Interest in real estate auctions in Spain is growing in parallel with the rise in mortgage foreclosures and the difficulties of accessing housing through traditional means. According to the National Institute of Statistics (INE), foreclosures on primary residences have increased sharply in recent quarters, with year-on-year increases of around 30% and 40%, although the data are still far from the maximums recorded during the previous crisis. This renewed interest is reminiscent of what occurred from 2014, when the real estate market began to awaken from its long slumber and house prices began to climb. According to Héctor Arderíus, with more than 30 years of experience in this sector, “from that year on, inquiries about real estate auctions skyrocketed.” Today, the phenomenon is repeated in a different context, but with the same trigger: rising prices and difficulty of access. Many individuals look to the world of auctions as the last way to access a home at a lower price. However, the reality is that this path is full of restrictions. For starters, there is no access to financing. “Although article 670 of the Civil Procedure Law allows you to request a mortgage once you have awarded the property at an auction, the reality is that the banks, without having it registered in your name, without having possession, do not grant it to you,” says Arderíus. “You have to pay flat and that is a tremendous handicap,” he laments. This limitation completely conditions the buyer’s profile. A barrier that explains why, despite growing interest, the market continues to be dominated by investors. Added to this is a widespread misperception among individuals, reasons Héctor Arderíus. “People arrive with the idea in their heads that they are going to buy at half price, but the reality is different: at auctions, you buy with 20% or 25% savings and only very occasionally does the flute sound,” he explains. The same range of discounts is also considered by auction expert lawyer Andreas Ruigómez, who figures in cities like Madrid, where the market “is very hot or with a lot of demand”, savings of around 20% on the market price. “In other towns with less demand, the discount can be much higher,” although he warns that it is very important to understand how the auction system works: “There are certain expenses that must be assumed, such as IBI debts on the property, unpaid community fees and also, depending on the auction, previous charges, such as a previous mortgage.” Lack of knowledge is an obstacle that stops the entry of the individual, “because auctions are a risky activity,” says Ruigómez. And it places emphasis, above all, on taking possession of the property, because many times these homes are inhabited by former debtors, tenants and even squatters. “It can be a problem depending on the circumstances, for example, in a foreclosure that is a primary residence and the foreclosed person is in a particularly vulnerable situation,” he says. Any person without knowledge who participates and wins an auction would find that in practice they cannot take possession of the home at least until May 2028, the date until which the Council of Ministers agreed to extend the suspension of mortgage evictions for debtors in vulnerable situations. The change in the legal framework is another obstacle for individuals. Last January, the regulations on judicial auctions changed, introduced by Organic Law 1/2025 and in force since April 3, 2025, which applies only to those auctions that have originated in judicial procedures initiated after that month. When the time comes, “which will take a while,” according to Arderíus, “because between two and six years can pass from the time a procedure begins until it becomes an auction,” the bids will be secret, preventing bidders from bidding in real time. In addition, the deposit to participate increases from 5% to 20% of the value of the property, which can discourage participation. Ruigómez highlights another relevant aspect of the regulatory change: “It has eliminated the possibility of deferred payment, which obviously makes it difficult for people who do not have all the capital to access the auctions.” Another key aspect is the quality of the product available. The best homes rarely come to auction. “Those who have high-value properties usually sell them sooner to pay off debts,” Arderíus reasons. In this sense, more houses of poorer quality arrive. Even so, and despite the obstacles in the way, this way of obtaining a home can offer interesting opportunities. This is what it was like for Clara Segura, a 36-year-old Spanish resident in the United States who, together with her husband, has purchased an apartment on the Costa Brava. «The auction value was 500,000 euros, when a similar one sold for 700,000. We bought it for 450,000,» he explains. “It wasn’t a great deal, but it is if you compare it to current prices,” he concludes. Distance is not a problem, since today the majority are closed online. The BOE auction portal is the site where the vast majority of procedures are held. Likewise, public auctions are also held on the Social Security website and other private auctions on the pages of financial entities.
Taxation
Regarding taxation, the acquisition of real estate by auction is affected by the reference value of the Cadastre. The tax base of the Property Transfer Tax (ITP), which taxes these acquisitions, will coincide with the reference value (unless it is acquired for a higher amount). “In these cases, the taxpayer must pay taxes according to said reference value, even if they have purchased at auction for a significantly lower value,” says José María Salcedo, managing partner of Tax Litigation & Legal Advising. “However,” he continues, “the taxpayer has the option to challenge the reference value and request that the amount unduly paid be returned.” It may also happen that the property acquired by auction does not have a reference value. In that case, «the taxpayer will be in luck,» according to Salcedo, since the ITP Regulations provide in its article 39 that «in transfers carried out by public, notarial, judicial or administrative auction, the acquisition value will serve as the basis, provided that it consists of a monetary price established by law or determined by authorities or officials suitable for it.» Therefore, in these cases the taxpayer may pay tax on the value awarded at auction.
