Are you planning to buy a property in Spain? In addition to the purchase price, there are several taxes and fees to factor into your budget. The experts at Terreta Spain break it down for you.
The ITP
This is the tax most familiar to buyers:the Impuesto sobre las Transmisiones Patrimoniales (Property Transfer Tax). Here’s what you need to know:
- This is a one-time tax that applies to all pre-owned properties purchased.
- The ITP is a regional tax: its rate varies by autonomous community, ranging from 6% to 13%.
- It must be paid within 30 days of signing the deed of sale at the notary’s office.
- When purchasing a property with a mortgage, the bank typically handles this process. Without a mortgage, it is up to the buyer to take care of it, often through an administrative agency.
Find out about any available discounts: some regions have specific regulations for first-time homebuyers or large families. To maximize rental returns, target communities with low property tax rates—Madrid is an excellent choice, with a 6% tax rate, steady demand, and very low vacancy rates.
IVA and AJD
IVA is the Spanish equivalent of VAT (Impuesto sobre el Valor Añadido). It applies to newly constructed properties and amounts to 10% of the purchase price for a residence. Conversely, IVA does not apply to pre-owned properties: in such cases, only the ITP is due.
In addition to the VAT payment, there isthe AJD (Documented Legal Transactions Tax), a marginal fee ranging from 1% to 1.5% depending on the autonomous community.
When purchasing land or commercial property, the VAT rate rises to 21%.
Notary fees
In Spain, notary fees are capped: the notary certifies the legality of the transaction and officially records the transfer of ownership. These fees generally range from €500 to €2,000 depending on the property’s value, and are payable on the day of signing.
The division of costs between the buyer and seller varies by city. In Valence, it is common for the buyer to cover only one-third of the costs. In other cities, the buyer may be responsible for 100% of the costs—a point to be negotiated in the preliminary sales agreement.
Administrative fees (gestoria)
It is common to hire a gestoria, a specialized agency that handles administrative procedures: payment of the ITP, registration in the property registry, and sometimes payment of notary fees. Expect to pay between €200 and €400. If you’re buying with a mortgage, the bank will handle these procedures directly.
Lawyer's fees
Hiring a lawyer specializing in Spanish real estate law is not mandatory but strongly recommended—unless you’re working with Terreta Spain. When Terreta Spain assists you with your real estate purchase, this legal aspect is fully integrated into our service. We oversee all due diligence and work with trusted professionals, allowing our clients to secure their purchase without having to manage an additional lawyer themselves.
Bank charges
If you’re taking out a loan, be sure to:
- Between €350 and €500 for the appraisal (a mandatory property valuation required by the bank), to be paid in advance of the purchase.
- Between 0.5% and 1% of the loan amount for bank fees.
In Spain, banks typically finance between 70% and 80% of the property’s purchase price. The down payment (20–30%) and related fees must be transferred to a Spanish bank account before signing the contract at the notary’s office.
Estimated total of additional costs
It is estimated that the total costs associated with buying a property in Spain amount to between 10% and 15% of the property’s price.
Simulator: Estimate your purchase budget
FAQ — Frequently Asked Questions
Sources: Idealista, Terreta Spain
