The mistakes to avoid when buying property in Spain as a British or Scandinavian buyer
Buying in Spain is no riskier than buying anywhere else. It simply works differently from UK and Nordic property law on around ten specific points , and it is those points, not the vocabulary or the language, that cost foreign buyers money. Here are the eight that come up most often in our files, each with the concrete step that avoids it. Every rule quoted here is sourced at the bottom of the page.
One principle before we start. All of these traps close at the same moment: between the first offer and the signing of the deposit contract (arras). After that, it is almost always too late. That is why the checks are done before committing a single euro, not at the notary’s office.
1. You will pay tax on a value you did not negotiate
This is the most counter-intuitive trap for a foreign buyer, and the most expensive when it closes.
Since the introduction of the valor de referencia catastral (reference cadastral value), the taxable base for ITP (transfer tax) is not the price you pay: it is the higher of the two , the agreed price or the reference value calculated by the Directorate General for the Cadastre.
In practice: you negotiate a flat brilliantly down to €180,000 while its reference value is €220,000. You will pay ITP on €220,000. In Andalusia, at 7%, that is €2,800 of tax your negotiation did nothing to reduce.
The step: check the property’s reference value before making an offer, and factor the difference into your numbers. It can be challenged, by correcting the self-assessment with a valuation report, but that is a procedure, not a formality. Better to know about it in advance.
2. The previous owner’s debts follow the property
Many buyers assume unpaid community fees remain the previous owner’s problem. In Spain, they do not.
Article 9.1.e of the Ley de Propiedad Horizontal (the Spanish law on owners’ communities) attaches the debt to the property: the new buyer is liable for the current year plus the three previous calendar years. The liability is in rem, not personal: you are not the debtor, but the flat you have just bought is answerable for the debt.
The law protects you in part: at completion the seller must provide a certificate from the community of owners confirming they are up to date. Without it, the notary cannot authorise the deed.
The step: insist on the certificate, of course, but also ask for the actas (minutes) of the latest owners’ meetings. A derrama (special levy for works) that has been voted but not yet called appears on no certificate, and it will be yours to pay.
3. If the seller is non-resident, you must withhold 3%
On the Costa del Sol, a large share of sellers are themselves non-resident foreigners. And in that case, Spanish law turns the buyer into a tax collector.
You must withhold 3% of the sale price, not pay it to the seller, and pay it to the Spanish Tax Agency using modelo 211, within one month of completion.
If you do not: penalties, surcharges, late interest and, above all, the property you have just bought can be charged with the seller’s tax debt. You paid the full price, and you inherit someone else’s tax bill.
The step: establish the seller’s tax residence before signing, not on the day. It is a simple question that is almost never asked spontaneously.
4. The deposit contract is not a simple reservation
Many foreign buyers sign an arras contract believing they can always walk away by losing their deposit. In the most common case that is wrong, and that is where it gets serious.
Spanish law recognises three types of arras:
- Arras penitenciales (article 1454 of the Civil Code): the only kind that lets you withdraw. A buyer who withdraws loses the deposit; a seller who withdraws pays it back twice over.
- Arras confirmatorias : they confirm a contract that is already binding. No right to withdraw. The injured party can demand that the sale be enforced, or that it be terminated with damages.
- Arras penales (article 1152): they set the compensation for breach in advance.
And here is the catch. If the contract does not specify the type of arras, case law treats them as confirmatorias. The right to withdraw must be agreed “de forma clara y expresa”, clearly and expressly. In other words: a deposit contract that says nothing does not let you walk away by forfeiting your deposit : it commits you to buy.
The step: check that the contract states in black and white arras penitenciales and refers to article 1454, if that is what you want. A contract that just says “arras” does not protect you.
5. The country house that never had planning permission
This one is very Andalusian, and mainly concerns villas and fincas inland.
Part of the housing stock on non-developable land was built without a building licence or a first occupation licence. Regularisation goes through a declaration of assimilated to out-of-planning status (AFO / DAFO), which recognises that the building exists and has stood for a long time.
