Buying in Spain? Don’t forget your KYC (and why it’s really to your advantage)
When you buy a property on the Costa del Sol, the first thing you probably think about is the view, the climate or the location of the property. But there is one step that is at least as important – and mandatory in Spain for every licensed real estate agent and promoter: completing a KYC form.
It may sound administrative, but it is actually one of the smartest and most protective steps in the entire buying process. Yet too often we still see this step forgotten or ignored.
What exactly is KYC?
KYC stands for Know Your Customer – an international principle that requires banks, notaries as well as brokers to know with whom they are doing business. In Spain, it is legally enshrined in Royal Decree 304/2014, one of the core pieces of anti-money laundering legislation(Ley de Prevención del Blanqueo de Capitales).
Specifically:
✔️ your identity must be officially verified
✔️ the origin of your funds must be clear
✔️ you must be able to prove that your purchase fits your profile as a buyer
This is not an unnecessary formality. It is a legal requirement, and more than that, it is there to protect your interests.
Why is this so important?
In an international market like the Costa del Sol – where 149 nationalities buy property – transparency is crucial. Not only for us as real estate agents, but also for banks, promoters, notaries and lawyers.
Without valid KYC documents:
a notary can refuse to complete the sale
can ‘t make reservations at some new construction projects
it is not possible to start a mortgage application
run the risk that your dream home will be sold to someone else in the meantime
And this is not hypothetical.
We already saw once how a client lost his dream penthouse because his bank documents were not in order on time. Everything was ready, but the promoter did not receive confirmation of the origin of funds – so the property was assigned to someone else and he lost his deposit.
What documents are requested?
We will help you with this step by step, but broadly speaking, these are the documents we need:
Identification
Valid passport or ID card
NIE number (Spanish tax number, if you already have one)
Origin of funds
Bank statement or recent bank statement
Proof of income (pay slips, self-employment financial statements, pension, etc.)
Any deed of sale of previous home or other property
- Utility bill showing name and address (water, electricity, gas, etc.)
Profile as a buyer
Reason for purchase (second residence, rental, investment)
Basic information about your financial situation (global only, no detailed figures)
Everything is of course kept completely confidential and used exclusively to comply with Spanish law.
But … not every broker does this
And here comes an important point that we cannot ignore:
By no means every real estate agent on the Costa del Sol conducts a KYC survey.
Some consider it “too much hassle.” Others consider it “aggressive” toward their client. And yes, there are even agencies that do not even inform their clients of the existence of this legal obligation. They only let the investigation start after the reservation is signed – with all the consequences that entails.
We have unfortunately experienced it several times.
A client who bought an apartment in Estepona paid his deposit personally, unaccompanied. But he eventually wanted the purchase to go through a new Spanish company that he had yet to set up.
The promoter – as required by law – started the investigation into the origin of funds…. and then the misery began: documents were not correct, no structure had been set up, the company did not yet legally exist, and the timing went completely haywire.
Consequence? Months of delay, stress and the risk of losing the reservation.
KYC: what about in Belgium, the Netherlands and the US?
KYC is not a typical Spanish phenomenon. In other countries, too, there are rules around identifying real estate buyers – although they are not everywhere as strict or clear.
Belgium
In Belgium, KYC is fully mandatory for real estate agents.
Those approved by the IPI (Beroepsinstituut van Vastgoedmakelaars) must:
verify the identity of the customer
requesting proof of funds
report suspicious transactions
As a result, Belgian buyers are often already familiar with this procedure.
The Netherlands
In the Netherlands, KYC is not mandatory for all brokers.
Only brokers subject to the Wwft (Money Laundering and Terrorist Financing (Prevention) Act must perform these checks.
In practice, this means that not every real estate agency systematically goes through a KYC process. In real estate transactions in Spain, this can lead to delays or ambiguity.
United States
In the United States, there is no uniform, federal requirement for real estate brokers to apply KYC.
However, so-called “Geographic Targeting Orders” (GTOs) do apply, whereby real estate transactions through partnerships in cities such as New York, Los Angeles and Miami are subject to additional identification requirements.
In practice, mainly banks, lawyers and escrow agents perform the checks – not always the broker himself.
Spain
In Spain, the laws are clear and strict.
Every licensed broker, promoter, notary and bank is required by law to conduct a KYC process
This obligation is laid down in Royal Decree 304/2014
KYC applies to every buyer regardless of nationality or purchase amount
At MDR Luxury Homes, we take this commitment seriously.
We are:
Registered broker through API (Asociación Profesional de Inmobiliarios)
Member of the LPA (Leading Property Agents of Spain).
A trusted point of contact for buyers who want to trade correctly and safely
Our approach: proactive, clear, and at your pace
At MDR Luxury Homes, we take complete charge of this process:
You get a clear overview of what is needed
We answer all your questions, in your language
We work with your lawyer or banker if required
And we make sure everything is in place well in advance
We want you to focus on what really matters: finding your ideal property on the Costa del Sol.
Frequently asked questions about KYC in real estate in Spain
As a European, do I also have to go through a KYC process?
Yes. The anti-money laundering legislation in Spain applies to all buyers, regardless of nationality.
Does this only apply to new construction projects?
No. KYC is mandatory for both new construction and resale. Approved brokers, promoters, banks and notaries carry out this process.
When should I submit my documents?
Preferably as early in the buying process as possible. That way you avoid stress, delays and possible obstacles.
What happens if I don’t get my KYC documents in order on time?
This can lead to a delay in the purchase or, in the worst case, the loss of the home to another buyer who acts more quickly.
Can I buy through a corporation?
Yes, this is possible. But this requires additional preparation and documentation. We will guide you step by step through this approach.
Isn’t it excessive or suspicious to do such a survey?
No. The KYC process protects you as a buyer and shows that you are acting according to the rules. It increases your credibility in the buying process.
What does MDR Luxury Homes do with my data?
Your data will be kept completely confidential and used exclusively to comply with legal obligations under Spanish anti-money laundering legislation.
don’t let it deter you – let it prepare you
KYC may sound like paperwork, but it is an essential step in protecting your investment. A well-prepared file makes all the difference – especially in a market where speed and trust are all-important.
Want to know what you need for your KYC file?
Schedule a no-obligation meeting with Luc via this link – then we’ll explain everything at your leisure.
Disclaimer
This blog post is informational only and does not replace legal advice. For specific guidance, we recommend working with a licensed lawyer or tax specialist in Spain. MDR Luxury Homes can put you in touch with trusted professionals within our network if required.
