Buying a Property in Spain: Costs, Taxes, and Fees

Buying property in Spain can be an exciting yet complex process, especially for expats. This guide outlines the real costs involved in purchasing a property in Spain in 2024, including taxes, fees, and additional expenses. Dollar equivalents are provided in parentheses for reference.

Initial Costs

  • Property Deposit: Banks typically finance 80% of the property value for main residences, requiring a 20% deposit from the buyer.

  • Additional Costs: Experts recommend having extra savings of 10-12% of the property value to cover taxes and fees.

Fees Involved in Buying Property

Notary Fees

  • Regulated by the state

  • Usually between €600 - €875 ($648 - $945) (varies based on property price)

  • Example: 

  - €100,000 ($108,000) property: approximately €850 ($918)

  - €250,000 ($270,000) property: approximately €1,000 ($1,080)

Land Registry Fees

  • Fixed by Spanish regulations

  • Range: €400 - €700 ($432 - $756) (depends on property price)

  • Typically 1-2% of the property price

Real Estate Agent Fees

  • Usually paid by the seller, but confirm this with the agent

Taxes When Buying Property in Spain

For New Homes

1. VAT (IVA)

  • 10% of the property price (7% in Canary Islands, known as IGIC)

  • 4% for subsidized housing (varies by region)

2. Stamp Duty (AJD - Actos Jurídicos Documentados)

  • Varies by region, generally 0.5% - 2%

For Pre-owned Homes

  • Property Transfer Tax (ITP)

  • Varies by region, generally 6% - 10%

Regional Tax Variations (Examples)

  • Madrid: 6% ITP for pre-owned homes, 0.75% AJD for new homes

  • Catalonia: 10% ITP for pre-owned homes, 1.5% AJD for new homes

  • Andalusia: 7% ITP for pre-owned homes, 1.2% AJD for new homes

Additional Mortgage Costs

Property Valuation

  • Cost: €250 - €600 ($270 - $648)

  • Required for mortgage applications

  • Valid for 6 months

Mortgage Opening Fee

  • Up to 2% of the loan amount (many banks don't charge this)

Insurance

  • Home insurance often required

Total Costs Example

For a €200,000 ($216,000) property in Madrid:

Expense

New Build

Pre-owned

Notary

€1,000 ($1,080)

€1,000 ($1,080)

Registry

€500 ($540)

€500 ($540)

Agency

€300 ($324)

€300 ($324)

VAT

€20,000 ($21,600)

N/A

AJD

€1,500 ($1,620)

N/A

ITP

N/A

€12,000 ($12,960)

TOTAL

€23,300 ($25,164)

€13,800 ($14,904)

Potential Pitfalls

  • Complex legal processes

  • Property scams

  • Urban planning irregularities

  • Ongoing maintenance costs

  • Market volatility

  • Currency exchange risks

  • Residency and tax implications

Recommendations

  • Conduct thorough research

  • Perform due diligence

  • Work with reputable professionals (real estate agents, lawyers, financial advisers)

  • Consider using a "gestor" for paperwork (especially useful for expats)

Conclusion

When budgeting for a property purchase in Spain, factor in an additional 10-12% of the property price to cover all associated costs and taxes. The exact amount will depend on the property value, location, and whether it's a new build or pre-owned home.

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Note: This guide is based on 2024 data. Dollar equivalents are provided using an approximate exchange rate of 1 EUR = 1.08 USD. For the most current information, exchange rates, and personalized advice, consult with local real estate professionals and legal advisors.

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