When buying property in Spain, it’s vital to understand the true cost of the transaction — including all property taxes, legal fees, and purchase costs.
This guide breaks it all down, so you can budget confidently and avoid surprises.
🏠 Taxes When Buying Property in Spain
There are two primary categories of taxes:
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Transfer taxes (for resale properties)
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VAT & stamp duty (for new builds)
🏘️ 1. Transfer Tax (ITP – Impuesto de Transmisiones Patrimoniales)
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Applies to resale properties
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Paid by the buyer
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Rates vary by region:
| Region | ITP Rate |
|---|---|
| Andalusia | 7% flat |
| Valencia | 10% |
| Madrid | 6% or 7% |
| Catalonia | 10% (general) |
| Balearics | 8–13% (tiered) |
💡 Tip: Your lawyer can sometimes reduce ITP using special buyer categories (e.g. large families, disabled buyers).
🏗️ 2. VAT (IVA) & Stamp Duty (AJD)
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Applies to new properties or off-plan purchases
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VAT is 10% (residential), 21% (commercial)
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AJD (Actos Jurídicos Documentados) is 1%–1.5%, depending on region
| Property Type | Tax Type | Rate |
|---|---|---|
| New apartment | VAT | 10% |
| New home + land | AJD | 1–1.5% |
| New office/commercial | VAT | 21% |
🧾 VAT and AJD are paid on top of the purchase price and go to the tax authority (Agencia Tributaria).
🏛️ Notary & Land Registry Fees
When you finalize the purchase, two key administrative fees apply:
✍️ Notary Fees
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Calculated based on property value and pages of the deed
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Typical range: €600 – €1,200
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Covers the signing of the Escritura Pública
📘 Land Registry Fees
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Paid to record the new owner
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Usually €400 – €800, depending on value and complexity
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Must be completed for your title to be legally valid
📌 Your lawyer handles both payments and submits the documents on your behalf.
💰 Other Buyer Costs to Consider
| Expense | Estimated Amount |
|---|---|
| Legal Fees | €1,500 – €3,000 (fixed or % of price) |
| Gestoría (Admin service) | €300 – €500 |
| Bank Fees (cheque or transfer) | €200 – €400 |
| NIE Number | €100 – €300 |
| Mortgage Fees (if applicable) | 1–2% of loan amount |
🧮 Example: Total Costs for a €250,000 Resale Property in Valencia
| Item | Amount (€) |
|---|---|
| Purchase Price | €250,000 |
| ITP (10%) | €25,000 |
| Notary + Registry Fees | €1,500 |
| Lawyer’s Fee | €2,000 |
| NIE + Gestoría + Bank | €1,000 |
| Total | €279,500 |
✅ You should budget 10%–15% extra on top of the purchase price.
🧾 Annual Property Taxes After Purchase
Once you own the property, these ongoing taxes apply:
🧱 1. IBI (Impuesto sobre Bienes Inmuebles)
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Annual local property tax
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Based on cadastral value
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Typical range: €200 – €2,000/year
💨 2. Basura (Waste Collection Tax)
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Local garbage fee
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€100 – €300/year
🌍 3. Non-Resident Income Tax (Impuesto sobre la Renta de No Residentes)
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Applies even if you don’t rent the property
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Taxed on “deemed income” (1.1%–2% of cadastral value x 19–24%)
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EU citizens: 19%
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Non-EU citizens: 24%
💡 If you rent out your home, you must declare the rental income and may deduct expenses (for EU/EEA residents).
💵 Plusvalía Tax (Paid by Seller — But Check!)
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Municipal tax on increase in land value
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Technically paid by seller
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Some sellers try to shift this to foreign buyers
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Your lawyer must verify it in the Contrato de Arras
🧑💼 Why Work With a Real Estate Lawyer?
Foreign buyers are most at risk of:
❌ Overpaying on transfer tax
❌ Getting hit with surprise Plusvalía charges
❌ Missing deadlines for tax declarations
❌ Not registering the title properly
At Borderless Lawyers, we:
✅ Calculate all tax scenarios before you sign
✅ Handle payments and file declarations
✅ Register your property with the Tax Agency and Land Registry
✅ Act under Power of Attorney for remote buyers
📞 Ready to Budget Your Spanish Property Purchase?
Let us provide a full breakdown of costs for your region, property type, and buyer profile.