What the DAFO does, and above all what it does not do:
- It does not legalise the building: it records a situation.
- It does not authorise any extension or alteration to the structure. You can carry out non-structural renovation, but not add a bedroom or enclose a terrace.
- Some banks accept it in place of a first occupation licence for a mortgage; others do not.
And with no DAFO at all: exposure to fines, to orders to restore the land, and serious difficulties the day you want to sell or remortgage.
The step: ask for the first occupation licence or the DAFO before making an offer. And be wary of the line “all the houses round here are like that”: it is often true, and it is still your problem.
6. You will pay tax even if you never let the property
It is the second-year surprise, and it catches almost every foreign buyer.
A non-resident who owns a home in Spain and uses it only for themselves is taxed on imputed property income : a notional income, calculated on the cadastral value, that the tax authority considers the property earns you simply because you own it.
| Item | Rule |
|---|---|
| Base | 1.1% of the cadastral value if it has been revised in the last ten years, otherwise 2% |
| Rate | 19% for residents of the EU (including Sweden, Denmark and Finland), Norway and Iceland; 24% for UK residents and other non-EU residents |
| Return | Modelo 210, which can be filed throughout the following calendar year |
The step: build it into your annual budget from day one, alongside IBI (council tax) and community fees. The amount is never large, but discovering a Spanish filing obligation two years late is.
7. On your rental income: 19% or 24%, and since Brexit the difference matters
Many articles quote a single rate for Spanish rental income, and it is often the wrong one for you. The rate depends on your country of tax residence, not your nationality.
Residents of Sweden, Denmark, Finland and the rest of the EU, as well as Norway and Iceland, fall under the European regime. Since Brexit, UK residents fall under the general non-EU regime. The Spanish Tax Agency is explicit: 19% for residents of the EU, Iceland and Norway; 24% for everyone else.
The second difference is at least as important: an EU or EEA resident can deduct their expenses : community fees, IBI, insurance, maintenance, mortgage interest, provided they are directly linked to the income earned in Spain. A non-EU resident, including a UK resident, is taxed on gross income.
Rental income is declared quarterly : in the first twenty days of April, July, October and January.
The step: check which regime applies to you before working out your yield. Between 24% on gross income and 19% on income net of expenses, the gap in your real return is considerable.
8. The right to holiday let is not sold with the property
This is the trap of the moment on the Costa del Sol, and the most expensive of all, because it wipes out the whole project rather than trimming the margin.
The rule changes from one town to the next , and sometimes from one building to the next on the same street:
| Town | New licence | Who decides |
|---|---|---|
| Málaga city | Frozen | The town hall |
| Torremolinos | Still possible | The Junta de Andalucía (RTA register) |
| Benalmádena | Possible… unless vetoed | The community of owners |
| Mijas | Possible | The Andalusian decree |
| Estepona | Possible | The Andalusian decree |
The case we should all learn from. In Benalmádena, a company bought a flat in October 2024 with its administrative holiday let registration in hand. The Land Registry refused the tourist use: the community statutes had banned it since 2020, and that ban was recorded at the registry. The refusal was upheld (BOE no. 37 of 11 February 2026). An administrative authorisation does not override a ban recorded at the Land Registry.
The step: read the community statutes before making an offer, and check the town’s rule as it stands today, not in last year’s blog post. We publish a detailed guide by town, updated and dated.
What this page does not replace
These eight points are the most common, not the only ones. And above all: each one has to be checked property by property. A nota simple, community statutes, a community certificate and a reference value: four documents to obtain and read. That is an hour’s work per property, and it is what separates a calm purchase from a file that goes wrong.
I am neither a lawyer nor a tax adviser: I work with professionals whose job that is, and I tell you when a question falls to them. What I do is spot the problem early enough for it to still be fixable.
