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Pitfalls of Buying Property in Spain: How to Avoid Costly Mistakes?

Pitfalls of Buying Property in Spain: How to Avoid Costly Mistakes?

Created23.02.2026, 10.22

Updated23.02.2026, 11.28

Spain continues to attract investors from all over the world due to its lifestyle benefits, strong tourism demand, diverse property types, and a transparent ownership system. Further, the buying process is considered relatively straightforward compared to many other European countries.

Common Mistakes Buyers Make in Spain When Buying a Property However, “highly-demanded” or “easy to buy” does not mean “risk-free.” There are, of course, some hidden pitfalls of buying property in Spain for foreigners based on legal complexities, financial surprises, and regional differences. All of these Spanish property market risks can create serious problems if you move forward without structure. For this reason, we have prepared this detailed and structured guide.

The Most Common Mistakes Foreign Buyers Make in Spain & How to Avoid Them

In this section, we will be answering the questions such as “what are the pitfalls of buying property in Spain?” and “how to avoid property pitfalls in Spain?”. By following the step-by-step framework below, you can identify these mistakes early and protect your investment with confidence.

1. Making Poor Market Research

Every safe purchase begins with strong research yet many buyers start with property viewings before fully understanding the market.

Spain is not one single market. Each region has its own property taxes, urban planning regulations, rental rules, price dynamics, and demand patterns. For example, short-term rental licenses vary significantly between regions. Some cities limit new tourist licenses, which directly affects rental income expectations. So, you must pay attention to these kinds of legal risks when buying property in Spain.

What To Do Instead:

Study regional regulations, future development plans, rental laws, and price trends before shortlisting properties. This way, you can add strategic clarity to the whole process.

2. Underestimating Total Purchase Costs

Once the market is selected, you should be careful about financial planning. Many buyers focus only on the property price and forget the additional property purchase costs in Spain. But, total acquisition costs usually range between 10% and 15% of the purchase price. These include:

Transfer tax (ITP) for resale properties
VAT (IVA) and stamp duty for new builds
Notary fees
Land registry fees
Legal fees
Mortgage arrangement costs
Property valuation fees
Bank charges

On the other hand, there are also ongoing costs such as:

Annual property tax (IBI)
Community fees
Non-resident income tax
Maintenance and insurance

What To Do Instead:

Calculate full purchase costs including all of the Spanish property taxes for foreigners, notary and legal fees, and any ongoing expenses before committing to the purchase.

3. Not Obtaining NIE and Opening a Spanish Bank Account Early

One of the most common legal pitfalls of buying property in Spain is failing to obtain an NIE number. Before signing any legally binding agreement, you must secure an NIE (Número de Identidad de Extranjero). This tax identification number is mandatory for all property transactions in the country. Without an NIE, you cannot complete the purchase at the notary, register utilities or pay property taxes.

In addition, opening a Spanish bank account is essential to complete payments and manage ongoing property expenses.

What To Do Instead:

Apply for your NIE and open a Spanish bank account before paying any reservation deposit or signing any preliminary agreement.

4. Overexposure to Off-Plan Developer Risk

Nowadays properties for sale in Spain, especially off-plan projects, attract many buyers, as they offer modern designs, staged payments, and price advantages during construction. However, they also introduce some developer-related risks including construction delays, specification changes, and delayed building licenses. But it is also very easy to avoid these.

What To Do Instead:

When investing in an off-plan property in Spain, it is essential to carefully research the developer’s track record to ensure they are reputable and reliable. Confirm that the necessary building licenses have been granted before making any major payments. Do not rely solely on marketing materials or verbal assurances, as independent verification.

At this point, if you are wondering how to verify building licenses in Spain, we can say that you should request a copy of the building license (Licencia de Obra) directly from the developer and verify it with the local Town Hall (Ayuntamiento) where the project is located.

