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Find out about the costs of buying a home in Spain.

  • 22/07/25

Buying a property in Spain is a dream for many people, whether as a permanent residence, second home or investment. However, it is crucial for buyers to be aware of all the costs associated with the transaction to avoid unpleasant surprises. In addition to the purchase price, there are a number of related costs, such as notary fees, taxes and registration fees, which can add an additional 10-15% to the price of the property. In 2023, the average price of housing in Spain was €1,907 per square metre, according to the National Statistics Institute (INE), which means that, for a 100 square metre home, the total purchase cost could easily exceed €210,000 when all costs are included.

On the other hand, the situation of the real estate market in Spain has shown a growing trend. In the Valencian Community, a popular destination for international buyers, the purchase of properties by foreigners accounted for 21% of all real estate transactions, a clear sign of the region’s attractiveness for those seeking a holiday or permanent residence in Spain.

If you are thinking of buying a property in Spain, it is important that you consider all the associated costs. Who must be paid and what specific expenses must be covered?

  1. The Seller:

    • Purchase price: This is the main cost. If the seller is not resident in Spain, 3% of the sale price will be withheld to pay the tax authorities (Hacienda). The buyer will pay the remaining 97% to the seller. This withholding is to ensure that the seller pays the corresponding taxes on the capital gain generated by the sale.

  2. Notary fees:

    • These costs are normally the responsibility of the buyer, although they can be negotiated. Notary fees depend on the price of the property and are usually around 0.5% of the purchase price. It is the notary who drafts and certifies the public deed of purchase, ensuring that the process is carried out legally.

  3. Land Registry fees:

    • They are paid by the buyer to register the property in his name in the Land Registry. This process ensures the legal ownership of the property and the rights over it. The cost is usually around 0.4% of the purchase price.

  4. Transfer Tax or VAT + Stamp Duty (AJD):

    • This tax varies depending on whether the property is new or second-hand. In the Valencian Community, for example:
      • If it is a second-hand property, the buyer will pay Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP), which amounts to 10% of the purchase price.
      • If it is a new property, you pay 10% VAT and 1.5% AJD, and you do not pay ITP.

  5. Legal fees:

    • Although it is not compulsory to hire a lawyer, it is highly recommended to ensure that the whole purchase process runs smoothly. Fees can vary, but are generally estimated to be around 1% of the purchase price plus VAT, or between €1500 and €3000, depending on the value and complexity of the transaction.

  6. Costs associated with the mortgage:

    • If the purchase is financed by means of a mortgage, certain costs will also have to be paid, such as the valuation of the property, which usually costs around €400. In addition, the buyer will have to cover the notary and registry fees for the mortgage deed.

  7. Municipal Tax on the Increase in the Value of Urban Land (Plusvalía Municipal):

    • This tax is paid by the seller and is calculated according to the increase in the cadastral value of the land during the period of ownership. The rate varies according to the town or city where the property is located.

  8. Real Estate Tax (IBI):

    • This is an annual tax paid by the owner of the property, calculated on the cadastral value of the property. It is important to take this recurrent expense into account when buying a property.

  9. Wealth tax:

    • This tax is payable by those owners whose total value of all their assets exceeds a certain threshold, which varies by autonomous community. Generally, there is an exemption of up to €700,000 in net worth. If you exceed this threshold, you will have to pay annually according to the value of your total assets.

Other costs when buying a property in Spain

In addition to the most common costs associated with buying a property in Spain, such as the purchase price, transfer taxes and notary fees, there are other important costs to consider when owning or selling a property.

Income Tax for Non-Residents and Residents

If you are not resident in Spain, you will have to pay Non-Resident Income Tax (IRNR) on income earned in the country, even if you do not rent the property. For non-residents who do not rent out the property, the tax authorities calculate a notional income based on the cadastral value of the property, on which a percentage is applied. If you are resident in Spain, you will be taxed under Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF), which applies to the income generated, including profits obtained from renting the property or selling it.

Capital gains tax

If you decide to sell the property, you will be subject to Capital Gains Tax. This tax is levied on the profit made on the sale of the property, i.e. the difference between the purchase price and the sale price. The applicable rate varies between 19% and 26%, depending on the profit made. However, there are exemptions, such as reinvestment in another habitual residence for residents.

Refuse collection tax

This is a local tax that varies according to the municipality where the property is located. The payment corresponds to the management and collection of domestic waste and can be quarterly or annual. The amount of this tax depends on the size and characteristics of the property, as well as the regulations of each locality.

Taxes on water, electricity and sewerage supply

Supplies of basic services such as water, electricity and sewerage are subject to additional taxes and charges. Indirect taxes, such as VAT, are added to the monthly electricity and water bills, while sewerage is usually integrated in the water bill. These costs also depend on consumption and the contracted tariff.

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Funded by the European Union – Next Generation EU. However, the views and opinions expressed are solely those of the author(s) and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the European Commission can be held responsible for them. European Union NextGenerationEU

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