Buying Costs & Taxes in Spain

The largest single cost when buying property in Spain is the purchase tax, and the amount you pay depends entirely on whether you are buying a resale property or a new build. Many buyers assume new builds are the cheaper option — but when it comes to taxes, the opposite is often true.

Resale Properties: ITP (Impuesto de Transmisiones Patrimoniales)

When you buy a resale (second-hand) property, you pay ITP — the Transfer Tax. This is a regional tax, so the rate varies depending on which autonomous community the property sits in. For the most popular UK buyer destinations:

• Andalucía (Costa del Sol, including Marbella, Estepona, Fuengirola): 7%
• Valencia (Costa Blanca): 10%
• Catalonia (Costa Brava, Barcelona): 10%
• Balearic Islands (Mallorca, Ibiza): 8–13% (progressive scale)
• Canary Islands: 6.5%
• Murcia: 8%

The ITP is paid to the regional tax office within 30 days of completion. Your lawyer handles this on your behalf.

New-Build Properties: IVA + AJD

Buying directly from a developer (a brand-new property that has never been lived in) triggers a different tax regime. Instead of ITP, you pay two separate taxes:

• IVA (Impuesto sobre el Valor Añadido) — Spanish VAT, charged at 10% nationwide (7% in the Canary Islands, where it is called IGIC)
• AJD (Actos Jurídicos Documentados) — Stamp Duty, which varies by region. In Andalucía it is 1.2%, though other regions charge 0.5–1.5%

Resale vs New Build: Tax Comparison

Cost Item	Resale (Andalucía)	New Build (Andalucía)
Purchase Tax	ITP: 7%	IVA: 10%
Stamp Duty (AJD)	Included in ITP	AJD: 1.2%
Total Tax	7%	11.2%
Tax on €300,000 property	€21,000	€33,600

As the table shows, a new-build property in Andalucía carries 4.2 percentage points more tax than an equivalent resale. On a €300,000 purchase, that is an extra €12,600. New builds may offer modern specifications and developer guarantees, but the tax premium is something every buyer should factor in from the start.

In Spain, the notary (notario) is a public official appointed by the state — not a private solicitor working for either party. The notary’s role is to verify the identities of the buyer and seller, ensure the transaction complies with Spanish law, read the deed aloud, and oversee the signing of the escritura pública (public deed of sale).

Notary fees are regulated by the Spanish government, meaning they follow a fixed sliding scale based on the property value. They are not negotiable. For most residential property purchases, notary fees fall in the range of 0.1–0.5% of the purchase price, with the percentage decreasing as the property value increases.

As a practical guide:

• €200,000 property: approximately €400–€700
• €300,000 property: approximately €600–€1,000
• €500,000 property: approximately €800–€1,200
• €1,000,000 property: approximately €1,000–€1,500

Technically, both buyer and seller are liable for a share of the notary costs, but in practice the buyer pays the majority (typically the original deed, while the seller pays for any copies they request). Your lawyer will settle this at completion.

You do not choose the notary — either party can suggest one, but the buyer traditionally has the right to select. Your buying process will include the notary appointment as one of the final steps.

After signing at the notary, the next critical step is registering your ownership at the Registro de la Propiedad (Land Registry). This is what makes your ownership legally watertight and publicly recorded. Without registration, your title is not fully protected against third-party claims.

Land Registry fees are also government-regulated and based on the purchase price. They typically amount to 0.1–0.3% of the property value:

• €200,000 property: approximately €300–€500
• €300,000 property: approximately €400–€700
• €500,000 property: approximately €500–€900

Your lawyer handles the entire registration process. They submit the signed deed to the Land Registry, pay the fees, and follow up until the registration is complete. The full process typically takes 1–3 months, though you receive a provisional entry (asiento de presentación) much sooner, which protects your rights during the processing period.

Never skip this step. While the notarised deed proves your purchase, only the Land Registry entry provides full legal protection against claims, liens, or disputes. Any reputable lawyer will handle this as standard — if yours does not, that is a red flag. See our buying process guide for more on what your lawyer should be doing at each stage.

An independent, English-speaking Spanish property lawyer is the most important professional you will hire during your purchase. Unlike in England and Wales, where conveyancing is a well-trodden path with standardised searches, Spanish property law has complexities that can catch UK buyers badly — from undeclared building works to unpaid community debts that transfer with the property.

Legal fees are not regulated (unlike notary and registry fees), but the standard market rate is approximately 1% of the purchase price plus 21% IVA (Spanish VAT on professional services).

