Buying Property in Spain

Buying Property in Spain

The actual cost of Buying Property in Spain is not only the price that you see in the ads, it implies an important amount of costs such as taxes, fees and other expenses of various categories that increase the final bill.

The cost vary depending whether the property is newly built or is a resale.

Also has influence the type of property (dwelling or not) you are buying.

And furthermore, depending on the autonomous community of Spain where the property you are buying lies, there will be different costs and taxes.

The selling process

  • Buying property in Spain: The common costs
  • Notary
  • Land Registry
  • Cost of buying property in Spain: The taxes
  • Taxes with new build property
    • VAT
    • Stampt duty
  • Taxes with resale property
    • Transfer tax

Buying Property in Spain

  • Cost of buying property in Spain: In case you need a Mortgage
  • Property appraisal
  • Disbursement fee
  • Notary
  • Stamp duty
  • Land Registry
  • Insurances
  • Administrative manager

Other possible costs buying property in Spain

  • Real estate agency fees
  • Lawyer in Spain fees
  • Banking costs

So, first of all, we will see the common costs of buying property in Spain and later will see the particular case of each kind of property.

Buying property in Spain: The common costs


When you buy a property in Spain is usual signing a contract. This could be a private document, the law in Spain considers the private document as a perfectly valid mode to formalize a business, which means that if you sign a document of this kind will be legally bound by all its contents. You must go through all the covenants contained that are not contrary to law.

The problem is that the private contract only affects to the counterparts involved, and third parties do not have to know its content. For this reason, and to avoid any legal problem about our property is necessary to publish the new legal status of the property acquired. In Spain this publicity is achieved by registration in the land registry, which means another cost buying the property.

For a purchase contract access to the Land registry must be contained in a public deed, which is signed before a notary. This circumstance makes an obligation to pay the notary cost buying property in Spain.

Therefore, Notary costs are those produced by signing the purchase deed. Notary costs are set by law and the amount depends on the price of the property, but can be increased by circumstances such as the number of copies of the deed, document length, etc. On the other hand, this cost also can be decreased by circumstances affecting the property, as in the case that the property is subsidized.

The notary cost buying property is the same throughout Spain and is fixed by the following rate established by Spanish Royal Decree 1426/89:

When the value of the property does not exceed 6,010.12 €, the cost is 90.15€.

From 6010.13 € to 30,050.61€, the cost will be 4.5 per thousand.

Between 30,050.62 € and 60,101.21 €, the notary cost is 1.50 per thousand.

From 60,101.22€ 150,253.03€ the rate goes to 1 per thousand.

From 150,253.04€ to 601,012.10 € is applied 0.5 per thousand.

From 601,012.10 € to 6,010,121.04 €, here the cost is 0.3 per thousand.

If the value of the property is over 6,010,121.04 €. In the case of these amounts the cost will be agreed with the notary.

Land Registry

The purpose of the Land Registry in Spain is to give legal security, acting as a public archive in which the facts around the property are recorded, acting as a universal publicity of the legal situation of the property. As we saw before, the registration of the purchase deeds at the Land Registry is not mandatory, but this cost, talking in legal terms, is the best investment you can do when buying property in Spain. If decide do not inscribe the property we are taking enormous risks.

Therefore, Land Registry cost is the one produced by inscribing the purchase deed. As the notary cost, the Land Registry cost is set by law and the amount depends on the price of the property or right to be inscribed. This cost can be reduced by circumstances affecting the property, as in the case that the property is subsidized.

The Land Registry cost buying property is the same throughout Spain and is fixed by Spanish Royal Decree 1427/89:

For registration, annotation or cancellation of each property or right, the cost is set by the following scale:

If the value of the property or right does not exceed 6,010.12 euros, the Land Registry cost is 24.04€.

From 6010.13€ to 30,050.61€, the cost will be 1.75 per thousand.

Between 30,050.62 and 60,101.21€, the rate goes to 1.25 per thousand.

From 60,101.22 and 150,253.03€, is applied the 0.75 per thousand.

From 150,253.04 and 601,012.10€, here the cost is 0.30 per thousand.

For value exceeding 601,012.10€, in that case the cost will be 0.20 per thousand.

These costs are common to every purchase. Now we are going to see the different taxes when buying property in Spain, which varies depending whether the property is a new built or resale, and depending on the kind of property.

Cost buying property in Spain: The Taxes

Taxes buying property in Spain: New build


Taxes are the largest cost, after the price, when buying a property in Spain. In the event that what you are buying is a new property in Spain, the main tax you will pay is the VAT (IVA in Spain). The term “New property” means the one acquired to the developer after its construction. What matters to be taxable by the IVA, is that the property is conveyed for the first time.

Depending on the type of property that is transmitted for the first time the cost of the tax is different:

If what you are buying in Spain is a home, the tax rate will be 10%.

In the event that housing is subsidized, the VAT rate in Spain is 4%.

The other properties such as premises, plots, garages and storage rooms are taxed at the VAT rate of 21%. The exception to the rule is in the garages (2 max) and the storage rooms, that when are conveyed together with a dwelling in the same deed, are taxed as the home.

In the case of the Canary Islands, the cost buying a property, which represent the taxes, is considerably reduced compared to the rest of Spain, since the properties, rather than be taxed by IVA, they are by the IGIC Tax, Impuesto General Indirecto Canario.

Stamp duty. Impuesto sobre Actos Jurídicos Documentados (IAJD)

This cost buying property is a tax that applies to all acts formalized in public documents. The general rate is between 0.5% and 1.5% depending on the Spanish autonomous community where the property is located. Besides, the type of property transmitted is also taken into account, what makes the cost of this tax often varies, having special cases where the conveyance is exempt, with zero cost.

