Guides · · 14 min read
Selling Your Home and Buying Another at the Same Time in Madrid (2026): What to Do First, Bridging Loans and Tax
Selling your home and buying another at the same time is a delicate operation: sell first and you may have nowhere to live; buy first and you may be paying for two homes. We explain how to line up the deposit contracts (arras) and the deeds, which clauses protect you, what a bridging loan costs, how the main-home reinvestment relief works in Spanish income tax, plus a week-by-week timeline and a worked example with Madrid figures.
Selling your home and buying another at the same time is probably the most nerve-racking property transaction there is. Sell first, and you may have to move out before your next home is ready. Buy first, and you may end up paying for two homes for months. In between there are two arras contracts (the Spanish deposit agreement that reserves a property), two deeds, one or two banks and a two-year tax deadline.
In this guide we look at which order suits each situation, how to chain the two transactions, which special clauses you can agree in the arras, what financing exists (bridging loan, change of collateral or two mortgages), how the main-home reinvestment relief works and what each transaction costs. At the end there is a week-by-week timeline and a worked example with Madrid figures.
Sell first or buy first: pros and risks of each order
There is no single answer. It depends on how much of the sale money you need to buy, how much leeway you have if the dates don't match and how quickly the market moves in your area.
| Order | Pros | Risks | Suits you if… |
|---|---|---|---|
| Sell first | You know exactly how much money you have and borrow only what you need | You may have to move out before the new home is ready: short-term rental and two moves | You need the sale money or your budget is tight |
| Buy first | You choose calmly and move only once | You pay for two homes or a bridging loan until you sell; time pressure may force a price cut | You have savings or a comfortable income and your home is easy to sell |
| Both together (chained) | One move; the sale money pays for the purchase | If one transaction is delayed or falls through, it drags the other down | You can agree flexible dates with your buyer and your seller |
Our own summary.
In Madrid, time on the market matters most. According to idealista, in the second quarter of 2026 only 7% of homes sold through its portal had been advertised for less than a week, and 47% needed more than three months. In the city of Madrid, sales within a week fell to 11%, from 14% a year earlier. The average price in the city was €6,458 per square metre in September 2026, 2.4% higher than a year before but 1.8% lower than in June. If you buy before selling, allow for the sale taking months.
How to chain the sale and the purchase
Chaining means signing the sale and the purchase on the same day, or a few days apart, so that the money from one pays for the other. The dates need to be written into the contracts from the start:
- Before advertising your home, run the numbers: a realistic price, the outstanding balance on your mortgage (ask your bank for a certificate) and how much you could borrow for the new one.
- Search while you sell, but don't sign the arras for your purchase until you have a serious buyer, unless you can afford to buy first.
- In the arras for your sale, ask for a window of dates for the deed (for example, “between day X and day Y, with fifteen days' notice”) and, if you need it, time to move out after signing.
- In the arras for your purchase, set the deed within that same window, leaving room for the valuation, the FEIN and your visit to the notary about the mortgage.
- Ask for both deeds to be signed on the same day: the sale first, which pays off your mortgage, and the purchase afterwards.
The key is leeway. If both dates are fixed to the same day with no flexibility, any delay from your buyer's bank, your valuation or a document can throw everything out. A window of two or three weeks in each contract usually absorbs the unexpected.
Special clauses in the arras to make one transaction depend on the other
The arras are the deposit the buyer pays to reserve the property, and the contract that sets the price, deadlines and conditions until the deed. If they are arras penitenciales, article 1454 of the Civil Code lets the buyer withdraw by forfeiting the deposit and the seller withdraw by paying back double. When you chain two transactions, these clauses are your safety net:
- Prior-sale condition (arras for your purchase): if you haven't sold your home by a set date, you get your deposit back. The seller doesn't have to accept it and may ask for a short deadline in return.
- Financing condition (arras for your purchase): if the bank doesn't grant the mortgage for the agreed amount, you get your deposit back. It should state the amount, the deadline and how the refusal is proved.