Worked example for a €300,000 property:

• Legal fee: €3,000 (1%)
• IVA on legal fee: €630 (21%)
• Total: €3,630

For this fee, your lawyer should handle:

• Due diligence — checking the property has no debts, liens, or legal issues at the Land Registry and local town hall
• Contract review — reviewing and negotiating the reservation agreement and contrato de arras
• NIE application — assisting with or arranging your NIE number
• Notary attendance — attending the signing on your behalf or alongside you
• Land Registry filing — submitting the deed for registration and following up
• Tax filings — paying purchase taxes on your behalf
• Utility transfers — switching electricity, water, and gas into your name

Never buy property in Spain without an independent lawyer. Do not use the seller’s lawyer, the estate agent’s recommended lawyer (unless you have independently verified them), or attempt to handle the legal work yourself. The €3,000–€5,000 you spend on legal fees is, without exaggeration, the best money you will spend in the entire process. It protects a purchase worth tens or hundreds of thousands.

If you are financing your purchase with a Spanish mortgage, there are additional costs to factor in. The good news is that a 2019 legal reform shifted several mortgage-related costs from the buyer to the bank — but some expenses still fall on you.

Costs Paid by the Buyer

• Valuation fee (tasación): The bank requires an independent property valuation by an approved surveyor. Cost: €300–€500 depending on the property value and location.
• Bank arrangement fee (comisión de apertura): Not all banks charge this, but when they do it is typically 0.5–1% of the mortgage amount. On a €200,000 mortgage, that is €1,000–€2,000. Some banks waive this to win your business — always negotiate.
• Life insurance: Many Spanish banks require (or strongly incentivise) you to take out life insurance linked to the mortgage. Annual cost varies significantly based on your age and the mortgage amount.

Costs Paid by the Bank (Since 2019)

• Mortgage deed tax (AJD) — previously paid by the buyer, now paid by the bank
• Notary fees for the mortgage deed — paid by the bank
• Land Registry fees for the mortgage — paid by the bank
• Valuation copy (for the bank’s records) — paid by the bank

This 2019 reform was a significant win for buyers and reduced mortgage-related costs by several thousand euros. For a full guide to getting a Spanish mortgage as a UK buyer, including which banks lend to non-residents and current interest rates, see our dedicated Spanish mortgages guide.

Theory is useful, but real numbers are better. Here are three complete worked examples covering the most common scenarios for UK buyers on the Costa del Sol. All figures assume Andalucía tax rates. GBP conversions use an indicative rate of £1 = €1.18 (always check live rates with your currency provider).

Example 1: €200,000 Resale Apartment in Fuengirola

Cost Item	EUR	GBP (approx)
Purchase price	€200,000	£169,492
ITP (7%)	€14,000	£11,864
Notary fees	€600	£508
Land Registry	€400	£339
Legal fees (1% + IVA)	€2,420	£2,051
Miscellaneous (copies, certificates)	€500	£424
Total cost	€217,920	£184,678
Total buying costs above price	€17,920 (9.0%)	£15,186

Example 2: €400,000 New-Build Apartment in Estepona

Cost Item	EUR	GBP (approx)
Purchase price	€400,000	£338,983
IVA (10%)	€40,000	£33,898
AJD (1.2%)	€4,800	£4,068
Notary fees	€900	£763
Land Registry	€600	£508
Legal fees (1% + IVA)	€4,840	£4,102
Miscellaneous	€600	£508
Total cost	€451,740	£382,831
Total buying costs above price	€51,740 (12.9%)	£43,848

Example 3: €800,000 Resale Villa in Marbella

Cost Item	EUR	GBP (approx)
Purchase price	€800,000	£677,966
ITP (7%)	€56,000	£47,458
Notary fees	€1,200	£1,017
Land Registry	€800	£678
Legal fees (1% + IVA)	€9,680	£8,203
Miscellaneous	€800	£678
Total cost	€868,480	£736,000
Total buying costs above price	€68,480 (8.6%)	£58,034

Notice how the percentage decreases for higher-value properties — that is because notary, registry, and legal fees scale sub-linearly while the flat ITP percentage stays the same. New builds, however, remain the most expensive due to the IVA + AJD combination.

For an instant estimate tailored to your property, use our buying costs calculator.

Once you own the property, there are ongoing annual costs to budget for. These apply whether you live in the property full-time, use it as a holiday home, or rent it out.

IBI (Impuesto sobre Bienes Inmuebles)

The Spanish equivalent of council tax, IBI is a local municipal tax based on the valor catastral (cadastral value) of the property — which is typically well below the market value. Rates vary by municipality but expect to pay €400–€2,000 per year for a typical apartment or villa. Municipalities like Benahavís are known for having some of the lowest IBI rates on the Costa del Sol, which is one reason the area is popular with international buyers.

Basura (Refuse Collection Tax)

A separate annual charge for rubbish collection, typically €100–€300 per year. This is billed by the local town hall, sometimes included with the IBI bill, sometimes separately.

Community Fees (Gastos de Comunidad)

If you buy an apartment or a property within a gated community or urbanisation, you will pay monthly community fees. These cover shared costs: lifts, swimming pools, gardens, security, building insurance, and general maintenance. Expect to pay €40–€400 per month depending on the size and amenities of the development. Luxury developments with 24-hour security, multiple pools, and extensive gardens sit at the higher end.

