Real estate market in Spain: 10 must-knows in Spain

All posts Leave a comment   Published on par Jonatan Carbonell

The health crisis unleashed by COVID-19 not only altered our lifestyle, it also wreaked havoc on the Spanish real estate market which, just after reaching its maturity, faced a sharp drop in 2020.

However, in line with epidemiological advances, needs arising after confinement and the increase in teleworking, recovery is imminent. Therefore, we show you what are the important points to remember regarding the real estate market in Spain.

Spain: An attractive country that attracts new investors every year

Spain is one of the 27 countries that make up the European Union, and one of the 19 members of the Eurozone. It has a territory of 505,370 square kilometers, and is also the fourth largest country on the European continent and one of the most mountainous.

Spain as a country promises to make anyone fall in love. Its beaches, the blue sky and radiant sun, its pleasant climate, which is temperate most of the year, and the warmth of its people, are the characteristics that make it shine the most.

It is not for nothing that Spain is the second most visited country in the world, with 82.7 million visitors in 2019, according to data from the World Tourism Organization. That is why, tourism constitutes an important part of the Spanish GDP (16%) as well as of the construction industry (5.6%).

Best places to live in Spain

Spain, a dream destination where it has always been said that you can live very well… but which of all its cities is the best place to do it?

The latest survey conducted between October and November 2020 by the OCU (Organization of Consumers and Users), in which almost 3,000 Spaniards expressed their opinion regarding the quality of life in the 15 most populated cities in the country.

Each of the residents was asked to consider 10 criteria when making their judgment, which were: mobility, public safety, health services, educational services, cultural, sports and leisure facilities, pollution and environment, labor market, cost of living, real estate market and urban cleanliness. Vigo, Zaragoza and Bilbao were crowned as the cities best rated by their inhabitants.


The most important city in Galicia, home to one of the most emblematic ports in Spain and the hiding place of thousands of sunken galleons loaded with gold brought from America. Vigo not only stands out for its cultural richness, it was also the city that received the highest scores in terms of safety, cleanliness, education and environmental care. Its only notable weaknesses were the labor market and real estate.


On the other hand, Zaragoza, the city that saw the birth of the great artist Francisco de Goya, and which dazzles with its imposing and historic buildings such as the Basilica del Pilar, ranked second on the list thanks to its neighbors who rated it as very efficient in terms of mobility, health services, employment, education, culture, sports and leisure. It only fell short in cleanliness and waste management.


Third place went to Bilbao, a city that generated what architects and urban planners call “The Bilbao Effect”, which refers to the positive transformation the city underwent during a period of economic crisis in the 1990s. Bilbao went from being a purely industrial city to becoming a reference of modernity for its cultural activity and high quality of life. Its inhabitants did not do more than reflect the veracity of these facts through the survey, however they admitted that the cost of living and the labor market are aspects that could be improved.

The cost of housing in Spain, by province



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If you are going to live in Spain, you are probably interested in knowing the existing differences in price when renting or buying a property. The truth is that, depending on the provinces where you want to rent to live, the figures may vary a little.

To get a better understanding of the subject, it is relevant to divide the country into two geographical parts to understand its differences: the north and the south.

When buying accommodation, San Sebastian represents the most expensive city, followed by Barcelona and Madrid. On the other hand, the cheapest accommodations are located in Castellón de la Plana, Soria and Lugo.

As for the rental prices, the list is hardly any different. You will find the most expensive rentals in Barcelona, Madrid and San Sebastian; and the cheapest ones in Zamora, Caceres and Ciudad Real.

If you are really interested in knowing how to live in Spain, we leave you here our complete guide so that you know a little more about the process you should follow when renting a house abroad.

How to buy a house in Spain?

Currently, Spain is one of the countries with the fewest obstacles for foreigners looking to buy a property. To do so successfully, only the following requirements must be met:

Possess a NIE

You must have a Foreigner Identification Number, issued by the Ministry of the Interior. This document can be obtained in person, either through a representative in Spain, or through the Spanish embassy or consulate in the applicant’s country.

