Financing a new-build home in Spain as a non-resident buyer

When you buy a resale home in Spain, the mortgage and the purchase usually close on the same day, at the notary. Off-plan works differently: the developer asks for a reservation payment, then further instalments as construction advances, and the final balance only on completion. A mortgage, by contrast, is normally drawn down once the property legally exists and can be registered as security.

That gap between paying the developer and drawing the loan is the part buyers from the United Kingdom find hardest to picture. It is manageable, but it needs to be planned from the first instalment, not discovered later.

Off-plan contracts in Spain typically set out a reservation fee, one or more staged payments tied to construction milestones, and a final payment on completion, when keys and title are handed over. Spanish law requires developers to guarantee these advance payments, usually through a bank guarantee or insurance policy, so ask to see that document before signing anything.

Because a mortgage is a loan secured on a finished, registered property, banks are generally reluctant to release funds against a home that is still a hole in the ground. In practice, most non-resident buyers cover the early instalments from savings or bridging arrangements in the buyer's home country, and reserve the mortgage for the final balance due at completion.

A Spanish bank valuation (tasación) is a condition for any mortgage, and for a new build it is done in two steps. Early in the process, the valuer works from the architect's project, the licence and the developer's specifications, producing an estimated value on completion. Closer to handover, once the building is finished and registered, a further valuation confirms the actual property before the loan is formally drawn down.

This means the loan amount offered early on is provisional. The bank will usually confirm final terms once the home is complete, matches the original project, and can be inscribed at the land registry in your name. Delays in construction can therefore also delay, though not necessarily reduce, when the mortgage funds actually move.

Spanish banks usually ask non-residents for a larger deposit than they would ask a resident buyer; the exact share depends on the bank, your country and your financial profile, so we compare offers rather than quote a single figure. Proof of income and existing debts from the United Kingdom, such as recent payslips or a P60 and your last Self Assessment return, are generally required, often with a sworn translation into Spanish.

Mortgage terms in Spain usually run until the borrower is around 70 to 75 years old, and you can choose between fixed, variable (Euribor-linked) or mixed rates. None of this changes because the property is new build rather than resale; what changes is simply the timing of when the loan is actually released.

New builds carry 10% VAT plus stamp duty rather than the regional transfer tax applied to resale homes, and you should also budget separately for notary, land registry, gestoría fees and the bank's own valuation charge. Once you own the property, as a non-resident you will file an annual non-resident income tax return (Modelo 210); a local tax adviser can confirm, under the double taxation agreement between Spain and the United Kingdom, exactly how this interacts with what you report to HMRC.

If you later sell, the buyer withholds 3% of the price on account of your Spanish tax, a mechanism worth remembering even at the buying stage, since it shapes how any future sale in Spain will be settled.

Off-plan projects can take a year or more to complete, during which sterling and the euro will move against each other more than once. Because you are converting funds at several points, from reservation to each instalment to the final balance, it is worth discussing currency timing with your adviser rather than treating each transfer as an isolated decision.

Remember, too, that the Golden Visa route tied to property investment ended on 3 April 2025 and is not available for new applications. As a UK citizen you can stay in Spain for up to 90 days in any 180-day period without a visa; anything longer, including time spent overseeing a build, requires a separate visa or residence permit.

Spain is a relatively short flight away from most UK airports, making regular visits to a Spanish property straightforward for owners based in Britain. Many British buyers are drawn to Spain for its climate, coastal lifestyle and established expatriate communities. One practical point to bear in mind is that Spanish inheritance law differs from UK rules, so it is worth taking specific advice on how it may affect the property and one's estate. Currency movements between sterling and the euro can also affect the overall cost of purchase and ongoing expenses.

Spain and the United Kingdom have a double taxation agreement in place, and a local tax adviser should confirm how rental income or gains from Spanish property must be declared and reported to HMRC.

As the United Kingdom is no longer an EU member state, British citizens may stay in Spain for up to 90 days in any 180-day period without a visa, and must apply for a visa or residence permit for longer stays.

Since the United Kingdom uses the pound sterling (GBP) rather than the euro, buyers should factor in exchange-rate movements and currency conversion costs when paying for a property or transferring funds to Spain.