5. Not Paying Attention to Risks of Buying an Old “Cortijo” in Spain

Traditional rural homes, known as cortijos, usually attract buyers seeking space and authenticity. Yet here are some rural property risks in Spain. These commonly include agricultural land restrictions, lack of proper registration, missing habitation licenses, illegal extensions, water supply or septic tank problems, and structural damage due to age.

What To Do Instead:

In order to protect yourself from such situations, you need to conduct technical inspections and confirm legal status with the local town hall before committing.

6. Mismanaging Renovation and Permit Requirements

Many buyers plan to renovate their property after purchase. However, renovations in Spain are strictly regulated and failing to follow the correct procedures can result in delays, fines, or legal issues. Depending on the scope of the work, you may need:

A minor works permit (Licencia de obra menor)
A major works permit (Licencia de obra mayor)
Supervision by a qualified architect
Approval from the community (for apartments or properties within a development)

In addition, property renovation costs in Spain can increase unexpectedly due to hidden structural issues or required compliance upgrades discovered during the works. But with proper planning and obtaining the correct permits you can avoid costly complications.

What To Do Instead:

Obtain technical assessments before purchase and confirm renovation feasibility legally.

7. Skipping Comprehensive Due Diligence

Another important aspect is due diligence. It is the backbone of secure property transactions and involves verifying:

Legal ownership
Urban classification
Outstanding debts
Community fee status
Planning compliance
Energy certificate
Habitation license

Failing to conduct proper property due diligence in Spain may result in inheriting unpaid taxes and community debts. To check property debts in Spain, you must obtain an updated Land Registry extract (Nota Simple), request a certificate of debt from the community of owners, and ensure that local property taxes (IBI) and utility payments are up to date.

What To Do Instead:

Now that you know how to check property debts in Spain, you should keep in mind that you need to ensure a complete document review before signing the private purchase contract.

8. Failing to Verify the Title Deed Properly

The title deed (Escritura Pública) is the official document signed before a notary that confirms you are the legal owner of the property. However, sometimes there are differences between what is written in it, what is recorded, and the actual physical condition or size of the property.

For example, there may be extensions or changes that were never officially registered. These unregistered modifications can cause problems later, especially if you want to sell the property or apply for a mortgage.

What To Do Instead:

Make sure that registry data matches the physical structure exactly before completion.

9. Ignoring VPO Legal Restrictions

VPO properties (Viviendas de Protección Oficial) are government-subsidized homes sold below market value to make housing more affordable. While the lower price can be attractive, these properties come with strict legal conditions, including:

Limits on the resale price
Restrictions on renting the property
Specific buyer eligibility requirements
Obligations to use the property as your primary residence

What To Do Instead:

So, buying a VPO property in Spain without fully understanding these rules can significantly limit your flexibility as an investor and may affect your ability to sell or rent the property freely in the future.

10. Signing Contracts Without Full Legal Clarity

Reservation contracts and private purchase agreements in Spain are legally binding documents. In most cases, the buyer pays a deposit of around 10% of the purchase price. So if you withdraw from the transaction without valid legal grounds, this deposit can be forfeited.

On the other hand, language barriers often increase the risk of misunderstanding important clauses, particularly those related to completion deadlines and cancellation rights.

Therefore, signing without fully understanding all of these terms can lead to unexpected financial loss or legal complications.

What To Do Instead:

Make sure you clearly understand every clause before signing any agreement, and consider having the contract reviewed or translated by an independent legal professional.

Can You Navigate Spanish Property Pitfalls Without a Lawyer?

Spanish law does not require buyers to appoint a lawyer. Usually, the notary ensures legal compliance during signing. However, the notary does not represent the buyer’s personal interests or carry out detailed checks on their behalf.

So the answer is yes, it is technically possible. Yet it is better to collaborate with professional real estate companies who will offer you proper guidance, like TEKCE Real Estate in order to reduce the risks of buying property in Spain. By collaborating with us, you can make the process easier by: