Property Buying Costs in Spain: Taxes, Fees & Hidden Costs
When budgeting for your Costa del Sol property, the purchase price is just the start. Taxes and fees add 10-15% to the cost in Andalucía. Understanding these upfront helps you budget accurately and avoid surprises. This guide breaks down every cost you'll face.
Total Buying Costs Summary
| Cost Type | Amount | Notes |
|---|---|---|
| Property Transfer Tax (ITP) | 7% | Resale properties only |
| VAT (IVA) + Stamp Duty | 10% + 1.2% | New builds only |
| Notary Fees | €600-1,200 | 0.2-0.5% of price |
| Land Registry | €400-1,000 | Fixed by regulations |
| Lawyer Fees | €1,500-3,000 | Essential, don't skip |
| Gestoría | €300-600 | Optional but helpful |
| Bank Charges | €200-500 | Transfers, checks |
| TOTAL | 10-15% | Of purchase price |
Property Transfer Tax (ITP) - Resale Properties
If you're buying a resale property (not new build), you'll pay Impuesto de Transmisiones Patrimoniales (ITP). In Andalucía, this is 7% of the declared purchase price. This is the single largest cost after the property itself. The tax is paid within 30 days of signing at the notary.
Declared Value Warning
Spanish tax authorities use "reference values" to check if properties are declared at market rate. If you under-declare, you risk an inspection and penalty. Always declare the true purchase price.
VAT (IVA) and Stamp Duty - New Builds
Buying directly from a developer? You'll pay VAT (IVA) at 10% instead of ITP, plus Stamp Duty (AJD - Actos Jurídicos Documentados) at 1.2% in Andalucía. Total: 11.2%. This applies to first-time sales of new properties only. If buying from an individual who bought new and is now selling, you pay ITP.
Notary Fees
The notary (notario) is a public official who oversees the signing and authenticates the transaction. Fees are regulated by the Spanish government and based on property price, ranging from €600-1,200 for typical purchases (approximately 0.2-0.5% of price). More complex transactions cost more.
Land Registry Fees
After completion, the deed (escritura) is registered at the Land Registry (Registro de la Propiedad). Fees are fixed by regulation and depend on the property price, typically €400-1,000. Registration protects your ownership legally - your lawyer handles this.
Lawyer Fees
A good English-speaking property lawyer typically charges €1,500-3,000 depending on property complexity and price. This covers due diligence, contract review, attending the notary signing, registering the deed, transferring utilities, and setting up direct debits. Do not skip this - it's the best money you'll spend.
What Your Lawyer Should Do
- Check land registry (nota simple) for ownership, charges, and debts
- Verify planning permissions and building licenses
- Review and explain all contracts before you sign
- Check for outstanding community fees or utility debts
- Attend notary signing with you or represent you with power of attorney
- Register the deed and pay taxes on your behalf
- Transfer utilities and set up community fee payments
Gestoría Fees
A gestoría is an administrative agency that handles paperwork and bureaucracy. They can obtain your NIE, process tax payments, and handle various registrations. Fees start around €100-300 for basic services, up to €600 for comprehensive support. Many lawyers include gestoria services, so check before hiring separately.
Example: Costs on a €400,000 Property
| Cost | Resale (ITP) | New Build (IVA) |
|---|---|---|
| Transfer Tax / VAT | €28,000 (7%) | €40,000 (10%) |
| Stamp Duty (AJD) | - | €4,800 (1.2%) |
| Notary | €900 | €900 |
| Land Registry | €700 | €700 |
| Lawyer | €2,500 | €2,500 |
| Gestoría | €400 | €400 |
| Bank Fees | €300 | €300 |
| TOTAL COSTS | €32,800 (8.2%) | €49,600 (12.4%) |
| TOTAL PURCHASE | €432,800 | €449,600 |
Mortgage Costs
If taking a Spanish mortgage, add: valuation fee (€300-500), arrangement fee (0.5-1% of loan), mortgage tax (now usually paid by banks in Andalucía), and potentially life insurance requirement.
Ongoing Costs After Purchase
Budget for annual costs: IBI (property tax, 0.4-1.1% of cadastral value), community fees (€50-500/month depending on development), home insurance, utilities, and non-resident income tax if you don't live there year-round. Your lawyer can explain the annual tax obligations.
Key Takeaways
- Budget 10-15% above purchase price for all buying costs
- Resale properties: 7% ITP is your main tax
- New builds: 10% VAT + 1.2% stamp duty = 11.2%
- Never skip the lawyer - €1,500-3,000 protects your entire investment
- Declared price must reflect true value or risk tax inspection