Costs and Taxes When Buying Property in Spain
Plan your budget by understanding all additional costs on top of the purchase price.
It's Not Just the Sale Price: Additional Costs
When buying property in Spain, it's crucial to remember that the sale price is not the only expense you'll incur. A series of costs and taxes can increase the total acquisition cost by an additional 10% to 15% on top of the property price, depending on whether it's a new build or resale and the autonomous community where it's located.
Below, we break down the main expenses and taxes you should consider:
1. Main Taxes (vary by property type)
- If you buy a NEW property (directly from the developer):
- VAT (Value Added Tax - "IVA"): Generally 10% of the purchase price for housing. In the Canary Islands, IGIC (Canary Islands General Indirect Tax) applies, usually at 7%.
- AJD (Stamp Duty - "Actos Jurídicos Documentados"): This tax applies to notarial documents. The percentage varies by autonomous community, ranging from 0.5% to 1.5% of the purchase price.
- If you buy a RESALE property (from a private individual):
- ITP (Property Transfer Tax - "Impuesto de Transmisiones Patrimoniales"): This tax replaces VAT and AJD on resale properties. The percentage varies significantly between autonomous communities, generally between 6% and 10% of the purchase price declared in the deed (or the fiscal reference value if higher).
2. Notary Fees
- The notary's fees for formalizing the public deed of sale are regulated by law (notary tariffs) and depend on the property price. They usually range from approximately €600 to €1,200.
3. Land Registry Fees
- Like notary fees, the registrar's fees for inscribing the sale in the Land Registry are fixed by tariff and depend on the property's value. They are usually slightly lower than notary fees, estimated between €400 and €800.
4. Lawyer's Fees
- It is highly advisable to hire an independent lawyer to advise you throughout the process, review documentation (due diligence), and protect your interests. Their fees are usually a percentage of the purchase price (around 1% to 1.5% plus VAT) or an agreed fixed fee.
5. Mortgage Costs (if applicable)
- If you need a mortgage to finance the purchase, you will have additional costs:
- Property appraisal ("Tasación"): Mandatory for the bank, costing between €300 and €600.
- Arrangement fee ("Comisión de apertura"): Some banks charge this, it can be a percentage of the loan amount.
- Notary and Registry for the mortgage deed: These also entail costs, although the new Spanish mortgage law has assigned most of these expenses to the bank. The client usually pays for the appraisal and their copy of the deed.
- Associated insurance: Banks often offer interest rate bonuses in exchange for contracting insurance (life, home).
6. Other Possible Expenses
- Real estate agency fees: If you buy through an agency, they usually charge a commission to the seller, but it's good to confirm. In some cases, especially for rentals or if you request very specific search services, the buyer might pay a portion.
- "Gestoría" (administrative services - optional): If you don't want to personally handle tax payments and registration procedures, you can hire a "gestoría". Their fees can vary between €300 and €600. Your lawyer may include these services.
- Obtaining NIE: If you don't have it yet, there will be a small administrative cost.
- Sworn translations: If you need to translate official documents.
- Utility connection costs: Setting up or changing ownership of electricity, water, gas.
Total Estimation: As a general rule, be prepared for total expenses and taxes to add between 10% and 15% to the property's purchase price.