Guide 2
Costs & Taxes
The price on the listing is never the whole bill. This guide explains the usual extra costs of buying a home in Spain and the taxes that come with owning one. Rates are set nationally or by each region and they change, so use the figures to plan, then check the current numbers for your purchase.
Taxes on the purchase
| Tax | When it applies | Typical level |
|---|---|---|
| Transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP) | Resale homes bought from a private seller | Set by each region, commonly 6–10% of the price, with reduced rates in some regions for young buyers, large families or cheaper homes |
| VAT (IVA) | New homes bought from a developer | 10% for homes; 21% for plots, commercial premises and garages sold separately |
| Stamp duty (Actos Jurídicos Documentados, AJD) | Charged alongside VAT on new builds | Set by each region, often 0.5–1.5% |
| IGIC | New homes in the Canary Islands | Replaces VAT there, at its own rates |
Fees
- Notary. Fixed by an official scale linked to the price and the length of the deed. For a typical home, usually several hundred euros up to around two thousand.
- Land Registry. Also on an official scale, generally a few hundred euros.
- Independent lawyer. Optional but common. Many quote around one per cent of the price plus VAT, sometimes with a minimum.
- Gestoría. An administrative agency that some buyers or banks use to file taxes and register the deed, for a set fee.
- Translation and powers of attorney, if you need a sworn translator at the signing or someone to sign for you.
If you take a mortgage
Since rule changes in 2018 and 2019, banks pay most mortgage set-up costs, including the stamp duty on the mortgage deed, the notary’s fee for that deed and the registry fee. The borrower generally pays the valuation (tasación) and the copy of the deed they ask for. Check the binding offer for any arrangement fee.
Who pays what
By default the seller pays the municipal plusvalía tax on the rise in land value and the notary’s fee for the original deed, while the buyer pays for their own copy of the deed, the registry and the purchase tax. Contracts can change this, so read the clauses on costs before you sign the deposit contract.
Owning a home: yearly costs
- IBI. The local property tax, charged by the town hall each year on the cadastral value.
- Community fees. For flats and many developments, paid monthly or quarterly to the community of owners.
- Rubbish collection, charged locally in many towns.
- Non-resident income tax. Non-resident owners file a yearly return on a deemed income from the property even when it is not let, and a separate return on any rental income.
- Insurance and utilities, which vary with the home.
A planning rule of thumb. For a resale home, many buyers set aside about ten to fifteen per cent of the price for purchase costs. Lower-tax regions and cash purchases sit at the bottom of that range.
Questions worth asking
- What is the current transfer-tax rate in this region, and do I qualify for a reduced rate?
- Is the price stated with or without VAT?
- Which costs does the contract put on the buyer?
- Are the community fees and IBI up to date?