VivaStay is an estate agency on the Costa del Sol. If you have a property in mind, the first call costs nothing: +34 951 550 733, or use the contact form.
Frequently asked questions
Can a British buyer purchase property in Spain?
Yes. Nationality is no bar: UK and other non-EU buyers purchase on the same terms as Spanish nationals, apart from exceptional cases in areas of defence interest. You need an NIE (foreigner identification number) and a Spanish bank account for the transaction. Since Brexit, UK citizens can only stay 90 days in any 180-day period in the Schengen area without a visa, which matters if you plan long stays.
What is the most common trap on the Costa del Sol?
The 3% withholding when the seller is non-resident, because a large share of sellers here are, and because the obligation falls on the buyer, who is almost always unaware of it. The most expensive one, however, is the right to holiday let: it does not reduce the margin, it cancels the project.
Do I need a lawyer to buy in Spain?
It is not compulsory, and it is strongly recommended for a first purchase. Allow around 1 to 1.5% of the price. The Spanish notary authenticates the deed but does not act as your adviser the way a solicitor or conveyancer would in the UK: they will not check the community statutes or the planning status of the property for you.
Can I pull out after signing a deposit contract?
Only if the contract expressly provides for arras penitenciales within the meaning of article 1454 of the Civil Code. Without a clear statement, case law treats them as confirmatorias : the seller can then demand that the sale goes ahead. It is one of the most dangerous differences with England and Wales, where nothing binds you before exchange of contracts.
How much does a purchase in Spain cost on top of the price?
In Andalusia, for a resale property: ITP at 7% (on the price or the reference cadastral value, whichever is higher). For a new build: VAT at 10% plus AJD (stamp duty) at 1.2%. Add notary fees, Land Registry registration and a gestoría. Reduced ITP rates exist for certain profiles, subject to conditions on the property’s value.
Will I pay tax in Spain if I do not let anything?
Yes. A non-resident who owns a property that is not let declares imputed property income: 1.1% of the cadastral value if it has been revised in the last ten years, 2% otherwise, taxed at 19% for residents of the EU, Norway and Iceland and at 24% for UK and other non-EU residents, using modelo 210.
Sources
- Reference cadastral value as the ITP base (the higher of the price and the reference value): Santalucía, consulted on 9 September 2026.
- Community debts: article 9.1.e of the Ley de Propiedad Horizontal, current year plus three previous calendar years, liability attached to the property, certificate required at completion: Mundojurídico, consulted on 9 September 2026.
- 3% withholding and modelo 211 when the seller is non-resident, one-month deadline, risk of the property being charged with the tax debt: Euroval, consulted on 9 September 2026.
- Types of arras and presumption of arras confirmatorias without an express clause; articles 1454 and 1152 of the Spanish Civil Code: Docón Abogados, consulted on 9 September 2026.
- Declaration of assimilated to out-of-planning status (AFO / DAFO) in Andalusia, scope and limits: Fortuny, consulted on 9 September 2026.
- Imputed property income (1.1% / 2% of the cadastral value) and modelo 210 deadline: Costaluz Lawyers, consulted on 9 September 2026.
- Non-resident income tax (IRNR) rates: 19% for residents of the EU, Iceland and Norway, 24% for others; deductibility of expenses for EU residents; quarterly declaration of rental income: Agencia Tributaria (sede.agenciatributaria.gob.es), consulted on 9 September 2026.
- Purchase taxes in Andalusia (ITP 7%, AJD 1.2%): Guía Fiscal and Rankia, consulted on 9 September 2026.
- Refusal to register tourist use in Benalmádena: decision of the Dirección General de Seguridad Jurídica y Fe Pública of 17 October 2025, published in BOE no. 37 of 11 February 2026 (BOE-A-2026-3182).
VivaStay Costa del Sol. Hannah De Oliveira, estate agent API 525, Málaga. Information up to date as of 9 September 2026 and subject to change. This page is an information guide and does not replace advice from a lawyer or tax adviser on your situation.
