Madrid — mortgages for non-residents
Not a holiday market but a city market. People who buy here buy to let, for their own professional presence or as an investment — and they meet the lowest property transfer tax of Spain's large regions.
Can a non-resident get a mortgage for an apartment in Madrid?
Yes. Madrid is a city market rather than a holiday market, and from a lender's point of view that helps: a property usable all year in a liquid market is easier security than a remote holiday home. The usual limit is around 70 % of the lower of purchase price and appraisal. What decides a case is not the location but whether an institution underwrites the specific combination of income type, country of residence and property. Self-employed applicants are regularly asked for two to three years of records. On tax, Madrid is the cheapest of the large regions: 6 % transfer tax on resale property, 0.75 % stamp duty on new build. Purchase costs and refurbishment are not financed by the bank — they are equity and belong in the calculation before the offer. Not legal or tax advice.
Three financings a branch office cannot do
Spanish banks pay out new builds only on completion, they finance purchases rather than capital release, and they cannot value a German property. Of the 15 to 20 institutions we approach per case, one underwrites the builder instalments during construction and two lend against unencumbered existing property (Perini market check).
Madrid is the exception among our regions
Salamanca, Chamberí, Retiro, Centro
The sought-after central districts. The stock is largely period blocks; state of refurbishment and the presence of a lift both feed into the bank's valuation.
Chamartín and the Castellana axis
Office and residential locations along the north-south axis, well connected to the airport and the main stations. The typical setting for a professionally motivated second home.
The north-western commuter belt
Pozuelo, Majadahonda, Las Rozas and Boadilla — family housing with international schools. This is the part of the market that concerns families.
Unlike the coast, Madrid has no seasonal holiday market. For financing that helps: the bank sees a property usable all year in a liquid market. The hurdle is not the property but the buyer's non-resident status.
Madrid is the cheapest of the large regions
- ITP 6 % on resale property — art. 28 of Decreto Legislativo 1/2010 of the Comunidad de Madrid, cut from 7 % to 6 % by Ley 5/2024. The taxable base is the higher of purchase price and cadastral reference value.
- AJD 0.75 % on new build from a developer, on top of 10 % VAT. That too is among the lowest rates in Spain.
- The 10 % rebate on the tax due does not apply here. It requires a main residence and a value of up to €250,000 — neither fits the typical non-resident purchase.
Tax rates change. These figures are as of July 2026 and are not tax advice.
An apartment as a second home, €1.68m
A self-employed architect and his wife, resident in Germany at the time of purchase, are looking for a generous apartment for professional stays. Before moving in, the kitchen, lighting, air conditioning and a work area are to be renewed.
The hurdle: not the property. An apartment in Chamartín is straightforward security from a lender's point of view. The difficulty was self-employment — Spanish banks regularly ask self-employed non-residents for two to three years of records and calculate more conservatively than for employees. Cases like this are decided by the choice of institution, not by credit standing.
| Item | Amount |
|---|---|
| Purchase price | €1,680,000 |
| Purchase costs, around 8.5 % (of which ITP 6 % = €100,800) | €143,000 |
| Refurbishment | €95,000 |
| Total investment | €1,918,000 |
| Loan, 65 % of the purchase price | €1,092,000 |
| Equity | €826,000 |
| Monthly instalment at 2.8 % | €5,947.46 |
| Without the discount, at 3.8 % | €6,502.79 — around €6,664 more per year |
One point that is easily missed: the Spanish bank does not finance purchase costs or refurbishment — it lends against the lower of price and appraisal. That does not mean they have to be paid in cash: anyone holding unencumbered property in Germany can cover exactly these items through a German top-up loan. What matters is that both are costed before the offer — a follow-up financing is the step that most often fails for non-residents.
Model calculation, not a case report. French amortisation, fully amortising, no residual debt. Figures rounded, purchase-cost ratio given as a range. Representative example under § 17 PAngV: €200,000 loan, 65 % loan-to-value, 20 years, borrowing rate 2.8 % fixed, APR 2.86 %, instalment €1,089.28, total amount €261,426 (valuation €400, no arrangement fee, no tied products). Conditions as of 20.07.2026, not an offer.
Using a property in Madrid as a source of capital
Madrid is an autonomous community in its own right; its rules apply to any property located here, wherever the owner lives. Anyone who already owns a paid-off property here does not have to sell it to free up capital — it can be mortgaged instead.
- Lending limit. For non-residents, banks regularly lend up to around 50 % of the appraised value (tasación). The property must be unencumbered.
- Age is not the obstacle it is assumed to be. Where the owner’s age would shorten the term, a younger co-borrower — usually the child — can carry it. Co-signing is enough; no income of their own needs to be recognised.
- The funds are tied to Spain, not to a purpose. The money must be invested in Spain and may not leave the country; the bank checks this. Buying, renovating or building are all possible. Who buys is not the point.
- Inheritance tax, Comunidad de Madrid: 99% relief, since 2007 — groups I and II, meaning parents, children and spouses (art. 25.2 Decreto Legislativo 1/2010 (Madrid)).
For inheritance, the rules of the autonomous community holding the highest value of the Spanish estate apply. With a single Spanish property that is simply its region. The relief must be claimed within the filing deadline — miss it and it becomes contentious.
A gift of the released money to a child is a German transaction, taxed in Germany rather than Spain. How the two sides interact — and why the German allowance rather than the Spanish rate is usually the real constraint — is set out under inheritance and gift tax in Spain. This is not tax advice; Inheritance tax, groups I and II (parents, children, spouses). Autonomous tax law changes; review quarterly.
Frequently asked questions about Madrid
Can I get a mortgage in Madrid as a non-resident?
Why is Madrid cheaper than the coastal regions?
Is a city apartment worse security than a holiday home?
Can I release capital from a Madrid property I already own outright?
How long does financing take?
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