Taxes in Spain differ depending on whether you are buying a new-build (from a developer) or resale property (second-hand property or reventa, in Spanish).
In addition to the above, taxes are not uniform in Spain. Spain is divided administratively into 17 autonomous regions that have devolved competencies on tax matters. This allows them to approve - within limits - their own tax rates within a sliding scale. Meaning that a resale property that is sold, for example, in Madrid will not have the same tax rates as one sold in Mallorca, as they are both located in different regions, subject to different tax rates.
Which is why we strongly recommend that a buyer should pre-empt this scenario by requesting from his appointed lawyer a breakdown of the associated taxes and expenses to budget carefully and avoid any nasty last-minute surprises.
As a rule-of-thumb, purchase costs add 10 – 12% over and above the asking sales price. We collate below the most common taxes and associated fees on buying property in Spain. Again, we stress that the charts below are merely a generalisation; please take concrete tax advice on your matter. All fees quoted below have VAT on top.
New-build/off-plan property taxes
| Taxes & Fees | Rate |
|---|---|
| VAT (IVA) | 10 % |
| Stamp Duty (AJD) | 0.5 – 1.5 % |
| Land Registry fees | 0.1 – 2 % |
| Notary Public fees | 0.1 – 2 % |
| Lawyer’s fees | 1 % |
| Mortgage fees (*) | several hundred € |
Resale property taxes
| Taxes & Fees | Rate |
|---|---|
| Property Transfer Tax (ITP) | 6 to 11 % |
| Land Registry fees | 0.1 – 2 % |
| Notary Public fees | 0.1 – 2 % |
| Lawyer’s fees | 1 % |
| Mortgage fees (*) | several hundred € |
*Only apply if a mortgage loan is required from a lender (i.e. bank)
Once you buy a home in Spain, there are several post-completion taxes and ongoing maintenance costs you should be aware of.
Pro-tip: you can offset ALL the above-listed fees and taxes on selling (yes, purchase taxes can be offset too), besides many others. This will greatly mitigate your Capital Gains Tax bill on selling. Which is why you are strongly advised to keep all purchase-related VAT invoices and taxes paid. If you follow our tax advice, we can save you dozens of thousands of euros in tax on selling. We explain how to mitigate CGT in our taxation article.
Related LNA services:
- Conveyancing in Spain – Buying
- Domiciling IBI tax (town hall rates) and refuse collection (basura)
- Non-Resident Imputed Income Tax, NRIIT (Annual Fiscal Representation Service)
At Larrain Nesbitt Abogados (LNA) we have over 23 years of experience specialising in property conveyance and taxation. We also assist clients with immigration & residency visas (digital nomad visa), and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarising, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. Voluntas omnia vincit.
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