A newly built Spanish home

New-build home financing in Spain

In addition to existing properties, you can also choose to invest in a new-build home. Financing for this purchase works very differently. If you want to buy a new-build apartment in the Netherlands, the builder is paid by the bank from an escrow account. This is not the case in Spain!

The reason is that experience in Spain shows that many contractors have gone bankrupt or that properties are not correctly registered in the Spanish land registry. Therefore, it works differently in Spain; here, properties are only financed once they are equipped with the proper permits, such as a Cedula (occupancy permit).



The mortgage is granted once the property has been completed with the correct permits and is properly registered in the Spanish land registry. Therefore, you pay the first 30-50% of the purchase price to the contractor from your own funds. As soon as the property can be completed, the mortgage is granted and you pay the remaining 50-70% (this is paid from the mortgage, as the mortgage can be granted at this point).

Having a Spanish home built

A different situation arises when you have the ambition to supervise the construction yourself. In this situation, the land is always paid for from your own funds first; you will not receive upfront financing from the bank for this. You engage a recognized construction company with a demonstrably successful track record. Always discuss your choice of contractor with the bank.

This contractor will need to prepare complete construction drawings and a quotation to submit to the bank.

Ensure that the building permits are also in order so that you do not face unpleasant surprises regarding financing during the construction process. You can borrow approximately 60% of the cost of the land plus the construction costs. Again, thorough preparation for this financing is of great importance. We therefore advise you to speak with one of our advisors in this field.

Renovating a Spanish home

The Spanish property you have your eye on is not built exactly the way you would like it. You would like to add a terrace or, for example, install a swimming pool. Therefore, you would like to know if any potential renovations can be co-financed. Please note: this is not the normal course of events!

Financing for a renovation is possible if it meets the following two criteria: the renovation must be carried out by a recognized construction company and the renovation costs must be reflected in the appraisal value.

If, for example, €30,000 is spent on renovations, this must be reflected in an increase in the appraisal value. The appropriate permits must also be submitted, such as a Cedula (residential permit), Licensia Obra Nueva (building permits), and official quotations from recognized contractors.

Curious about your possibilities?

Always contact us to discuss your specific application. It is of great importance that you are well prepared for the financing of a new-build home. For example, have an advisor check or pre-scan carried out in advance to see if you qualify for financing.

Please note that a mortgage is also based on the collateral. In the situations described above, the mortgage is always granted only once the proper (residential) permits are in place. The mortgage can be granted as soon as everything regarding the property is legally in order.