- Window of dates for the deed (in both): a period instead of a fixed day, with prior notice.
- Deferred handover (arras for your sale): you stay in your home for a few days or weeks after signing, with a key-handover date, a penalty for each day of delay and, if agreed, part of the price held back until handover.
- Agreed extension: what happens if a signing is delayed for reasons outside the parties' control, such as the bank, so that nobody loses the deposit over a few days.
When the sale is made by public deed, executing the deed shall be equivalent to delivering the thing sold…
Spanish Civil Code, article 1462
That is why a deferred handover must be in writing: unless the deed says otherwise, the buyer takes possession on signing. Agree the handover date in the arras and have it included in the deed. We cover this in more detail in our guide to the arras contract in 2026.
If there is still a gap between one home and the next, the usual answer is a short-term rental. According to the OCU (Spain's consumer organisation), since 8 October 2026 a seasonal let (alquiler de temporada) requires a genuine, provable temporary reason stated in the contract, lasting more than 31 days and, as a rule, no more than twelve months; otherwise it is treated as a standard residential tenancy. These rules come from Royal Decree-law 29/2026, which the Standing Committee of the Spanish Congress still has to ratify (the vote is expected on 12 November); if it does not, they would stop applying. If you rent by the month while waiting for your new home, say so in the contract and have a professional check it.
Financing: bridging loan, change of collateral or two mortgages
A bridging loan (hipoteca puente) lets you buy the new home before selling the current one. The bank finances the purchase and, if you still have a mortgage, folds it into the same loan; during a grace period you pay interest only. When you sell, you use that money to pay off a large part of the debt and are left with an ordinary mortgage on the new home.
Not every bank offers one, so ask around and compare. As a cost reference, Banco Santander's “Hipoteca Cambia de casa” had, according to HelpMyCash (2 October 2026), a rate of Euribor plus 0.84 points with discounts (plus 1.84 without them) after six initial months at 1.84%, an APR of 4.42% with discounts and 4.92% without, a capital grace period of up to 12 months and financing of up to 100% of the price. With the September 2026 Euribor of 3.247%, according to the Banco de España, the discounted rate would be around 4.09%. The average rate on new home mortgages was 3.01% in July 2026, according to the INE (Spain's National Statistics Institute).
| Option | How it works | For | Against |
|---|---|---|---|
| Bridging loan | One loan that finances the purchase and absorbs your mortgage; grace period while you sell | You buy without waiting to sell; a single repayment | Interest on a large debt; if you don't sell in time, repayments rise and both homes are security |
| Change of collateral | The bank moves your current mortgage onto the new home by amending the loan | You keep your terms if they are good | Depends on the bank agreeing; valuation plus notary and land registry costs; if you need more money, the loan must be increased |
| Two mortgages | You keep your mortgage and take out another for the new home; you repay the first when you sell | You can compare banks for the new loan | Two repayments until you sell; the bank must see you can afford both; possible early repayment fee |
| Sell first, ordinary mortgage | The sale money reduces the loan for the purchase | Smaller loan and no bridging cost | Requires chaining the dates or accepting a short-term rental |
Sources: HelpMyCash (2-10-2026); Banco de España, guide “Qué tengo que saber si voy a pedir una hipoteca” (What I need to know if I'm applying for a mortgage). Final terms depend on each bank's offer.
Whatever the option, the key document is the FEIN (Ficha Europea de Información Normalizada, the European Standardised Information Sheet): the bank's personalised offer with all the loan terms. Law 5/2019 requires it to be given to you, together with the Standardised Warnings Sheet (FiAE), at least ten calendar days before signing, and the Banco de España describes it as a binding offer. You must also visit a notary of your choice, who explains the loan, no later than the day before the deed. If the FEIN arrives late, the purchase cannot be signed on the planned day, and the sale moves with it.
