Financing a new-build in Spain, what you need to know
If you’re considering financing a new-build property in Spain, there are several key things to be aware of. From the buying process and mortgage options to legal requirements, it can feel a bit daunting, especially if you’re unfamiliar with how the Spanish property market works.
In this article, we’ll walk you through everything you need to know about purchasing a newly built home in Spain with the help of a mortgage.
What is the process for buying new-build property in Spain with a mortgage?
Many people relocating to Spain, or searching for a holiday home, opt for a new-build property due to its modern specifications and the option to personalise the layout and finishes. However, the buying process in Spain is different from what you might be used to in the UK or elsewhere.
When buying a newly built property in Spain, mortgage financing is only arranged once the construction is fully completed and the property is officially registered with the Spanish Land Registry (Registro de la Propiedad). In addition, all required permits must be in place, including the Cédula de Habitabilidad (certificate of occupancy), which confirms the property is legally fit to live in.
This means you cannot secure a mortgage before the property is fully finished. Spanish banks only release the funds once all legal conditions have been met. This is quite different from the UK process, where financing is often arranged in advance, even before construction is complete.
How do you finance a new-build property in Spain?
A common question is: How do I finance a newly built property in Spain? The answer largely depends on when you decide to buy and when the property is due to be completed.
In Spain, mortgage financing is only available once the property is fully built. This means you’ll typically need to cover a large part of the purchase price with your own funds upfront. The deposit can range from 20% to 50% of the total price, depending on the developer and the project.
The remainder can only be financed once the property has been delivered and officially registered. In most cases, Spanish banks will offer mortgages of up to 70% of the official valuation (which may be different from the purchase price). As a result, a significant personal contribution is always required, especially if your deposit exceeds 30%.
What are the requirements for getting a mortgage in Spain?
To qualify for a mortgage on a new-build property in Spain, the property must meet specific conditions. It must be officially registered in the Spanish Land Registry (Registro de la Propiedad) and have all the necessary permits in place. One key document is the Cédula de Habitabilidad (certificate of occupancy), which confirms that the property is legally fit for habitation.
As a result, the mortgage approval process is directly linked to the progress of the construction and the completion of all legal and administrative steps.
If you’re purchasing a property that is still under construction, you’ll need to wait until it is fully completed and approved by the Spanish authorities before you can apply for a mortgage. This can delay access to financing, so it’s important to plan ahead and ensure you have sufficient funds to bridge the period between signing the purchase agreement and final handover.
