Madrid is one of the most sought-after destinations in Europe for international buyers. The process is absolutely feasible as a foreigner—but it comes with its own specifics. Here are the ones that actually matter.
Can a foreigner buy property in Madrid?
Yes—without restrictions. Citizens of the European Union can purchase property in Spain under exactly the same conditions as Spanish nationals. Non-EU citizens can also buy without limitations in most cases, with one key requirement: obtaining an NIE before signing any formal documents.
What does change if you’re a non-resident is the financing process, certain administrative requirements, and—very often—your level of familiarity with the market and legal framework. That’s exactly where the difference between buying well and buying poorly becomes most visible.
The NIE: the essential first step
The Número de Identificación de Extranjero (NIE) is your tax identification number for any financial transaction in Spain, including purchasing property. Without it, you cannot sign a deed, open a Spanish bank account, or pay taxes correctly.
You can apply for the NIE at the Spanish consulate or embassy in your country of residence, or directly in Spain through immigration offices or designated police stations. The process typically takes between one and four weeks, depending on the channel and demand. It can be arranged before the purchase—or even delegated to a representative in Spain.
Mortgages for non-residents: how banks approach it
Financing is where the biggest differences appear between resident and non-resident buyers. Spanish banks apply stricter conditions to non-residents, mainly in terms of loan-to-value:
→ Residents: up to 80% of the property valuation
→ EU non-residents: typically 60–70%, depending on the bank and profile
→ Non-EU buyers: generally 50–65%
This means that if you’re buying a €500,000 property as a non-resident, you should expect to contribute between €150,000 and €200,000 in equity—plus acquisition costs (another 7–9% in Madrid).
Banks will usually require: passport, NIE, tax returns from your country of residence for the past 2–3 years, recent bank statements, and proof of income. Foreign documents typically need to be officially translated into Spanish.
Taxes and purchase costs in Madrid as a foreign buyer
Taxes are the same for residents and non-residents.
In Madrid, transfer tax (ITP) for resale properties is 6% of the purchase price. For new-build properties, you pay 10% VAT plus stamp duty (AJD, 0.75% in Madrid).
As a reference, for a €400,000 property in Madrid:
→ ITP (6%): €24,000
→ Notary, registry, legal/admin: ~€2,000
→ Total costs: ~€26,000 (around 6.5% of the price)
Additionally, if you are a non-resident and rent out the property, you will be subject to Non-Resident Income Tax (IRNR):
→ EU residents: 19%
→ Non-EU residents: 24%
Why buyer representation matters even more for international clients
Buying in a market you don’t know, within a different legal system—and sometimes in a different language—amplifies every typical real estate risk. And the pace of the Madrid market doesn’t wait for you to catch up.
At Lora Galeva, we regularly work with international buyers. The team operates in Spanish, English, Italian, and Bulgarian, understands the specific process for non-residents, and has experience coordinating NIE applications, banking, and notary processes—even when the buyer isn’t physically present in Madrid throughout the transaction.
