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The Real Costs of Buying a Property in Spain
Budget 10-14% on Top of the Purchase Price
The price you agree with the seller is not what the purchase costs. As a working rule, a buyer in Spain should budget roughly 10% to 14% of the purchase price in addition to the price itself.
The single largest component is the purchase tax, and which tax applies depends on whether you are buying a resale or a brand new property from a developer. The remainder is made up of notary fees, Land Registry fees and legal fees, all of which are broadly predictable.
Buyers who budget only for the price and the deposit are the ones who run into difficulty shortly before completion. We provide a written breakdown for your specific purchase before you commit to anything.
Tax rates are set regionally and are revised periodically. The figures below are indicative; we confirm the exact position for your property and region.
Purchase Tax: Transfer Tax or VAT
Resale properties are subject to transfer tax (Impuesto de Transmisiones Patrimoniales), a regional tax. In the Valencian Community, where Altea is located, it is charged at the standard regional rate, with reduced rates available in specific circumstances such as certain purchases by young buyers or of a main residence.
New builds bought from a developer are subject instead to VAT (IVA) at the rate applicable to residential property, plus stamp duty (Actos Jurídicos Documentados). Buying new is therefore taxed on a different basis from buying a resale, and the totals can differ noticeably.
An important warning: tax is calculated on the higher of the declared price and the reference value assigned by the cadastre. If you buy below that reference value, the tax office can assess the difference and issue a supplementary bill months later. We check this before you sign. The reference value is published by the cadastre for each property, so it can be confirmed before signing; ownership and charges, by contrast, are checked on the nota simple from the Land Registry. The background to that valuation is covered in our article on the reference values for urban real estate.
Notary, Land Registry and Legal Fees
Notary
Notary fees are set by official scale and depend mainly on the price and the complexity of the deed. The notary authorises the deed of sale and verifies the identity and capacity of the parties.
Land Registry
Land Registry fees are likewise scaled, and cover registering the purchase in your name. Until this is done, your ownership is not protected against third parties.
Legal fees
Legal fees cover the independent work: Land Registry checks, review of the contracts, verification of the planning and licence position, tax calculation, attendance at the notary and the registration itself. We quote a fixed fee at the outset so you know the figure in advance.
Spanish mortgage
If you take a Spanish mortgage, add valuation and mortgage arrangement costs. Since the 2019 mortgage reform, most of the associated costs fall on the lender rather than the borrower, but the valuation does not.
What You Will Pay Every Year After You Buy
IBI
IBI, the annual council property tax, based on the cadastral value.
Non-resident income tax
Non-resident income tax (Modelo 210), payable every year even if you never rent the property out. This is the obligation foreign owners most often overlook, and it surfaces years later when they sell.
Community fees
Community fees, if the property is part of a development or block, covering shared maintenance, pools and gardens.
Utilities and insurance
Rubbish collection, utilities and insurance, plus wealth tax where the value of your Spanish assets exceeds the applicable threshold.
We set out the annual running costs alongside the purchase costs, so the decision is made with the full picture rather than half of it.
Get Your First Consultation for FREE!
Want to know exactly what your purchase will cost? A free initial consultation with a written breakdown, before you commit to anything.
Our Fixed-Fee Conveyancing Includes
- A written breakdown of all purchase costs before you commit.
- Confirming which purchase tax applies to your property and at what rate.
- Checking the cadastral reference value to avoid a supplementary tax assessment.
- Obtaining and interpreting the nota simple from the Land Registry.
- Reviewing the reservation and private purchase contracts before you sign.
- Verifying licences, planning status and the occupancy certificate.
- Checking for unpaid community fees, IBI and utility debts.
- Holding your deposit securely in our client account.
- Attending the notary and paying the purchase taxes on your behalf.
- Registering the property in your name at the Land Registry.
- Transferring utility contracts and setting up direct debits.
- Explaining your ongoing annual obligations as a non-resident owner.
Frequently Asked Questions About the Costs of Buying in Spain
How much should I budget on top of the purchase price?
As a general rule, between 10% and 14% of the price. The main variable is the purchase tax, which depends on the region and on whether the property is a resale or a new build.
Is it cheaper to buy a new build or a resale?
They are taxed differently: resales attract transfer tax, new builds attract VAT plus stamp duty. Which works out cheaper depends on the region and the figures, and tax is only one part of the comparison — build quality, guarantees and completion risk matter too.
What is the reference value and why does it matter?
It is a value assigned by the cadastre that acts as a minimum taxable base. If you buy below it, tax is still calculated on the reference value and the tax office can issue a supplementary assessment later. We check it before you sign so there are no surprises.
Do I need a Spanish bank account?
In practice yes. It is needed to pay the purchase price by bank transfer or banker’s draft, to set up direct debits for utilities and IBI, and to receive any tax refund.
Are your legal fees fixed?
Yes. We quote a fixed fee for the conveyancing at the outset so you know the figure in advance. No hidden extras is one of the commitments we make to every client.