Income tax: the main-home reinvestment relief
If you sell your home for more than it cost you, the gain is taxed under IRPF (Spanish personal income tax) in the savings income bracket, at rates from 19% to 30% depending on the amount. However, article 38 of Law 35/2006 on IRPF exempts it if the amount obtained is reinvested in a new main home (vivienda habitual), under the conditions in article 41 of its Regulation.
The reinvestment of the amount obtained […] must be made, in one go or in stages, within a period not exceeding two years…
Personal Income Tax Regulation (Royal Decree 439/2007), article 41.3
- Two years before or after: the same article 41.3 also applies the relief to sale proceeds used to pay for a new main home bought in the previous two years.
- Both homes must be your main home. The one you sell must be so at the time of sale or on any day in the previous two years; generally, after at least three years living there, unless circumstances such as a separation or a job transfer apply.
- You must move into the new home within twelve months of buying it.
- You must reinvest the total amount obtained, minus the outstanding mortgage you pay off. If you reinvest only part, the relief is proportional.
- You can pay for the new home with a loan: according to the Tribunal Supremo (Supreme Court, judgment of 1 October 2020) and the Dirección General de Tributos (the tax rulings directorate), you don't have to use the same money from the sale.
- If you don't reinvest in the same year, state your intention to reinvest in that year's return; if you then fail to do so, you must file a supplementary return with late-payment interest.
With a bridging loan, the critical point is selling within two years of buying; if you sell first, it is finding a home within two years. The relief does not cover the plusvalía municipal (the municipal tax on the increase in land value), which is paid anyway. We explain both taxes in our guide to taxes when selling a flat in 2026.
The costs of each transaction at a glance
| Item | Transaction | Who pays | How much (guide) |
|---|---|---|---|
| Plusvalía municipal (municipal land value tax) | Sale | Seller | Depends on years of ownership and the land's cadastral value |
| IRPF on the gain | Sale | Seller | 19% to 30% of the gain, unless exempt |
| Paying off your mortgage | Sale | Seller | Outstanding capital, notary, land registry and agency fees; possible early repayment fee |
| Sale deed (original) | Sale | Seller, unless agreed otherwise | Official notary scale of fees |
| ITP (transfer tax) | Purchase | Buyer | 6% in the Madrid region; 4% for large families; 10% rebate on the tax for a main home worth up to €250,000 |
| Notary (copy) and land registry | Purchase | Buyer, unless agreed otherwise | Notary, €600–1,200; land registry, €400–800 |
| Valuation | Purchase | Buyer | Set by the valuation firm; with a bridging loan both homes are usually valued |
| Notary, agency, registration and tax on the mortgage | Purchase | Bank | No cost to you |
Sources: Comunidad de Madrid (ITP, 23-4-2026); Banco de España (mortgage guide); Rastreator (deed costs); Fieldfisher (savings income scale from 2025); Civil Code, art. 1455. ITP is calculated on the higher of the price and the cadastral reference value (valor de referencia) and must be filed within 30 working days.
Example timeline, week by week
This is only an example of chained transactions, selling first and signing both deeds on the same day. It assumes you find a buyer in about eight weeks, which is not guaranteed: almost half of the homes sold on idealista needed more than three months.
| Week | Your sale | Your purchase and mortgage |
|---|---|---|
| 1–2 | Valuation, nota simple (land registry extract), mortgage balance certificate, photos and listing | Simulation with the bank; area and budget |
| 3–8 | Viewings and written offers; in week 8, arras with the deed between weeks 19 and 21 | Viewings; you request the nota simple of the ones you like |
| 9–10 | The buyer applies for their mortgage | Arras for your purchase with the deed in the same window; you apply for your mortgage |
| 11–17 | Follow-up on the buyer's valuation and FEIN | Valuation, approval and FEIN, at least ten days before signing |
| 18–19 | Updated mortgage balance certificate | Visit to the notary about your loan, no later than the day before signing |
| 20 | Morning: sale deed and mortgage paid off | Afternoon: purchase and mortgage deeds; you get the keys |
| 21–25 | Plusvalía municipal and cancellation of the mortgage at the land registry | ITP within 30 working days; move, or hand over your old home on the agreed date |
Illustrative example; real timings depend on the market, the banks and the parties. FEIN and notary visit: Law 5/2019. ITP: Comunidad de Madrid.
