Buying in Madrid from abroad: the process, step by step.
You can buy a home in Madrid without being resident in Spain, and without travelling to sign. What changes is the order: some formalities are best in place before you find the house.
In this article6 sections
Buying a home in Madrid without living in Spain is entirely possible. You do not need to be resident or to have a company here, and the transaction comes with two safeguards that many overseas buyers are not aware of: a notary who checks the transaction and attests the signing, and a Land Registry that protects what you have bought against third parties.
What does change when you buy from another country is the order. Some formalities take weeks and are best started before you find the house, not after. This is the full route, in the order in which we coordinate it with our clients.
Before you start looking: your NIE and a Spanish bank account
The first step has nothing to do with houses. To buy in Spain you need an NIE, the Número de Identidad de Extranjero, or foreigner’s identity number. It is the number under which you will sign the deed, pay the taxes on the purchase and be recorded in the Land Registry.
You apply for it at a Spanish consulate in your country or, if you are in Spain, through the National Police. Someone holding a suitable power of attorney can also apply on your behalf. Waiting times vary by office and by time of year, so it makes sense to apply as soon as the purchase stops being just an idea.
With your NIE, open an account with a Spanish bank; it can be a non-resident account. It is not a legal requirement for buying, but in practice it makes almost everything simpler: the taxes are paid from it, the community fees, IBI and utility bills are set up as direct debits, and there is a clear trail of the money.
That last point matters. Anti-money-laundering rules require banks and notaries to know where the funds come from, and the deed records how the price was paid. Having the paperwork ready (where your savings come from, the sale of another property, an inheritance) avoids delays at the worst possible moment: the week of completion.
If you cannot be there: power of attorney
You can come to Madrid to sign, and many buyers prefer to. But you do not have to. With a power of attorney (poder notarial), someone you trust can sign the arras contract, the deed and the later formalities on your behalf.
The power can be granted before a notary in Spain or in the country where you live. If it is signed abroad, there are two usual routes: at a Spanish consulate, or before a local notary with the Hague Apostille, if your country is party to the convention, plus a sworn translation if it is not in Spanish.
What matters is the wording. A power of attorney that is too general may not cover a specific transaction, and one that is too narrow has to be redone if anything changes, such as the price or the date. It is worth having a lawyer in Spain review it before you sign, and making sure it also covers the mortgage if you are financing the purchase.
A well-drafted power of attorney is the difference between signing from a distance with peace of mind and catching a flight at three days’ notice.
The reservation and the arras contract
When the right house appears and the price is agreed, the usual step is to reserve it. Sometimes a short reservation document is signed first, with a small payment, which takes the property off the market while the arras contract is prepared.
The arras contract is the real commitment. It is a private contract that sets the price, the deadline for signing the deed, who pays each cost and the condition in which the house is handed over. The buyer pays an amount on account of the price, typically around 10%, although it is negotiable.
The most common form is arras penitenciales: if the buyer pulls out, they lose the deposit; if the seller pulls out, they pay it back twice over. It is a reasonable balance, provided the contract is signed once the legal review has been done, or with conditions that protect the buyer if a problem comes to light. Signing arras without first reading the nota simple is a mistake that can prove expensive.
The same goes for the mortgage. If you are financing the purchase and the bank does not approve it in time for completion, under arras penitenciales the deposit is lost, unless the contract provides for that situation. That is why it is wise to review the financing with the bank before signing the arras, and to set a completion date with some margin.
Due diligence: what is checked before you sign
Before any money is committed, the property is reviewed on four fronts. It is the same analysis we use to select every opportunity, now applied to the specific house.
- Legal
- The nota simple from the Land Registry shows who the owner is, how the property is described and what charges it carries: mortgages, court attachments, easements. We also check that there are no debts with the community of owners and no unpaid IBI.
- Technical
- The condition of the building and of the flat: structure, façade, roof, services, the renovations carried out and any works the community has approved or is considering.
- Commercial
- Whether the price is consistent with what has actually sold in the area, not just with what is advertised.
- Financial
- The full cost of buying and keeping the property and, if it is an investment, its numbers, worked out prudently.
The seller must also provide the energy performance certificate, which is compulsory for selling a home. And before completion, the notary checks the Land Registry again to confirm that nothing has changed.
Signing before the notary
The sale is formalised in a public deed, the escritura pública, signed before a notary. The notary identifies the parties, checks the property’s position at the Land Registry, goes through the deed and attests the signing. If your Spanish is not fluent, you can sign with an interpreter.
The balance of the price is paid at the same appointment, usually by bank transfer or banker’s draft, and the keys are handed over. If you are buying with a mortgage, the bank signs its own deed at the same notary’s office, on the same day.
After completion: taxes and registration
Once the deed is signed, two formalities remain. The first is paying the tax on the purchase: for a resale home in the Community of Madrid, transfer tax (Impuesto sobre Transmisiones Patrimoniales) at 6%; for a new build, VAT at 10% and stamp duty (Actos Jurídicos Documentados). We explain this in detail in What buying a home in Madrid costs.
The second is registering the deed at the Land Registry. Registration is what protects your purchase against third parties, which is why it is always done. A gestoría, an administrative agency, usually handles both, working with the notary’s office.
How we work at ARENZA
In private advisory we act solely on behalf of the buyer. We coordinate the NIE, the bank account, the power of attorney, the review of the property, the negotiation and the signing with trusted lawyers, tax advisers and surveyors, so that you can make decisions from wherever you are, with the same information you would have if you lived in Madrid.
Before the arras, we review the financing with you, together with the source-of-funds documentation that banks and notaries require. If you would rather see the homes in person, we time the search to your trip so that what you visit is still available; if you cannot come, we show them to you on a video call.