Open a Spanish bank account

Although it is not a legal obligation, it is strongly recommended that the foreign buyer has a Spanish bank account, as this will greatly facilitate the payment of taxes and other charges related to the accommodation; as well as utility bills (water, electricity, gas, among others). In addition, to be able to apply for a mortgage in a Spanish bank.

Use the services of a professional real estate agency

Some agencies are used to working with foreign buyers, so they will be able to guide you every step of the way if you want to invest in the real estate market. Some of them also have lawyers on staff who will be able to help you through the process.

How to find a residence?

The search for accommodation in Spain can be delegated to a real estate agency, which will be in charge of classifying the properties for sale in order to select and present those that meet the buyer’s criteria, so that he/she can make the final decision.

There are also many owners who decide to forego real estate agencies and list their property themselves. In these cases, the foreign buyer must contact the owner directly to inquire about the property, arrange a viewing and begin price negotiations.

If desired, the buyer himself can also do his own research through Tas Consultoria. Thanks to the quality of the services offered by this company, you can easily find a real estate agency that offers a wide range of services.

Taxes for homeowners

Spanish tax authorities have become increasingly active over the last decade. Paying taxes in the real estate market can save you money, but under-declaring your income can affect your chances of success in a possible resale of your property. Just as underreporting will also create greater capital gains appreciation at the time of resale.

Some unpaid local taxes, such as IBI, will be lumped together and recorded as charges on your property.  If the non-payment of your taxes is a simple oversight, the amounts will be increased by at least 5% of the value of the unpaid tax.

Is the tax rate in Spain advantageous?

Spanish tax rates and thresholds are decided by region; in general, a rate of around 20% is paid on the first €12,000 of income, with rates rising to 48% for incomes above €175,000 (in Catalonia) or €120,000 (in Andalusia).

This scheme seems less attractive than others, however, each individual benefits from a tax exemption of €5,500, which increases by €1,150 from their 65th birthday.

Housing finance: mortgage terms and conditions

In the case of acquiring a new property, the financial entity in charge of granting the loan will be the same entity that financed the construction project, but the buyer will have the option of subrogating the loan from this bank.

With respect to older homes, the buyer is free to choose the bank that offers the best mortgage loan conditions. Spanish banks no longer finance 100% of the appraised value of a property and its associated costs, but only up to 80%; this percentage is sometimes reduced to 50-60% for foreign buyers wishing to live in Spain.

Buying and selling houses in Spain

A private purchase contract is a legally binding document signed by the buyer and seller to ratify the successful sale of the property.

Before signing the purchase contract, it is advisable to verify that the property is free of rights, for which it is sufficient to request a simple mention of ownership to the cadastral services. (Land Registry).

Once the purchase contract is concluded, the buyer must obtain a public deed of ownership, which is a public document signed before a notary and which is then required to register the property with the cadastral services.

The costs associated with the granting of the public deed include the notary fees and the registration fees required by the cadastral services. For a property valued at 100,000 euros, the deed costs about 500 euros.

Retiring in Spain

Sun, sea, sand and sangria, what better setting than Spain to retire from a life of work! But is it as good as we imagine?

Blacktower Financial Managers Group ranked it as the second best country in Europe to retire in, using factors such as crime rates, cost of living, life expectancy, property prices and the age of the population.

In addition, the U.S. retirement organization AARP estimates that 22,500 euros per year is enough to afford a comfortable life in most of Spain.

Also, it is interesting to know that the cost of living for retirees in Spain is influenced by the benefits offered to retirees. A pensioner’s card offers you discounts ranging from 25% to 40% on the price of train tickets and other leisure activities.

We can say with certainty that investing in Spain can generate advantages for foreigners. Investing in the real estate sector in Spain, will give you opportunities that you never imagined, and unlike other countries, in Spain the real estate procedures are usually quite fast, as well as the corresponding registrations and contracts.

Finally, remember that in spite of the economic obstacles that have had to be overcome in the last year, it is a fact that even so, the housing market in Spain has been rapidly invigorated. Even for November and December, year-on-year increases of 1.9% and 3.65% were recorded.

According to INE data, these percentages are expected to continue to rise as restrictions continue to be lifted and the pandemic ends. Therefore, if you are interested in taking the opportunity to purchase a home, do not hesitate to consult TAS real estate services: click here.

Published on par Jonatan Carbonell

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