For Irish buyers, Spain has long represented something more than just a sunny escape. What was once primarily viewed as a holiday home purchase has evolved into a broader lifestyle choice and financial strategy. Some buyers aim for a family base they can use year-round. Others are preparing for retirement, seeking more options for where to spend their time, or investing in a familiar and trusted market.
The Costa del Sol continues to be particularly attractive thanks to its accessibility from Ireland, established international communities, excellent infrastructure and year-round appeal. Whether you are considering a contemporary apartment in Marbella, a golf-front property in Benahavís or a new development close to the coast, one of the first practical questions is usually the same: how do you finance it?
The good news is that obtaining a mortgage in Spain as an Irish buyer is generally straightforward. Spanish banks are highly accustomed to lending to international purchasers and there are numerous lenders actively competing for overseas clients. However, the process differs in several important ways from obtaining a mortgage in Ireland, so understanding these differences from the outset can save considerable time, money and stress.
How much can you borrow in Spain?
One of the biggest surprises for many Irish buyers is the level of deposit required.
As a non-resident purchaser, you should generally expect Spanish lenders to finance between 60 and 70 per cent of the property’s value. Importantly, this is based on the lower of either the agreed purchase price or the bank’s valuation.
For example, if you agree to purchase a property for €500,000, a bank may lend between €300,000 and €350,000, leaving you to contribute the remaining balance yourself.
The exact amount available will depend on several factors, including your income, age, employment status, existing financial commitments, assets and overall financial profile. Buyers with strong earnings, substantial assets and low levels of debt will typically secure more favourable terms.
This means that before you even begin your property search, it is sensible to establish a realistic budget based on both the purchase price and the funds you will need to contribute personally.
Understanding the true cost of buying
Many first-time buyers focus exclusively on the purchase price and deposit, but these are only part of the financial picture.
In addition to the property price itself, buyers should budget for various acquisition costs including:
- Property transfer taxes or VAT
- Notary fees
- Land Registry fees
- Legal fees
- Mortgage arrangement costs where applicable
- Property valuation fees
As a general rule, buyers should allow approximately 10-13% of the purchase price to cover these additional costs.
The exact amount will depend on the type of property being purchased.
For resale properties in Andalucía, buyers pay Impuesto sobre Transmisiones Patrimoniales (ITP), commonly known as transfer tax.
For new-build properties purchased directly from a developer, buyers generally pay IVA (VAT), currently 10% for residential property, together with AJD, a form of stamp duty.
Understanding these costs from the beginning helps avoid the unpleasant surprise of finding that the available budget falls short when completion approaches.
Getting mortgage-ready before you start searching
Be prepared. Preparation is one of the most effective ways to strengthen your position as a buyer.
Spanish lenders carry out extensive due diligence and will require a range of documentation before issuing formal approval.
Typically, banks will request:
- Passport and identification documents
- Proof of income
- Recent tax returns
- Bank statements
- Details of existing loans or mortgages
- Evidence of savings and assets
- Documentation showing the source of funds
For salaried employees the process is often relatively straightforward. Self-employed buyers, business owners or individuals with more complex income structures may need to provide additional supporting information.
Mortgage approvals can take longer than many buyers expect, particularly when documents need translating or financial circumstances are more complex. Having paperwork organised before beginning your search can significantly improve both speed and negotiating power.
Why timing matters
In competitive areas such as Marbella, desirable properties can attract considerable interest.
Buyers who have already spoken to a mortgage broker or lender and have a clear understanding of their borrowing capacity are often in a much stronger position when it comes to making an offer.
Sellers and agents are naturally more comfortable dealing with buyers who have already established their financial position and can demonstrate they are capable of completing the transaction.
If your purchase depends on mortgage approval, this should always be made clear at the offer stage.
Currency considerations for Irish buyers
Irish purchasers benefit from one significant advantage over many international buyers: Ireland and Spain both operate within the eurozone.
This removes the exchange rate risk faced by buyers in countries such as the United Kingdom, where fluctuations between sterling and the euro can significantly affect purchasing power.
However, currency planning should not be ignored entirely.
Many buyers hold investments, pensions or savings in multiple currencies. Others may be selling assets abroad to fund their purchase. Even relatively small currency movements can make a noticeable difference when large sums are being transferred internationally.
Planning these transfers carefully can help maximise available funds and reduce unnecessary costs.
Don’t overlook tax planning
Tax considerations should form part of the conversation before contracts are signed, not afterwards.
Irish buyers purchasing property in Spain may have reporting obligations both in Ireland and Spain, particularly where rental income is involved.
If the property is intended as an investment and generates rental income, that income may need to be declared in both jurisdictions, subject to the relevant double taxation agreements and individual circumstances.
Spain also imposes certain annual tax obligations on non-resident property owners. Even when a property is used solely for personal enjoyment and is not rented out, there may still be filing requirements based on its cadastral value.
Because every buyer’s circumstances are different, professional tax advice is highly recommended before proceeding.
Why professional advice pays for itself
Property purchases in Spain involve legal, financial and tax considerations that differ from those in Ireland.
An experienced mortgage broker can compare lenders and identify the most suitable products for your circumstances. A qualified independent lawyer can verify the legal status of the property, check planning permissions and ensure there are no unexpected liabilities attached to the purchase.
For buyers intending to rent their property, hold it through a company structure or use it as part of a broader investment strategy, specialist tax advice can be equally valuable.
The cost of good professional guidance is often small compared to the potential consequences of getting something wrong.
A considered approach delivers the best results
Financing a property in Spain is not especially complicated, but it does reward preparation.
Buyers who understand their borrowing capacity, budget realistically for purchase costs and seek professional advice early tend to enjoy a smoother purchasing process and greater confidence when opportunities arise.
For Irish buyers, the Costa del Sol remains an attractive choice due to its lifestyle, accessibility, and long-term value. The key is to handle the financial aspects of the purchase with as much care and attention as you do when selecting the right property.
Considering a property purchase in Spain?
At Kore Estates, we understand the questions, priorities and concerns that Irish buyers typically face when purchasing on the Costa del Sol because we’ve been through the journey ourselves. From helping you understand financing options and purchase costs to identifying the right location and introducing trusted legal and financial professionals, our team is here to guide you through every stage of the process.
If you’re considering a property purchase in Marbella, Benahavís, Estepona or the surrounding areas, contact Kore Estates today and take the next step with confidence.