Chapter

Costs of buying property in Spain

§ 1What you pay besides the price

A purchase has four layers of cost. The first is the tax on the transaction, which is the largest. The second is the fees of the professionals who handle it: the notary, the registry, a lawyer and often a gestor who files the paperwork. The third is the set-up cost of the home, such as furniture, connections and any works. The fourth is the reserve for what nobody listed. A budget that has all four rarely produces a surprise.

The sections below take them in order. The notes linked from each go further, and the transfer tax has a chapter of its own, the transfer tax on resale homes, with the rate for each region we have verified.

§ 2Layer one: the tax

For a resale home the tax is the regional transfer tax. For a new home bought from the developer it is VAT, at 10%, plus stamp duty on the notarial deed at a rate set by the region. Which applies depends on the type of home, as the tax agency explains, and the taxes on a purchase sets the pieces side by side.

The regional rate is the heart of the budget. As examples, the general rate is 6% in Madrid and 9% in the Valencian Community, while Catalonia uses a scale of 10% to 13%. The tax base is the higher of the official reference value and the price, so ask for the reference value early.

The taxes on a new home, VAT and stamp duty on the deed, have a chapter of their own: VAT and stamp duty on new homes.

§ 3Layer two: the professionals

The notary checks identities, capacity, ownership and charges, drafts the deed and can file it with the registry. Notaries prefer payment by bank transfer, which the deed records. Registration makes you the recognised owner against the seller's creditors, and it has its own fee. A lawyer who acts only for you is the cost most often skipped and most often regretted.

We do not print the scale of the notary and registry fees, because we have not verified the regulation behind them. Ask each professional for a written quote that lists what it covers, and compare. For the stamp duty on the deed, stamp duty explained explains the tax and gives the rates we have verified.

§ 4Layers three and four: set-up and reserve

A home rarely arrives ready. Furniture, connections to electricity, water and internet, cleaning and small repairs add up, and a resale may need larger works. Hidden costs lists the items that surprise buyers, from translations to bank charges. Keep a reserve you choose in advance, and treat it as part of the price.

§ 5Turning it into a budget

Write the price, then the tax from the rate in your region, then the quotes, then the set-up estimate, then the reserve. Check the total against what you can pay without a stretch. Costs as a percentage of the price explains why a single percentage misleads and how to read the figures you will see online.

For a concrete picture, the page of worked examples applies verified rates to illustrative prices and states every assumption. The examples are labelled illustrative, because your figures will differ.

§ 6Deadlines and timing

The tax is paid after signing. The registrars' guide gives 30 working days as the usual deadline, which varies by region, and registration waits for it. Hold the cash aside from the start, and let your lawyer or gestor tell you the exact deadline for your region. For the wider context, see taxes and costs, which places this chapter among the others in the section.

§ 7A last check on the budget

Before you reserve, read the budget as a stranger would. Does every line have a source, either a rate from an official page or a written quote? Is there a reserve? Does the total still work if the tax base turns out higher than the price? A budget that survives those three questions is ready to be used. One that does not has a hole where the next surprise will land, and it is cheaper to find the hole now.

§ 8Other taxes and costs that follow a purchase

The tax a seller pays on the rise in land value is described in plusvalía, the municipal tax on land value, and the fees of the professionals who work on the deed are explained in the notary, registry and lawyer fees.

Once the purchase is complete, the bills that come every year are described in the yearly taxes after the purchase.

§ 9A note on the budget

Write the budget as a table with one row for each layer and one column for the date the money is needed. The tax and the deed fall on the same few weeks, while the fees may fall earlier or later, and the yearly costs begin the month after the keys. Seeing the dates beside the amounts shows when cash is tight and lets you plan the transfers.

§ 10Taxes for non-residents, sellers and heirs

The yearly taxes of an owner who lives abroad are described in the chapter on non-resident taxes, and the tax on the profit of a sale is described in the chapter on capital gains tax on a sale.

The tax on inheritances and gifts is described in the chapter on inheritance and gift tax.

Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.