Worked example in Madrid: sell first or buy with a bridging loan
A couple sell their 70-square-metre flat in the city of Madrid: at €6,458 per square metre (idealista, September 2026), about €452,000. They bought it in 2012 for €250,000 plus €20,000 in costs, it is their main home and they owe €90,000 on the mortgage. They want to buy a 95-square-metre flat for €610,000. In option B we assume the bank finances 100% of the price and absorbs the outstanding mortgage, which is reserved for solvent profiles. Selling fees, plusvalía, valuation and notary costs are assumptions; use your own figures.
| Item | A) Sell first (same day) | B) Buy with a bridging loan |
|---|---|---|
| Sale of your flat | €452,000 | €452,000, six months later |
| Fees (2.5% + VAT), plusvalía (€3,000) and registry cancellation (€600) | −€17,273 | −€17,273 |
| Outstanding mortgage | −€90,000, paid off | Included in the bridging loan |
| Purchase costs: ITP 6% (€36,600), notary and registry (€2,000), valuation (€400) | €39,000, from the sale money | €39,000, from your savings |
| Initial loan | €304,273 | €700,000 (610,000 + 90,000) |
| Cost while you sell | None if the signings coincide | About €2,384 a month in interest at 4.09%: €14,305 over six months |
| Debt after selling | €304,273 | €265,273 (plus €39,000 of savings paid upfront) |
| IRPF on the €165,327 gain | €0 with the relief (without it, €36,905) | €0 if you sell within two years of buying |
Rate in B: September 2026 Euribor (3.247%, Banco de España) plus 0.84 points (HelpMyCash). ITP: Comunidad de Madrid. IRPF: 19% up to €6,000, 21% up to €50,000 and 23% up to €200,000 (Fieldfisher), with no other gains in the year. Gain: €452,000 minus €16,673 in fees and plusvalía, minus €270,000 acquisition cost.
In the end, both options leave the same debt, about €304,000; what changes is the route. The bridging loan buys peace of mind and a single move, but costs about €2,400 a month until you sell and requires savings for the purchase costs. Selling first is cheaper if the signings coincide. In both cases, the reinvestment relief avoids about €36,900 in income tax, provided the requirements and deadlines are met.
How we do it at Llavely
At Llavely we have more than 35 years in the property sector, with specialised lawyers. If you sell with us in order to buy another home, our lawyers check the nota simple, charges and debts, calculate the taxes that apply, draft the arras with any special clauses needed (a window of dates, deferred handover or other conditions), review the deed and go with you in person to the notary.
We screen buyers before showing your home: we talk to each one, check their ID before the viewing and carry out the viewings ourselves. You follow everything from your private seller portal. If your buyer needs a mortgage, or you need one for your purchase, we put you in touch, free of charge, with a mortgage broker. All payments are made by bank transfer (standard or OMF), never in cash. You only pay if you sell, on the day of the notary signing: 2.5% + VAT of the price, all inclusive. Buying with Llavely is free.
Let's be honest: nobody can guarantee how long your home will take to sell or that both signings will fall on the same day. What we can do is help you start with a realistic price and contracts designed to chain both transactions. If you're thinking of moving, ask for your free valuation: we give you a range straight away, then we call you, see the property and fine-tune the price (we reply in English by email, message or phone).
Frequently asked questions
Is it better to sell my home first or buy first?
It depends on your situation. Selling first is safer if you need the sale money, because you know what you have, but you may need a short-term rental. Buying first lets you move only once, but you pay for two homes or a bridging loan until you sell. If you can agree flexible dates, the ideal is to chain both transactions.