Taxes buying property in Spain: Resale Property

The Transfer Tax. Impuesto sobre Transmisiones Patrimoniales (ITP)

As with the VAT for new build, the main cost of buying resale property in Spain is the socalled Impuesto de Transmisiones Patrimoniales (ITP). When what is conveyed by the seller is a used property, the buyer is obliged to pay this Transfer Tax (ITP). The tax rate depends on the autonomous community in which the acquired property lies, being, in most communities, between 6% and 10%. There are also reduced rates for some cases (subsidized property, large families, young buyers …).

These are the tax rates for the most popular autonomous communities to invest in property in Spain. If you need to know the cost of buying property in another autonomous community, let us know and we will help you.

These are general basic lines on the transfer tax in Spain. There are requirements to meet for each tax rate, and other rates not mentioned here due to they are unusual cases.

Cost of buying property in Spain: In case you need a Mortgage

Besides all the costs seen before, in the event of needing a mortgage the cost buying the property in Spain will increase. Most people who decide to buy a property in Spain have to get a mortgage to afford it. This increases the cost of purchase with the following

The cost of the property appraisal

The bank always orders an appraisal of the property to be mortgaged. This assessment is required by law and must be made by an appraisal company entitled and registered with the Bank of Spain. The report is used to determine the actual value of the property, and the amount borrowed is a percentage of this value. Its cost in Spain use to be between the 250-450 €, depending on the appraisal company and on the final value of the property you are buying.

The disbursement fee

This one may become a huge cost when buying property in Spain. Depending the bank, normally is between 0% and 2% of the capital borrowed. This amount is deducted directly from the money given to the borrower.

The cost of the mortgage deed notarized

As with the purchase agreement, the contract including the loan of the money we receive for buying the property, must be embodied in a deed signed before a Notary. This notary cost is based on the same rates seen before for the common costs buying a property.

Taxes: The stamp duty (again)

Impuesto sobre Actos Jurídicos Documentados (IAJD). This tax is paid whenever a notarial deed must be inscribed in the Land Registry. The tax rate applicable shall be determined by each autonomous community, but will be generally between 0.5% and 1.5%. When buying a new built property in Spain, this one, is a duplicate cost due to the Stamp duty (IAJD) is paid together with the VAT (IVA in Spain) attached to the purchase deed, and is paid here as well, together with the mortgage deed.

A very important fact is that, for calculating the tax, the taxable base is not the loan amount but the Total mortgage liability (loan amount + interest + default interest + possible legal costs + expenses). The mortgage liability is different depending on each entity and may be in most cases between 135% and 200% of the loan value. Keep this in mind when negotiating with your bank because this little hidden detail may unexpectedly increase the costs of buying property in Spain.

The Land Registry again

This cost buying property in Spain, now is the fee generated by registering the mortgage at the Land Registry. As with the notary, this registration cost is based on the same rates seen before for the purchase deed registration.

The Insurances

In case of a mortgage buying a property in Spain, is mandatory that the buyer has a damage insurance that covers at least the fire risk on the property adquired. Sometimes the bank also imposes other types of insurance such as home insurance, life insurance and disability and payment protection. Nowadays, when negotiating the mortgage terms with Spanish banks, the hiring of their insurance policies is a must when you’re trying to get a lower interest rate.

Anyway, even if you do not have the mortgage, always is a good idea to have a home insurance that cover every unforeseen circumstance.

Administrative manager

Needing a mortgage to buy the property in Spain, the bank requires that all paperwork and tax payment is made by someone they trust. Therefore, the cost of the administrative manager company is imposed by the bank, even if you are capable to do the paperwork by yourself. Administrative manager is in charge of the tax payment on your behalf and takes all the necessary steps on the way to the registration of the purchase and mortgage deeds in the Land Registry.

Their fee is not regulated and may vary from company to company. The figure is around 300 € cost per notary deed (purchase + mortgage).

Other expenses that increase the cost buying a property in Spain

According to the particular circumstances of each purchase, could be generated other costs buying the property.

Real estate agency fees

The usual way to proceed in Spain is that the realtor fees are paid by the seller. Anyway, when you start dealing with the agent buying the property, try to be sure that it will be in such way in order to avoid unpleasant surprises. The amount is usually 5% of the property value, but only the official Spanish real estate agents have a fixed fee established by their professional body.

The Aspe Villas fee is always be paid by the vendor

Lawyer in Spain fees

All complications that may arise being a different country, with a language you probably do not know in legal terms, with different laws relating to real estate…Make advisable to have a lawyer specialized and experienced in property in Spain. The cost of their fees depends on the complexity of the purchase, the tasks entrusted and the time used in the advice and execution of the property conveyance. Being a licensed lawyer practicing in Spain, the cost of their fees is fixed by the rules of the Lawyer Bar. As a guide, and depending on the circumstances of each case, the cost will be around 1% -1.5%.

Banking costs

At the moment of paying for the property bought, due to the regulations in Spain against the money laundering, is mandatory do it through a Bank check. In order to do that, you will need to open an account in a bank operating in Spain and transfer money there from the bank in your own country. The cost of transferring the money can go up to 0,4% of the amount transferred. The Bank check has high emission fees, around 0,5% of its amount.

These costs are negotiable, but better do it in advance to the moment of purchase.

The CONCLUSION about the cost buying property in Spain is that the most of the expenses are fixed in the form of taxes, notary and registration fees, but is important to pay attention to the bank fees to avoid surprises.

» Contact us for more information about selling property in Spain or take a look to our Aspe blog for villas in Costa Blanca South

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