Buying property in Madrid: a guide for foreign buyers

Buying property in Madrid: what is different from the rest of Spain

The legal steps are the same as anywhere in Spain: NIE, bank account, your own lawyer, legal checks, arras contract, notary, tax, registration. Our step-by-step guide to buying property in Spain covers each one. Three things make Madrid different:

• Lower purchase tax. The Comunidad de Madrid sets ITP at 6%, against 7% in Andalucía, 9% in the Valencian Community and 10% in Catalonia.
• A city built on flats. Most buyers purchase an apartment in a community of owners, so the community's accounts, debts and rules matter as much as the flat itself.
• Tight rules on tourist lets. If your plan depends on short-term rental income, the building and the zone decide whether it is possible, not the flat.

If you are still choosing a region, our comparison of the best places to buy property in Spain sets Madrid against the coast and the islands.

Purchase taxes in Madrid

Resale homes: ITP at 6%

On a resale, you pay Impuesto sobre Transmisiones Patrimoniales (ITP) to the Comunidad de Madrid. It is charged on the price in the deed or the Catastro's tax reference value (valor de referencia), whichever is higher. You file it on Modelo 600 within 30 working days of signing.

The main-home reductions only apply if you will live in the property as your habitual residence, so a non-resident buying a second home pays the full 6%. There is also a 100% relief for buyers under 35 purchasing a main home of up to €250,000 in municipalities with fewer than 2,500 inhabitants, which does not apply in Madrid city itself.

New builds: IVA plus AJD

Buying from a developer, you pay 10% IVA to the developer and AJD stamp duty to the region. Madrid's AJD rates for an individual buyer are:

Garage spaces and storerooms sold with the home count towards the value. On a €400,000 new-build flat, that means €40,000 IVA plus €3,000 AJD. Add notary, Land Registry and lawyer fees; our cost of buying property in Spain guide gives typical ranges.

Annual taxes once you own

You will pay IBI to the city council each year and, if you live abroad, non-resident income tax on the property whether or not you let it. The Comunidad de Madrid applies a 100% relief on regional wealth tax, but the state's temporary solidarity tax on large fortunes can still apply to very large estates; see our wealth tax guide.

Buying a flat in Madrid to let to tourists: Plan Reside

This is the rule that catches out investors. Madrid City Council's Plan Reside, approved in 2025, changed where tourist flats (viviendas de uso turístico) can operate:

• Inside the historic centre perimeter: tourist flats scattered through residential buildings are not permitted. Tourist use is only possible in whole buildings dedicated to it, and those conversions get time-limited licences.
• Outside the centre: a tourist flat in a residential building generally needs its own independent access and must be on the ground or first floor.
• Protected shopping streets: conversion of shops to tourist or residential use is restricted on designated commercial streets.

On top of the city's planning licence, the Comunidad de Madrid requires a declaración responsable and a certificate of suitability (CIVUT) and entry in its register of tourism businesses under Decree 79/2014. Since 1 July 2025 you also need a national short-term rental registration number from the Land Registry under Royal Decree 1312/2024 before advertising on platforms. And since April 2025 a community of owners can vote to refuse new tourist lets in the building.

Medium-term lets (temporada) and ordinary long-term tenancies are the realistic options for most flats. Long-term tenancies are governed by the national tenancy law, which gives tenants strong rights.

Madrid property prices: what the official data says

Asking prices on portals are not a reliable guide. Two official sources track prices actually paid:

• INE housing price index: prices in the Madrid region rose 12.9% in the year to Q2 2026, against 12.2% for Spain as a whole. Growth has been above 12% for every quarter shown in the chart.
• Registradores' Estadística Registral Inmobiliaria: the average registered price in the Madrid region was €4,477/m² in Q2 2026, the highest of any region, against a national average of €2,487/m². For Madrid city, the 12-month average was €5,534/m², second only to San Sebastián among provincial capitals.

Foreign buyers are a smaller part of the Madrid market than on the coast: 8.12% of registered home purchases in the region in Q2 2026, against 32.27% in the Balearics and 15.95% in Andalucía. That means you compete mostly with local buyers, and properties are priced for them.

How to buy property in Madrid as a foreigner: checks that matter here

Alongside the standard checks, pay attention to:

• Community of owners: ask for the certificate of debts, the last minutes and any approved special levy (derrama). Older Madrid blocks often face lift installations, façade work or building inspection (ITE) repairs.
• Nota simple and Catastro: confirm the owner, charges and that the registered area matches the Catastro. Start with a nota simple and the referencia catastral.
• Converted premises: a ground-floor shop turned into a home (a "local" reconverted to vivienda) needs a change-of-use licence. Without it, you may be buying commercial premises.
• Occupancy: make sure the flat will be delivered empty. See our guide to okupas.

You can start with our free property check: enter the address or referencia catastral and we'll get back to you by email.

Registry and notary practice in Madrid

Nothing here differs from the rest of Spain. You sign the escritura before a notary of your choice, and the deed is registered at the Land Registry office covering the property; Madrid city is split among dozens of numbered registries. If the seller is not tax resident, you withhold 3% of the price for the Tax Agency.