Property Taxes and Costs When Buying in Spain: Complete Breakdown

Property Taxes and Costs When Buying in Spain: Complete Breakdown

Understanding the full cost of buying property in Spain is essential for budgeting your purchase accurately. Beyond the property price, buyers should budget for approximately 10-13% in additional purchase costs, plus ongoing annual taxes and charges. Many of these costs are due on the day you sign at the notary, so they need to be ready as cash on top of your deposit and any mortgage. Mortgage lenders in Spain will not finance them.

Purchase Taxes

The main tax payable when purchasing property in Spain depends on whether the property is new-build or resale.

For resale properties in Andalusia, the Transfer Tax (Impuesto de Transmisiones Patrimoniales, or ITP) applies. The rate in Andalusia is 7% of the declared purchase price. This is one of the lowest rates in Spain and represents a significant cost saving compared to regions like Catalonia or the Balearic Islands. ITP is paid by the buyer, usually by your lawyer on your behalf, using form 600 at the Andalusian tax office (Agencia Tributaria de Andalucía) shortly after completion. The tax office can compare your declared price with its own reference value for the property, so always declare the real price. If you declare less, you may later receive a supplementary tax bill with interest and possible penalties.

ITP in 2027 and beyond: In September 2026 the Junta de Andalucía announced plans to cut the general ITP rate from 7% to 6.75% in 2027. It then aims to lower the rate by a further 0.25 percentage points each year, reaching 6% by the end of the current legislature. On a 1,000,000 euro resale property, the 2027 cut alone would save 2,500 euros, rising to 5,000 euros in 2028 if the rate falls to 6.5% as planned. The measure is part of the 2027 regional budget, which still needs approval from the Andalusian Parliament. ITP is charged at the rate in force on the date you sign the escritura, not when you reserve the property or sign the private purchase contract. Until each change is approved, buyers should keep budgeting at 7%. Read our full guide to the Andalucía ITP cut.

For new-build properties purchased directly from a developer, VAT (IVA) of 10% applies instead of transfer tax, plus Stamp Duty (Actos Juridicos Documentados, or AJD) of 1.2% in Andalusia. This means new-build properties carry a slightly higher tax burden of 11.2% compared to 7% for resale. If you buy off-plan, VAT is paid in stages, added to each instalment you pay the developer during construction, while AJD is paid once the deeds are signed. A parking space or storage room bought together with the home also pays 10% VAT. Bought separately, it is taxed at 21%. The planned ITP reduction does not apply to new-build purchases from a developer.

Professional Fees

Notary fees in Spain are regulated and typically range from 0.5% to 1% of the purchase price. These cover the notarisation of the title deed (escritura publica), which is a legal requirement for all property transactions in Spain. Because notary fees follow an official scale that rises more slowly than the property price, they are often below 0.5% on higher-value homes.

Property Registry fees for registering your ownership typically amount to approximately 0.5% to 1% of the purchase price. Registration is not legally mandatory but is strongly recommended to protect your ownership rights. The Land Registry (Registro de la Propiedad) is the official record that protects you against third-party claims, and any bank lending on the property will require it.

Legal fees for your independent lawyer will typically be 1% to 1.5% of the purchase price, with a minimum fee usually applying for lower-value properties. This covers due diligence, contract review, and representation at completion. On the Costa del Sol, due diligence should include checking that the property has the correct building and occupation licences, that any extensions or pools are registered, and that there are no outstanding debts, mortgages or community charges attached to the property. Always choose a lawyer who is independent of the seller and the developer.

Other costs to plan for:

• NIE number: every buyer needs a Spanish foreigner identification number (NIE) before completion, so apply early, as appointments can take several weeks.
• Mortgage costs: since 2019 the bank pays most of the costs of setting up a mortgage, including stamp duty and notary fees on the mortgage deed. The buyer usually still pays for the property valuation (tasación), typically 300 to 700 euros. Non-resident buyers can generally borrow 60-70% of the property’s value.
• Buying from a non-resident seller: the buyer must withhold 3% of the purchase price and pay it to the Spanish tax office as a deposit against the seller’s capital gains tax. This comes out of the price rather than being an extra cost, and your lawyer will handle it.
• Plusvalía municipal: this local tax on the increase in land value is normally paid by the seller, but your contract should say so clearly.

Ongoing Annual Costs

Once you own property in Spain, several annual taxes and charges apply. IBI (Impuesto sobre Bienes Inmuebles) is the annual property tax, similar to council tax, and is based on the catastral (rateable) value of the property. Rates vary by municipality but typically range from 0.4% to 1.1% of the catastral value. The catastral value is usually well below the market value. Before buying, ask the seller for the latest IBI receipt so you know the exact annual cost.

Basura is the annual waste collection charge, which varies by municipality but is typically between 100 and 400 euros per year.

For non-residents who do not rent out their property, an imputed income tax (Impuesto sobre la Renta de No Residentes) applies at 19% for EU residents or 24% for non-EU residents, calculated on 1.1% of the catastral value. This is a relatively modest annual charge but must be declared. The 1.1% figure applies where the catastral value has been revised in the last ten years. Otherwise, 2% is used. If you rent the property out, you pay tax on the actual rental income instead.

Community fees (gastos de comunidad) apply to properties within a community of owners, covering maintenance of shared areas, gardens, pools, security, and building insurance. These can range from 100 euros per month for a simple apartment complex to several thousand euros per month for luxury developments with extensive amenities. Before buying, ask to see the community’s recent accounts and meeting minutes, as these will show any planned works or special charges (derramas) that could affect you after you buy.

Other running costs include utilities, home insurance, and maintenance of gardens and pools. Owners of high-value property should also ask a tax adviser about Wealth Tax and the Solidarity Tax on Large Fortunes, which can apply to non-residents in particular.

Summary of Costs

For a property purchased at 1,000,000 euros (resale), typical total purchase costs would be approximately: Transfer Tax (7%): 70,000 euros; Notary fees: 5,000-8,000 euros; Registry fees: 5,000-8,000 euros; Legal fees: 10,000-15,000 euros. Total additional costs: approximately 90,000-101,000 euros, or roughly 9-10% of the purchase price. If the planned ITP cut to 6.75% is approved, the same purchase completed in 2027 would have 67,500 euros in Transfer Tax, bringing total additional costs to approximately 87,500-98,500 euros. At the planned 2028 rate of 6.5%, the total would fall to approximately 85,000-96,000 euros. For a new-build at the same price, VAT and AJD alone would come to 112,000 euros, so total costs would be closer to 13%.

Proper financial planning at the outset ensures there are no surprises and allows you to focus on enjoying your new property in Spain. The figures in this guide are general and not tax or legal advice. Always confirm the exact costs for your purchase with an independent lawyer or tax adviser.