Spain remains the top overseas destination for UK buyers, and the purchase process is quick once it starts, which makes the currency side easy to underestimate. You agree a price in euros and pay it over a matter of weeks, while your money sits in pounds, so the exchange rate decides how much the property really costs you in sterling. The way to keep control is to plan the currency early, budget for the full euro cost including regional taxes, and fix your rate with Medlock & Thames rather than converting at your bank on completion day. This guide covers the currency side; for the full framework, see our guide to buying property abroad.
How does the Spanish buying process affect your currency planning?
The Spanish timetable moves faster than most. A reservation fee first takes the property off the market, usually for around thirty days. Within days you sign the private contract, the contrato de arras, which typically requires a deposit of ten to twenty per cent and commits both sides. Completion then follows when you sign the title deed, the escritura, before a notary, often within six to eight weeks of your offer being accepted. The balance and the purchase taxes fall due at that point. Even six to eight weeks is enough time for the euro to move against you on a six-figure sum, so the period between the arras and the escritura is the one your currency plan needs to cover.
How much can the euro move before you complete?
Quite enough to matter. In May 2026 the pound traded at around 1.158 against the euro, according to European Central Bank reference rates, and the rate can travel several cents in a few weeks on interest rate and political news. On a €450,000 home, the difference between roughly £388,600 at 1.158 and about £409,100 if the pound slipped to 1.10 is more than £20,000, for a property whose euro price never changed. You are not trying to predict the market; you are removing that uncertainty from a purchase you have already committed to. A forward contract, which fixes today's rate for a future settlement date, lets you sign the arras knowing the sterling cost. For the mechanics, see how a forward contract works.
What will a Spanish purchase cost beyond the price?
Spain adds significant costs on top of the agreed price, and they vary by region because the main tax is set locally. On a resale property you pay transfer tax, the Impuesto sobre Transmisiones Patrimoniales or ITP, which ranges from around six to eleven per cent depending on the autonomous community: Madrid is among the lowest at six per cent, Andalusia is seven per cent, and Valencia and Catalonia reach ten per cent. On a new build you pay VAT, IVA, at ten per cent instead, plus stamp duty, AJD, of roughly half a per cent to one and a half per cent. Add notary, registry and legal fees, and total purchase costs typically come to around nine to twelve per cent of the price. Because every one of these is a euro cost, a weaker pound raises them too, so it is sensible to fix your rate across the whole budget.
Which currency tool should you use?
For a six-figure completion you have three practical choices. A spot transfer converts at the rate on the day, which leaves the payment exposed to wherever the market sits. A forward contract fixes today's rate for the future date, so you can sign the arras knowing the sterling cost, and for most buyers it is the right tool for the deposit and the balance. A regular payment plan suits ongoing euro costs, such as community fees or local taxes, once you own the property. Many buyers fix the purchase with a forward and run the ongoing costs through a regular plan.
When should you fix your euro rate?
As soon as you are committed, which in Spain usually means at the contrato de arras when the deposit falls due. In our experience, the buyers who lose most to the exchange rate are those who wait until the escritura is scheduled and then convert a large sum in a hurry, often through a bank, under time pressure. Fixing the rate at the arras stage means the figure you budgeted is the figure you pay. If you are still searching, open an account with a currency specialist in advance so you can act quickly when your offer is accepted.
How do you move the money to Spain safely?
The deposit is often held by your lawyer or agent in a client account, and the balance is paid at the notary, so funds need to arrive on time and in full. A currency specialist can deliver euros to the right account on the date required, which avoids the delays and weak rates of sending a large sum through a high street bank at short notice. For a transfer of this size, speak to Medlock & Thames before you send anything.
Frequently asked questions
Do UK buyers pay more tax than Spanish buyers?
No. There is no extra transfer tax for foreign buyers in Spain; you pay the same ITP or VAT as a Spanish buyer. You may face some additional professional costs, such as translations and a non-resident tax number, but not a higher purchase tax.
When is the deposit due in Spain?
At the contrato de arras, usually ten to twenty per cent of the price, shortly after the reservation. That is typically the right moment to fix your rate for the balance due at the escritura.
Will I be taxed on a currency gain?
Possibly, depending on your circumstances, as currency can interact with UK and Spanish tax rules. Take advice from a qualified tax adviser; this guide covers the currency and transfer side only.
Do I need an NIE to buy in Spain?
Yes. You need a Spanish foreigner's identification number, the NIE, to complete a purchase, and usually a Spanish bank account for ongoing costs. The purchase funds themselves go to your lawyer or the notary, and a currency specialist can deliver euros to either on the date required.
Related articles
This guide is part of our overseas property series. For the full framework, read Buying Property Abroad: A Currency Guide for UK Buyers. See also our guides to how a forward contract works, what it costs to transfer money abroad, and our country guides for France, Portugal, Greece and Hungary.
