How to Estimate Costs Related to the purchase of your dream property in Spain?
There is not a very big difference between Spain and other countries when it comes to buying a property. There are many other associated costs apart from the property purchase price, these include: legal and administration expenses, notary fees, stamp duty, registry fees, bank fees, VAT, Transfer Tax and more.
In this article you will learn the general information about costs related to buying a property in Spain. However we do strongly recommend you also obtain advice from your own lawyer and financial advisor in relation to your own personal situation.
Transfer Tax – On Resale Property
(Calculations based on property value range and applicable rate)
- For property below and up to €400,000, you will pay 8% Transfer Tax.
- Between €400,000 and €700,000, your Transfer Tax will be 9%.
- From €700,000 and over, you will need to pay 10% Transfer Tax.
- If you are buying an additional parking space, Transfer Tax will be 8% up to €30,000, 9% for prices between €30,000 and €50,000, and 10% for prices over €50,000.
- If you are fiscally resident and under 35 years old, the Transfer Tax can be reduced up to 3.5% if the value of the property remains under €130,000.
- For disabled people who are fiscally resident, the Transfer Tax can be reduced to 3.5% up to a maximum property value of €180,000.
- For real estate professionals and companies, the Transfer Tax is 2%.
Taxes on New-Build Properties
- If you are buying a newly built property directly from a developer, you will pay VAT (instead of Transfer Tax) at a rate of 10%. In addition you will be required to pay stamp duty at 1.5%.
- For buyers younger than 35 and disabled people, who are fiscally resident, the stamp duty is reduced to 0.3%.
- For parking spaces (acquired separately from the property), VAT is 21% and stamp duty 1.5%.
Total Property Buying Costs in Spain
To present you with an example, let's say you buy a property for €250,000.
New-Build property purchase costs: 14.2%
(These include: VAT/IVA at 10%, stamp duty at 1.5%, legal fees 1%, notary and registry fees 1%, plus 0.7% for various documents required such as power of attorney, NIE application and certificates.)
With new mortgage: 16.7%
(These include, in addition to the previously mentioned 14.2%, 0.8% notary fees, 0.7% for bank gestor, valuation and provision of funds, and 1% opening fee.)
Please note that the mortgage will require a separate deed but, in accordance with the new regulation, the bank will bear the cost of the tax from now on.
Resale Property purchase costs: 10.7%
(These include: 8% for Transfer Tax, 1% for legal fees, 1% for notary fees and 0.7% for various documents such as power of attorney, NIE application and certificates.)
With new mortgage (60% of €250,000 or the amount of €150,000): 13.2%
(These include: 10.7% as above plus 0.8% notary fees, 0.7% for bank gestor, valuation and provision of funds, and 1% opening fee.)