Blog
Buying a property in Spain is an exciting milestone, whether you're searching for a holiday home, an investment property, or a permanent residence. However, the purchase price is only part of the equation. Many buyers are surprised by the additional taxes, legal fees, and ongoing costs involved.
Understanding these costs before making an offer will help you budget accurately and avoid unexpected expenses.
Buying a New Build Property in Spain
New build properties are sold directly by the developer and are subject to different taxes than resale homes.
Purchase Costs
When buying a new build, buyers should typically budget around 13%–15% of the purchase price to cover all associated costs.
1. VAT (IVA)
Instead of transfer tax, new build properties are subject to VAT.
- 10% VAT on residential properties
- 21% VAT on commercial property and standalone garage spaces (beyond the permitted allocation)
For example:
- Property price: €300,000
- VAT (10%): €30,000
2. Stamp Duty (AJD)
Stamp Duty is payable in addition to VAT.
The rate varies depending on the autonomous region, generally ranging from:
- 0.5% to 1.5%
The exact amount depends on where the property is located.
3. Notary Fees
The notary prepares and authorises the public deed of sale.
Typical cost:
- €600–€1,500
depending on the purchase price.
4. Land Registry Fees
Registering ownership with the Land Registry generally costs:
- €400–€1,000
5. Legal Fees
Using an independent solicitor is strongly recommended.
Legal fees are usually:
- 1% of the purchase price plus VAT
A solicitor will typically:
- Check legal ownership
- Review planning permissions
- Verify building licences
- Ensure there are no debts attached to the property
- Arrange tax payments and registration
6. Mortgage Costs (If Applicable)
If financing your purchase, additional costs may include:
- Property valuation
- Mortgage arrangement fees (if charged)
- Home insurance
- Life insurance (sometimes requested by lenders)
Buying a Resale Property
A resale property is purchased from an existing owner rather than a developer.
Unlike new builds, VAT is not payable.
Purchase Costs
Most buyers should budget approximately 10%–14% of the purchase price.
1. Property Transfer Tax (ITP)
The biggest cost is Property Transfer Tax.
Unlike VAT, the rate varies by autonomous region and may be:
- Fixed
- Progressive based on purchase price
- Reduced for certain buyers (such as first-time purchasers or young buyers)
Typical rates range between:
- 6% and 10% (9% in the Alicante region)
For example:
A €300,000 resale property in a region with 8% ITP would incur:
- ITP: €24,000
2. Notary Fees
Generally:
- €600–€1,500
3. Land Registry
Usually:
- €400–€1,000
4. Legal Fees
Normally around:
- 1% plus VAT
5. Mortgage Costs
If required, buyers should also budget for:
- Property valuation
- Insurance
- Mortgage-related charges
Additional Costs Every Buyer Should Consider
Regardless of whether the property is new or resale, buyers should also budget for:
Utilities
Connecting or changing contracts for:
- Electricity
- Water
- Internet
- Gas (where applicable)
Community Fees
Apartments and urbanisations usually charge community fees covering:
- Swimming pools
- Gardens
- Lifts
- Security
- Cleaning
- Maintenance
These can range from:
- €30 to several hundred euros per month
depending on the development.
Property Insurance
Buildings insurance is highly recommended and may be required by mortgage lenders.
Annual Property Taxes
Owners should budget for ongoing expenses including:
- IBI (local property tax)
- Rubbish collection tax
- Community fees
- Non-resident income tax (where applicable)
Costs When Selling a Property in Spain
Selling also involves several costs that owners should understand before calculating their expected proceeds.
Estate Agent Fees
The largest selling expense is usually the estate agent's commission.
Typical rates range between:
- 3% and 6% plus IVA depending on the agency and location.
Capital Gains Tax
If the property has increased in value, sellers may be liable for Capital Gains Tax.
Residents and non-residents are taxed under different rules, with allowances and reliefs potentially available depending on individual circumstances.
Professional tax advice is recommended.
Municipal Capital Gains Tax (Plusvalía)
Many local councils charge Plusvalía Municipal, based on the increase in the value of the land during ownership.
The amount depends on:
- Municipality
- Length of ownership
- Cadastral value
Mortgage Cancellation Costs
If an existing mortgage remains, sellers may incur costs for:
- Mortgage redemption
- Notary fees
- Land Registry updates
Energy Performance Certificate (EPC)
Spanish law requires sellers to provide a valid Energy Performance Certificate before marketing their property.
Legal Representation
Many sellers appoint a solicitor to:
- Handle documentation
- Coordinate completion
- Calculate taxes
- Manage payments
Legal fees are commonly around 1% of the sale price plus VAT, although fixed-fee services are also available.
Example Budget
Buying a €300,000 New Build
| Cost | Approximate Amount |
|---|---|
| VAT (10%) | €30,000 |
| Stamp Duty | €3,000 |
| Legal Fees | €3,000 + VAT |
| Notary & Registry | €1,800 |
| Estimated Total Costs | Around €38,000–€42,000 |
Buying a €300,000 Resale
| Cost | Approximate Amount |
|---|---|
| Transfer Tax (8% example) | €24,000 |
| Legal Fees | €3,000 + VAT |
| Notary & Registry | €1,800 |
| Estimated Total Costs | Around €30,000–€34,000 |
Whether you're buying a brand-new apartment overlooking the Mediterranean or a charming resale villa inland, understanding the full costs involved is essential. Taxes, legal fees, and ongoing ownership expenses can significantly affect your overall budget.
Working with an experienced estate agent, an independent solicitor, and a qualified tax adviser will help ensure your purchase or sale proceeds smoothly, allowing you to enjoy your property in Spain with confidence.
If you would like more information regarding costs, please contact us today -
