Before you start house-hunting in earnest, it’s important that you know what you’re letting yourself in for financially. The costs involved in buying a property vary greatly between regions and also depend on the kind of property you’re buying.
As a very rough rule-of-thumb, you can assume you’ll need between 10% and 13% of the purchase price to cover the costs of buying it, but here’s a more detailed breakdown, with space for you to write the figures that apply to you.
The costs involved when buying property in Spain
| Costs | What they entail | How much? |
| Lawyer fees | You’re not obliged to use the services of a lawyer, but you’d be crazy not to. | Typically, 1-1.5% of the asking price plus VAT |
| Notary fees | The notary draws up the deeds (escritura). Fees are set by the government and are based on the sale price of the property. If there’s a mortgage involved, the fees will be higher. | 0.4% for cheaper properties to 0.1% for expensive ones. Allow 500-1000 euros |
| Estate agent fees | It is usually down to the seller to pay a standard fee of 5% for urban property (and up to 30% for rural properties) of the sale price, depending upon the region and type of property. However, in some cases, the buyer may be expected to pay a proportion of these, so do check. | Standard of 5% |
| Land registry fees | This is based on the selling price but differs depending on the municipality. | 300 to 500 euros |
| Survey | Not compulsory but strongly advised. The cost will depend on whether you include a valuation and commission a condition report, building survey, or structural report. | 450-2,000+ euros |
| Property valuation | A property valuation is required by the bank if you are seeking a mortgage. | 800 euros |
IVA (VAT)
| New-build homes only: Spanish VAT is called IVA (Impuesto de Valor Añadido) and is payable on previously unoccupied homes. | 10% of purchase price |
| AJD (stamp duty) | New-build homes only: Spanish stamp duty is called Actos Jurídicos Documentados or AJD. | 0.5%-1.5%, depending on which part of Spain |
| IPT (property transfer tax) | Second-hand homes attract a transfer tax called ITP (Impuesto de Transmisiones Patrimoniales), which must be paid within one month of purchase. | Between 6-11%, depending on which part of Spain |
| Banker’s draft | This is the most common method of paying the balance on completion. The bank charges are quite hefty. | Varies. Typically, 0.5% of the value of the cheque |
| Foreign Exchange Specialist Co | Companies specialising in transferring money between currencies and countries. | They are always cheaper than standard bank transfers. |
Post-completion: the ongoing costs of owning a property in Spain
Don’t forget to take the ongoing costs of property ownership into account when doing your sums, such as property tax. As well as the usual maintenance, repairs, insurance, utilities and so on, you can expect to pay several taxes and fees:
Property Ownership Tax (Impuesto Sobre Bienes Inmuebles or IBI) is the equivalent of Council Tax in the UK and is based on the cadastral value (valor catastral) as determined by the municipal government.
The rate ranges from 0.4% – 1.1% of the cadastral value, depending on where it is.
We offer the following service: IBI tax (town hall rates) and refuse collection (basura)
Annual Wealth Tax (Impuesto Sobre Patrimonio). If your taxable wealth (which includes land and property) exceeds 500,000 euros in most regions, you could be subject to wealth tax on your net assets, whether you’re resident or non-resident.
The rate varies depending on which part of Spain the property is in. In Andalusia, for example, resident married couples have a combined tax allowance of over 2 million euros.
We offer the following service: Wealth Tax
- Non-Resident Imputed Income Tax, NRIIT (Impuesto Sobre la Renta de No Residentes). If you are non-resident, and own a property in Spain, you will have to pay income tax once a year:
If the property is not rented out, the tax rate is fixed at 19% for EU residents and 24% for the rest of the world, at either 1.1% or 2% of the cadastral value of the property, depending on whether the latter is ‘revised’ or ‘unrevised’.
We offer this accounting service: Non-Resident Imputed Income Tax, NRIIT (Annual Fiscal Representation Service)
If you do rent out the property, you will have to declare the income every tax quarter and pay tax on it. The tax rate is 19% of net earnings for EU residents and 24% of gross earnings for the rest of the world.
We offer this accounting service: Holiday Rental Accounting Service (HRAS)
- If the property is owned by a holding company, the tax authorities will assume that you are renting it out and charge tax on their estimate of the income.
- Community Fees: If your property is part of a complex or building with common parts, you will be obliged to join the community of owners (Comunidad de Propietarios) and pay charges for maintenance of common areas and any shared services. These charges can be very steep – as much as several hundred euros a month for luxury gated communities in coastal areas.
Larrain Nesbitt Abogados is a Spanish law firm specialized in conveyance, taxation, inheritance, residency, and litigation.
You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.
The information provided in this guide is of general interest only and is not to be construed or intended as a substitute for professional legal advice.
2.022 and 2.026 © Raymundo Larraín Nesbitt and Andrew Rogers. All Rights Reserved. Voluntas Omnia Vincit.
