Financing new-build property in Spain: What to know
If you're thinking about financing a new-build property in Spain, there are several important aspects to keep in mind. From the purchase process and financing options to the legal requirements, it can seem complex, especially if you're not familiar with the Spanish real estate market.
In this article, we’ll explain everything you need to know about buying a newly built property in Spain with the help of financing.
What is the process for buying new-build property in Spain with a mortgage?
Many people moving to Spain, or looking for a holiday home, choose a new-build property because of its modern features and the ability to personalise the home to their preferences. However, the buying process in Spain differs from what you may be used to in other countries.
When purchasing a newly built property in Spain, mortgage financing is only arranged once the construction is complete and the property is officially registered in the Spanish Land Registry (Registro de la Propiedad). Additionally, all necessary permits must be in place, including the Cédula de Habitabilidad (certificate of occupancy), which confirms that the property is suitable for living.
This means you cannot secure mortgage financing before the property is fully finished. Spanish banks only release the loan once the property meets all legal requirements. This differs significantly from the process in many other countries, where financing is often secured earlier, even before construction is completed.
How do you finance a new-build property in Spain?
A common question is: How can I finance a newly built property in Spain? The answer depends largely on when you decide to purchase the property and when it's expected to be completed.
In Spain, mortgage financing is only available once the property is fully constructed. This means you will usually need to cover a significant portion of the purchase price with your own funds. The initial deposit can range from 20% to 50% of the total price, depending on the developer and the specific project.
The remaining amount can only be financed after the property is delivered and officially registered. In most cases, Spanish banks will finance up to 70% of the official appraised value (which may differ from the purchase price). This means that a substantial personal contribution is always required, especially when your initial deposit already 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 certain 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 to live in.
As a result, the mortgage approval process is closely tied to the progress of construction and the administrative completion of the property.
If you're buying a home that’s still under construction, you’ll need to wait until the property is fully built and approved by the Spanish authorities before applying for a mortgage. This can delay financing, so it's important to plan ahead and ensure you have enough funds available to cover the period between signing the contract and final delivery of the property.
