Editorial transparency and use of artificial intelligence
This article forms part of the CostaLuz Lawyers blog and is published for general informational and educational purposes only. It was prepared with the assistance of artificial intelligence tools and, before publication, was substantively reviewed and editorially approved by Maria de Castro, a Spanish-qualified lawyer registered with the Cádiz Bar Association under number 2745, founder of CostaLuz Lawyers and the person responsible for the editorial review of the published content.
This article does not constitute legal, tax, immigration, employment, estate-planning or investment advice and does not replace an individual assessment and the professional work of the appropriate CostaLuz Lawyers specialist. No action or omission should be based solely on this information.
Many buyers are surprised by community fees, annual property tax (IBI), and non-resident income tax obligations.
The True Cost of Buying Property in Spain
Estate agents in Spain frequently quote the purchase price without fully disclosing the additional costs involved. Under Spanish law, the buyer bears the majority of transaction costs — a significant difference from some other European systems. Here is every cost you need to budget for.
Cost allocation under Spanish law: Article 1455 of the Spanish Civil Code establishes that the costs of granting the public deed (escritura) are borne by the seller, and those of the first and subsequent copies by the buyer, unless otherwise agreed. Other costs (plusvalia tax, estate agent fees, etc.) depend on the applicable law and the specific agreement between the parties.
Transaction Costs (One-Off)
| Cost Item | Resale Property | New Build | Notes |
|---|---|---|---|
| Transfer Tax (ITP) | 7% (Andalucía) | N/A | Varies by region: 6-11% |
| VAT (IVA) | N/A | 10% | Applies to new-build properties |
| Stamp Duty (AJD) | N/A | 1.2% (Andalucía) | New builds only, in addition to VAT |
| Notary fees | €600-€1,200 | €600-€1,200 | Based on property value |
| Land Registry | €400-€800 | €400-€800 | Based on property value |
| Legal fees | Fixed fee (agreed in writing) | Fixed fee (agreed in writing) | Independent lawyer — essential |
| NIE application | €12-€150 | €12-€150 | Government fee + lawyer if using representation |
| Mortgage costs | €1,000-€3,000 | €1,000-€3,000 | Valuation, arrangement fee (if applicable) |
| Gestoría fees | €300-€600 | €300-€600 | Optional: tax filings, utility transfers |
Worked Example: €250,000 Resale Property in Andalucía
| Item | Amount |
|---|---|
| Purchase price | €250,000 |
| Transfer Tax (7%) | €17,500 |
| Notary fees | €900 |
| Land Registry | €600 |
| Legal fees | fixed fee, quoted separately |
| NIE + gestoría | €500 |
| TOTAL COST | €269,500 + fixed legal fee |
| Additional costs as % of price | 7.8% + legal fee |
Ongoing Annual Costs (Often Overlooked)
- IBI (Impuesto sobre Bienes Inmuebles): Annual property tax, typically €300-€1,500 depending on the catastral value and municipality
- Basura (rubbish collection): €50-€200 per year
- Community fees: €30-€300+ per month for urbanisations with shared pools, gardens, or lifts
- Non-resident income tax (Modelo 210): Annual deemed rental income tax of approximately €300-€800, even if the property is not rented
- Wealth tax: Applicable if your net Spanish assets exceed €700,000
- Home insurance: €200-€600 per year (essential, not legally mandatory for unleveraged purchases)
- Utility standing charges: Electricity, water, and gas have fixed monthly charges even with zero consumption
Costs That Agents Often Do Not Mention
From our experience handling hundreds of property purchases, these are the costs that most frequently surprise buyers:
- Plusvalía municipal: A local capital gains tax payable on sale — technically the seller’s cost, but sometimes negotiated onto the buyer
- Community fee arrears: Outstanding community fees transfer to the new owner under Spanish law. Always verify the community is up to date before completing
- Utility connection fees: If a property has been vacant, reconnecting electricity and water can cost €200-€500
- Habitation certificate (cédula de habitabilidad): Some regions require this to connect utilities, costing €50-€150 to obtain
- Energy Performance Certificate (EPC): Required by law for all sales, usually the seller’s cost but sometimes negotiated
Frequently Asked Questions
What percentage should I budget on top of the purchase price?
For a resale property in Andalucía, budget 10-11% on top of the purchase price. For a new build, budget 12-13% due to the combination of VAT and stamp duty.
Are there any costs the seller pays?
Under Spanish law, the seller typically pays the plusvalía municipal tax, the estate agent’s commission, and any outstanding community fees. The allocation of transaction costs depends on the applicable law and the agreement between the parties (see Art. 1455 of the Spanish Civil Code below).
Do I pay tax even if I don’t rent out my Spanish property?
Yes. Non-residents must file an annual Modelo 210 declaring deemed rental income based on the catastral value, even if the property stands empty. The tax is approximately 1.1% of the catastral value, taxed at 19% for all non-residents.
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For a complete overview of property law and conveyancing in Spain, see our Buying Property in Spain Complete Legal Guide 2026.
Disclaimer: This information is provided for general guidance purposes only and does not constitute personalised tax or legal advice. Each case must be assessed individually according to the client’s specific circumstances. It is essential to consult a qualified specialist before taking any action or making any decision.
Legal Notice: The content on this page is provided for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. No action should be taken based solely on this content without first seeking independent professional legal counsel. Each case requires individual assessment based on its specific circumstances. CostaLuz Lawyers accepts no liability for actions taken or not taken based on this content.
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