How to Avoid Pitfalls When Buying Spanish Property as a Foreigner

Buying a home in Spain can be a dream come true — or a legal nightmare if you’re not properly prepared. Foreign buyers often encounter unexpected taxes, legal risks, and documentation issues that can derail their investment.

This guide reveals the 10 most common pitfalls when buying property in Spain as a foreigner — and how to avoid them with confidence.

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1. ❌ Buying Without Due Diligence

One of the biggest mistakes is assuming everything is in order because a property looks nice.

Key Due Diligence Steps:

• Verify ownership and legal status via the Nota Simple

• Check for embargos, charges, or encumbrances

• Confirm the property is correctly registered in the Land Registry and Catastro

💼 Your lawyer should perform these checks before you sign any contracts.

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2. ❌ Not Hiring an Independent Lawyer

Real estate agents may suggest “in-house” legal help — but this often involves a conflict of interest.

Hire a lawyer who is:

• ✅ Fully independent

• ✅ Experienced in Spanish property law

• ✅ Fluent in your language

• ✅ Registered with the Bar Association (Colegio de Abogados)

👩‍⚖️ At Borderless Lawyers, we act only in your best interest — not the seller’s.

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3. ❌ Skipping Urban Planning Checks

Even legal homes may be built in violation of urban planning rules, especially in rural or coastal areas.

Your lawyer must check:

• Zoning classification of the land

• Any existing or pending demolition orders

• Whether extensions or pools are legally registered

📌 Properties built on protected land can be non-habitable or unsellable in the future.

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4. ❌ Signing the Contrato de Arras Too Early

The arras contract locks you into the purchase — often with a 10% deposit.

Avoid signing unless:

• Legal checks are complete

• The contract includes exit clauses if issues arise

• You have time to secure financing or residency documents

📉 If you back out without cause, you may lose your deposit.

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5. ❌ Relying on Verbal Agreements

In Spain, only written agreements are legally enforceable. Don’t rely on:

• Verbal assurances about property condition or furnishings

• Promises to fix issues before closing

• “Handshake” price agreements

✅ All conditions must be documented in the sale contract or you have no legal protection.

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6. ❌ Not Understanding Spanish Property Taxes

Foreign buyers are often caught off guard by:

• Property Transfer Tax (ITP): 6–10% (resale properties)

• VAT + AJD: 10% + 1.5% (new builds)

• Legal fees, notary, and registration: ~2–3%

• Annual IBI and non-resident tax

🔎 Use a lawyer to estimate your total cost of purchase, not just the sale price.

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7. ❌ Buying Without a Spanish NIE or Bank Account

You need an NIE (Foreigner ID Number) to:

• Buy property

• Open a bank account

• Pay taxes

• Set up utilities

💡 This can be arranged before arrival, or remotely via Power of Attorney.

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8. ❌ Buying Property Remotely Without Legal Representation

Remote purchases are common — but risky without proper legal support.

Your lawyer can:

• Secure your NIE and bank account

• Conduct due diligence

• Sign contracts and close on your behalf via notarized Power of Attorney

• Handle post-sale registration and tax filings

✅ You don’t need to be in Spain to safely buy — but you do need expert help.

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9. ❌ Failing to Account for Currency Exchange & Transfer Delays

Currency fluctuations can cost you thousands in cross-border transfers.

Tips:

• Use a currency transfer service with fixed exchange rates

• Avoid waiting until the last minute — bank transfers can take days

• Factor currency costs into your budget

📉 Some buyers miss payment deadlines due to slow international transfers — and lose their deposits.

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10. ❌ Not Planning for Spanish Wills or Inheritance

Once you own property in Spain, your heirs will be subject to Spanish inheritance laws and taxes.

Best practice:

• Draft a Spanish will to cover your local assets

• Clarify legal heirs and applicable succession law

• Review inheritance and gift tax implications for your family

🔐 Your lawyer can register your will with the Spanish Notarial Central Registry.

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✅ Summary: How to Avoid These Pitfalls

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📞 Ready to Buy Spanish Property with Confidence?

Buying property in Spain as a foreigner doesn’t have to be risky — if you have the right team behind you.