From the UK to Spain: what to consider when buying a second home

Mr and Mrs Smith (both in their forties) and their two daughters, recently fell in love with southern Spain during a summer visit. Captivated by the lifestyle, climate, and culture, they began exploring the possibility of purchasing a holiday home in Marbella. With a budget of £1.2 million, they were particularly drawn to a villa that offered both comfort and long-term investment potential.

However, the Smiths quickly realised that buying property in Spain involves far more than choosing the right location. Questions about taxation, inheritance, legal ownership, and cross-border estate planning arose. They turned to the Spanish law team at Russell-Cooke for guidance, seeking practical advice on how to navigate these complexities while complying with both Spanish and UK laws.

Below are some of the questions clients like the Smiths often raise, and how we support them along the way.

Do we need a Spanish identification number to buy property? 

Yes. Foreign buyers must obtain a Número de Identificación de Extranjero (NIE), Spain’s foreigner identification number, to complete any transaction with tax implications. If you haven’t yet received your NIE, a temporary NIF issued by the Spanish tax authorities can allow the purchase to proceed while your permanent number is being processed. We can assist you with arranging this.  

What is the role of the Spanish notary in a property purchase? 

In Spain, property transactions must be formalised before a Spanish Notary Public. The notary is an independent public official who ensures that the transaction complies with Spanish law, verifies the identity and capacity of the parties, and confirms that the purchase deed (escritura pública de compraventa) reflects the agreed terms. Once signed, the deed can be registered with the Spanish Land Registry, which provides legal protection of ownership.

Notarial fees are set by law and are generally calculated by reference to the purchase price. In addition, buyers should budget for Land Registry fees and related administrative costs.

As part of our service, we coordinate closely with trusted notaries experienced in working with international clients and their specific requirements. 

How do mortgages work for non-residents? 

Spanish banks, savings banks, credit cooperatives, and authorised financial institutions can offer mortgages to non-residents, subject to meeting their solvency and documentation requirements. Branches of EU banks may also provide for property purchases in Spain.

What taxes do we need to pay?

When purchasing a property in Spain, you will typically pay one of the following:

• Property Transfer Tax (ITP) for resale properties.
• Value Added Tax (VAT), usually for new builds.

Non-resident buyers must also appoint a Spanish tax representative within two months of completion to comply with local tax obligations. We can assist by connecting you with trusted professionals in Spain who can act in this role.

How does ownership work if we’re married?

Spanish property law requires careful consideration of matrimonial property regimes. Whether a couple is subject to a community property system or a separation of property regime, ownership should be recorded accurately in the purchase deed and Land Registry so it reflects their legal position. This helps prevent future disputes and ensures clarity in relation to tax obligations. Our team works closely with the Spanish notary and Land Registry to ensure all details are properly documented, helping to avoid complications that can arise from differences between the UK and Spanish legal systems. 

Will we be liable for Spanish Wealth Tax? 

Possibly, depending on the value of your property and any other assets you hold in Spain. Our team can help structure ownership efficiently while ensuring full compliance with wealth tax requirements, and can provide calculations before the purchase so you can make an informed decision. 

How does owning a Spanish property affect UK taxes?

Rental income from a Spanish property may be taxable in both Spain and the UK. Even if the property is not rented out, Spain may assess a notional income, which can still be subject to tax. On a future sale, capital gains tax may arise in both jurisdictions. From a UK inheritance tax perspective, long-term UK residents should also consider how the value of the property affects their estate, as worldwide assets - including Spanish real estate - are generally taken into account when assessing potential liability.

Do we need a Spanish Will? 

It depends on the circumstances, but it is an important point to consider. Spanish law includes forced heirship rules that reserve certain portions of an estate to children. To avoid unintended outcomes, some clients choose to have both UK and Spanish Wills in place. We advise on EU Succession Regulation, which can allow English law to govern your estate while still recognising Spanish property requirements.

What about long-term estate planning?

Recent changes to UK inheritance tax rules mean long-term UK residents should review their worldwide estate, including any Spanish assets. We coordinate cross-border succession planning between the UK and Spain and assist with administering estates that include Spanish property, helping to protect family interests and support tax-efficient outcomes.

Acquiring a second home in Spain is not just a lifestyle decision; it also brings with it important legal and tax considerations across jurisdictions. With the right advice, these complexities can be managed smoothly and efficiently.

At Russell-Cooke, our dedicated Spanish law specialists guide families like the Smiths through every stage of the process - from structuring ownership and advising on Spanish and UK tax implications, to ensuring succession planning is properly aligned in both countries. With clear, practical advice tailored to your circumstances, we help you move forward with confidence, knowing your family’s future is in safe hands.