Costs of buying property in Spain

When buying property in Spain, you should take into account the additional fees involved. You should add approximately 13% of the property’s value to the purchase price, which is the standard cost of buying property in this country. This is an important factor that often surprises new investors, so it is worth carefully considering your total budget.

When buying a property, the idea of a mortgage often comes to mind. In Spain, banks usually lend up to 70% of the property value to married couples who plan to live in it. This means that you must have at least 30% of the value of the house as a down payment.

In Spain, apart from the loan, there are other fees and taxes related to the purchase of real estate. To ensure that everything is legal and that you can become the full owner, you must cover costs such as property valuation, notary fees, registry entries, and other taxes.

As we mentioned at the beginning of this guide, as a real estate agency, we recommend allocating approximately 13% of the property value to these additional expenses – Even if you don’t need a loan, these additional fees are unavoidable. This is a standard cost of buying a home in this country. It is an important factor that often surprises new investors, so it is worth carefully considering your total budget.

The amount you ultimately pay depends on many factors, such as whether you are buying a new or used home, where it is located, and how much it costs. Here is a brief summary of the costs in table form.

Basic costs – When purchasing real estate, it is essential to thoroughly understand all the fees that may arise. Each of these costs is an integral part of the purchase process and must be included in the budget.

It is worth considering additional costs, such as property insurance and life insurance, which are often required by banks when granting a loan. Insurance premiums may vary depending on the value of the property and individual conditions, which should be taken into account when planning long-term expenses.

*Required in the case of partial financing of the purchase of real estate through a mortgage loan. 

Spanish VAT (IVA)

In 2024, when deciding to purchase a property on the primary market in Spain, you should take into account the mandatory cost of Spanish VAT (IVA), which amounts to 10% of the property value. This is a significant part of the purchase cost, which directly affects the total amount of the investment. VAT is a consumption tax and, as such, the buyer must pay it when purchasing a new apartment or house in Spain from a developer.

Local tax / AJD tax (Polish PCC)

Depending on the location of the property in Spain, the buyer is also required to pay a local transaction tax, which is comparable to the Polish tax on civil law transactions (PCC). In Andalusia (Costa del Sol), the rate of this tax is 1.2%, while on the Costa Blanca coast in the Valencian Community, popular among investors, the tax is 1.5%. This is a one-time cost that must be paid during the purchase process.

AJD and IVA tax table for Autonomous Communities in Spain. Valid for 2024.

Notary fee

The costs associated with notary services in Spain, which are necessary to register a purchase and sale transaction, range from 0.2% to 0.5% of the transaction value. Notaries in Spain play a key role in the purchase process, ensuring the legality of documents and the security of the legal transaction.

Mortgage origination fee

When deciding to finance the purchase of real estate with a mortgage, you should take into account the mortgage origination fee, which amounts to 1.5% of the loan amount. This is a one-time fee charged by the bank for initiating the financing.

Commission for a bank check

When paying for real estate by bank check, banks may charge a commission of 0.4% of the check value, up to a maximum of €300. This is a cost associated with security and payment guarantees.

Entry in the land and mortgage register

The cost of registering the property in the land registry, which is necessary for final confirmation of ownership rights, is approximately €500 in Spain. This is the final step in the purchase process and legalizes the buyer as the new owner.

Tax on civil law transactions

When taking out a mortgage, the buyer is required to pay a civil law transaction tax, which amounts to 1.5% of the loan value. This is an additional cost associated with the loan formalities.

Property valuation

Before granting a mortgage, banks require a professional property valuation, which costs between €250 and €600. This is necessary to determine the value of the property and the maximum loan amount.

Property and life insurance

Purchasing real estate with a mortgage also requires taking out property insurance and life insurance. The cost of property insurance ranges from €200 to €300 per year, while life insurance depends on many individual factors, such as age, health, and loan amount.