What is a bridging loan in Spain and how much does it cost?
It is a loan that finances the new home and absorbs your current mortgage, with a grace period in which you pay only interest while you sell. As a reference, Banco Santander's had, according to HelpMyCash in October 2026, a rate of Euribor plus 0.84 points with discounts, an APR of 4.42% and a grace period of up to 12 months. Your actual cost will be set out in the FEIN.
Can the sale and the purchase be signed on the same day?
Yes, and that is usual when transactions are chained: first the sale, which pays off your mortgage, then the purchase. For it to work, the dates must be coordinated in both arras contracts and the FEIN for your mortgage must arrive at least ten days beforehand.
Can I keep living in my home after selling it?
Only if you agree it. Under article 1462 of the Civil Code, signing the deed is equivalent to handing over the property unless the deed says otherwise. A deferred handover must appear in the arras and in the deed, with a key-handover date and a penalty for each day of delay.
Do I have to pay income tax if I sell my home and buy another?
Not on the gain, if you reinvest the amount obtained in a new main home within two years, before or after the sale, and meet the other requirements. If there was a mortgage, the outstanding capital is deducted; if you reinvest only part, the relief is proportional. The plusvalía municipal is still payable.
Can I claim the relief if I buy the new home before selling?
Yes. Article 41.3 of the IRPF Regulation applies it to sale proceeds used to pay for a new main home bought in the previous two years, and the Supreme Court accepted in 2020 that it can be financed with a loan. If you sell more than two years after buying, you lose it.
Can I make my purchase conditional on selling my flat?
You can propose a prior-sale condition in the arras: if you haven't sold by a set date, you get your deposit back. The seller doesn't have to accept it and may ask for a short deadline in return. It's wise to have a lawyer draft the clause.
How long does it take to sell a flat in Madrid?
There are no official statistics. According to idealista, in the second quarter of 2026 only 11% of homes sold through its portal in the city of Madrid had been advertised for less than a week, and across Spain 47% needed more than three months. If you buy before selling, allow several months.
Sources
- Law 35/2006 of 28 November on Personal Income Tax, consolidated text updated on 7 October 2026 (BOE, Official State Gazette)
- Binding ruling V1950-25 on the main-home reinvestment relief, quoting articles 41 and 41 bis of the IRPF Regulation (Dirección General de Tributos, 15 October 2025, via fiscal-impuestos.com)
- Binding ruling V0668-24 on reinvestment with borrowed funds (Dirección General de Tributos, 15 April 2024, via fiscal-impuestos.com)
- Main-home reinvestment exemption, help manual for form 100 (Agencia Tributaria, Spanish Tax Agency, updated 28 July 2025)
- Tax changes for 2025: savings income tax scale (Fieldfisher)
- Banco de España resolution of 1 October 2026 on official mortgage market reference rates (BOE, 2 October 2026)
- What I need to know if I'm applying for a mortgage (Banco de España)
- Mortgages on dwellings, July 2026, press release (INE, 28 September 2026)
- Home sales fall for the seventh month running in July, General Council of Notaries data (Alimarket, 30 September 2026)
- Santander's Hipoteca Cambia de casa: terms (HelpMyCash, updated 2 October 2026)
- Madrid home prices in September 2026: figures and the most expensive neighbourhoods (idealista/news, 2 October 2026)
- 7% of homes sold on idealista in the second quarter were advertised for less than a week (Europa Press in Bolsamanía, 6 August 2026)
- Transfer tax (Transmisiones Patrimoniales Onerosas) (Comunidad de Madrid, updated 23 April 2026)
- Spanish Civil Code, book IV, title IV: the contract of sale, articles 1454, 1455 and 1462 (Civil-Mercantil, CEF)
- Temporary and room lets: the new rules landlords need to know (OCU, October 2026)
- How much a deed at the notary costs (Rastreator)