and confirm all licenses and permissions have been approved.
- Property survey: Arrange an independent structural survey before completion to check for issues or unapproved works.
Currency fluctuations and exchange rates
When buying property abroad, even small movements in the exchange rate between pound to euro can significantly alter your final property cost.
Some buyers look beyond traditional banking channels when planning their international payments and explore specialist providers with experience in overseas property transactions. We offer bank-beating exchange rates to support buyers throughout the process. Working with a specialist provider can give you market guidance and structured support aligned with your purchase timeline.
A currency specialist does more than monitor the market. They can develop a personalised plan around your specific goals and timeframe. For instance, new builds, often involve a long gaps between signing contracts and completion. In this case, tools such as forward contracts, can help you lock in today’s exchange rate to protect your budget from future market volatility.
After you buy: key steps to making your ownership official
Once the sale has completed, these steps help ensure everything runs smoothly:
- Register the property: After signing the deeds (escritura) at the notary, confirm make that the property has been registered in your name at the Spanish Land Registry. Your lawyer or notary typically handles this, but it’s worth double-check.2
- Set up utilities: Utility accounts in Spain don’t update automatically. Take meter readings on completion day and set up new contracts for electricity, gas and water.2
- Stay on top of local taxes and fees: Budget for ongoing costs such as IBI (property tax), Basura (rubbish collection tax) and any community fees if your property is part of a shared development.2
Staying organised with these steps helps you avoid administrative issues and ensures your new home in Spain runs smoothly from the beginning.
If your mortgage repayments or regular bills are paid in a different currency from your income, exchange rate changes could cause your monthly costs to rise unexpectedly. A Regular Payment Plan (RPP) can help automate your transfers, keeping payments consistent and on schedule. *
Looking to buy a property in Spain? Lumon is here to help
Buying abroad should feel exciting not stressful. Lumon helps you send money to Spain securely and at a competitive rate, whether you’re making a one-off property payment or setting up regular transfers after you move.
- When you buy: Explore our range of transfer products, including Forward Contracts, which allow you to lock in an exchange rate and protect your budget from market fluctuations.
- After you buy: Use our Regular Payment Plan* to manage ongoing payment commitments such as mortgages or utilities with ease.
With one-to-one support from your dedicated Lumon currency specialist, you can move forward with peace of mind knowing your international transfers are managed smoothly, so you can focus on settling into life in Spain for the long term.
*Terms and conditions apply. Speak to our team to check if you’re eligible for our Regular Payment Plan.
Sources used:
- GOV.UK – Spain: buying and renting property – Check property location prior to purchase
- GOV.UK – Spain: buying and renting property – The purchaser’s checklist
- Property Tax Spain – VAT (IVA) on Property Purchases in Spain (2025)
- Property Tax Spain – Transfer tax (ITP) for Resale purchases
- GOV.UK – Spain: buying and renting property – Legal advice
Sources last checked on 24.11.2025
The information provided is for general information purposes and does not constitute legal, tax or other professional advice from Lumon, and it is not intended as a substitute for obtaining advice. It is recommended you seek professional advice from a financial advisor or any other professional.
