After Portugal, Spain is the second most popular property market for German-speaking emigrants. Costa Blanca, Costa del Sol, the Balearics, the Canaries - demand is huge and supply ranges from professional new-build projects to unrenovated ruins in the hinterland. The price range is enormous, and so is the quality.
Ownership law
Foreigners can acquire property in Spain without restriction. Plots, houses, apartments - all without limitation. Registration is made in the Registro de la Propiedad. An NIE number (foreigner identification number) is mandatory for every property purchase - no NIE, no purchase, no contract, no land-register entry. The application takes a few weeks but is straightforward.
What can go wrong: the Spanish land register is not always identical with the cadastre (Catastro). The land register says who owns it. The cadastre says how big it is and where the boundaries are. For older properties the two systems often do not match. Always check and compare both.
The illegal-build problem
Spain has an illegal-build problem on a scale found in no other European country. Between the 1960s and 2008, construction along the coasts proceeded as if there were no rules. In part there were none - or they were ignored.
Fact: the Spanish government estimates the number of illegal buildings at over 3 million. Many of them are traded quite normally on the market today - with a land-register entry. A land-register entry in Spain does NOT mean the building is legal. It only confirms ownership, not the building permit.
This particularly affects the coastal regions. On the Costa Blanca, the Costa del Sol and the Balearics there are thousands of properties sold without a valid Licencia de Primera Ocupación (first-occupancy licence). Without this licence you get no legal electricity and water connection, no insurance and, in the worst case, a demolition order.
What I check: Nota Simple (current land-register extract), Licencia de Obra (building permit), Licencia de Primera Ocupación (occupancy permit), Cédula de Habitabilidad (habitability certificate). If one is missing, that is a problem.
The coastal law (Ley de Costas)
Spain’s coastal law protects a strip of 100 metres from the shoreline. In this zone building is prohibited - and existing buildings hold a time-limited concession, not a permanent building permit. This also affects properties that have stood for decades and are normally registered in the land register.
Properties bought within this zone can, in theory, be demolished without compensation after the concession expires. This rarely happens, but the risk exists and depresses resale value. Always have properties in the coastal strip checked for their Ley-de-Costas status.
New builds and developers
Spain’s developer market has professionalised since the 2008 crisis. There are reputable developers with bank guarantees, milestone-based payment plans and solid build quality. But there are also still projects that look professional on paper and have problems in reality.
Typical weak points in coastal new builds: polystyrene external insulation under high solar exposure (the same issue as in Portugal), poor waterproofing on roof terraces and flat roofs, thin walls (20 cm hollow brick) without thermal mass, air-conditioning as the only cooling. It works technically, but is energy-inefficient and questionable in building-physics terms.
Since 2008 the developer-protection law applies: on off-plan purchases the developer must provide a bank guarantee or insurance for deposits. Without this guarantee, no money should flow.
Existing properties
Older properties in Spain - especially fincas in the hinterland - have typical problems: damp (missing horizontal barrier), outdated electrics, plumbing of galvanised steel (corroded), flat roofs that are not watertight. Add the illegal-build issue: extensions, pools, garages built without a permit that become a problem on sale.
Renovation rule of thumb: for Spanish fincas and old buildings I always budget 40-70% of the purchase price for renovation. Anyone who plans less will be surprised. Anyone who uses photos as a basis for decisions instead of sending an expert pays twice.
Taxes and transaction costs
New build: 10% IVA (VAT) + 1.5% stamp duty (AJD). Existing stock: 6-10% ITP (transfer tax, varies by region). Plus notary, Registro and Gestoría - together typically 10-13% transaction costs on the purchase price. Annual property tax IBI, non-resident income tax on the cadastral value (even without rental income).
What does building in Spain cost?
Turnkey standard: 1,300-2,000 EUR/m² on the coasts. Cheaper inland: 1,000-1,500 EUR/m². Premium with natural stone and high-end systems: 2,000-3,000 EUR/m². The Balearics are more expensive: 1,800-2,800 EUR/m² at standard level. Land prices vary extremely - from 50 EUR/m² in the hinterland to 1,500 EUR/m² on the beachfront.
My property check for Spain
You send me the documents - listing, Nota Simple, purchase contract, photos. Within 48 hours you get a structured report: ownership, building permit, illegal-build status, building fabric, location, price. A clear recommendation: buy, renegotiate or walk away.
750 EUR flat. No interest of mine in the deal going through.
Do you have a property in Spain?
→ GET CHECKED NOWBenjamin Fercher reviews foreign property independently and without commission. His reports are confidential and exclusively in the buyer’s interest.