It is very important to know the approximate costs involved in the purchase of a property in Spain. Understanding these expenses will help you organise your finances properly when investing in Spanish real estate.
Main Property Purchase Taxes
The taxes on property purchase in Spain depend on whether the property is a new construction or a resale (second transmission):
a) New Construction
For newly built properties, the applicable tax is VAT (IVA) at 10%, plus Stamp Duty (Actos Jurídicos Documentados – AJD) at 1.2%. This means that the total tax burden is 11.2% of the purchase price. VAT is paid directly to the developer at each payment stage, while the Stamp Duty must be paid to the Andalusian Tax Office after completion.
b) Resale / Second Transmission
For resale properties, the applicable tax is the Property Transfer Tax (ITP), currently set at 7%. This tax must be paid to the regional tax office within one month of completion.
Other Costs to Consider
- Notary and Registry fees: The Escritura (title deed) must be signed before a Notary Public and then registered in the Land Registry. These costs vary depending on the value and length of the deed but usually amount to less than 1% of the property price. For example, on a property worth €200,000, the combined fees are typically under €2,000.
- Legal fees: While not strictly mandatory, hiring a solicitor is highly recommended. Average legal fees are around 1% of the property price plus VAT, depending on complexity.
- Mortgage costs: If you require financing, additional expenses include valuation fees, opening commissions, and mandatory insurance policies. These should be factored into your budget.
Conclusion
The costs of buying a property in Spain usually add up to between 10% and 13% of the purchase price, depending on whether it is a new build or resale. Proper planning and legal guidance will ensure a smooth and secure transaction.