Home Insurance (Seguro de Hogar)

Not legally required unless you have a mortgage (in which case the bank insists on it), but strongly recommended. A comprehensive home insurance policy covering building and contents typically costs €200–€600 per year for a standard apartment or villa.

Utilities

Monthly utility costs in southern Spain are generally reasonable:

• Electricity: €60–€150/month (higher if you rely on air conditioning in summer)
• Water: €30–€60/month
• Internet + mobile: €40–€70/month for a fibre broadband package

Budget approximately €150–€300 per month for all utilities combined. If the property sits empty for long periods, electricity and water will be minimal, but you still pay standing charges.

This is where many UK buyers get caught out. Owning property in Spain creates ongoing tax obligations even if you never set foot in the property and even if it generates no rental income. Post-Brexit, UK buyers are classified as non-EU residents, which means higher tax rates than EU citizens pay.

Imputed Income Tax (Modelo 210)

If your Spanish property sits empty (not rented out), the Spanish tax authorities assume you are deriving a benefit from it and charge an imputed income tax. This is filed annually using Modelo 210.

For non-EU residents (which now includes UK citizens post-Brexit), the calculation is:

• Take the valor catastral (cadastral value) from your IBI bill
• Multiply by 1.1% (or 2% if the cadastral value has not been revised since 1994)
• Tax that amount at 24%

Example: Property with a cadastral value of €150,000 → €150,000 × 1.1% = €1,650 → taxed at 24% = €396 per year.

Before Brexit, UK residents paid only 19% on this imputed income, the same rate as EU residents. The jump to 24% is one of the tangible financial consequences of Brexit for UK property owners in Spain.

Wealth Tax (Impuesto sobre el Patrimonio)

Spain levies a wealth tax on assets held in the country. Non-residents receive an exemption on the first €700,000 of Spanish assets. Above that threshold, rates range from 0.2% to 3.5% on a progressive scale. This only affects higher-value property owners, but if you are buying in Marbella’s Golden Mile or similar premium locations, it is worth factoring in. Some regions have historically offered rebates, but Andalucía currently applies the standard national rates.

Rental Income Tax

If you rent out your property, you must declare the income via Modelo 210 each quarter. As a non-EU resident (post-Brexit UK classification), you pay a flat rate of 24% on gross rental income. Crucially, unlike EU residents, you cannot deduct expenses such as mortgage interest, repairs, management fees, or community charges. EU residents pay only 19% and can deduct allowable expenses, making the effective tax rate for UK landlords significantly higher.

This is one of the most punitive post-Brexit changes for UK buyers who plan to rent their Spanish property. Always factor this into your rental yield calculations.

When you sell your Spanish property at a profit, Spain charges capital gains tax (CGT) on the gain. For non-residents, the rate is a flat 19% on the profit (sale price minus original purchase price, adjusted for buying and selling costs and any documented improvements).

The 3% Retention

When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the total sale price and pay it directly to the Spanish tax authority (Hacienda) as an advance payment against your CGT liability. If your actual tax bill is less than the 3% retained, you can apply for a refund — though this process can take 6–12 months.

Exemptions and Reliefs

• Over-65 exemption: If you are a Spanish tax resident aged 65 or over and the property is your primary residence, you are fully exempt from CGT. This does not apply to non-residents.
• Reinvestment relief: Spanish tax residents who reinvest the proceeds into a new primary residence within two years can defer or eliminate CGT. Again, this does not apply to non-residents.
• Inflation coefficient: Properties purchased before 1994 may benefit from reduction coefficients, though these have been largely phased out.

Double Taxation Treaty

The UK and Spain have a double taxation treaty to prevent you being taxed twice on the same gain. CGT paid in Spain can generally be offset against any UK CGT liability on the same disposal. You will need to declare the sale on your UK self-assessment tax return and claim relief for the Spanish tax already paid. Consult a cross-border tax adviser to ensure you structure this correctly.

You cannot avoid buying costs entirely — they are a fixed part of purchasing in Spain. But there are several practical ways to reduce the total amount you pay.

Use a Currency Specialist

This is the single biggest saving most UK buyers overlook. Transferring €300,000 through your high-street bank could cost you 2–4% in hidden exchange rate markups — that is €6,000–€12,000 lost to poor rates. A specialist currency broker offers significantly better rates and can lock in a forward contract to protect you against fluctuations while your purchase completes. On a €400,000 purchase, the saving is typically £4,000–£8,000 compared with a standard bank transfer.

Negotiate Agent Fees

In Spain, the seller usually pays the estate agent’s commission (typically 3–5% + IVA). However, in some cases buyers’ agents charge a fee. If you are working with a buyer’s agent, negotiate their fee upfront. If you are buying directly through a listing agent, the agent may be more flexible on price if they are earning commission from both sides of the transaction.

Get Multiple Lawyer Quotes

While 1% + IVA is the market standard, some lawyers charge less for higher-value properties or offer fixed-fee packages. Get at least two or three quotes, but never choose a lawyer solely on price — experience with UK buyer transactions and English-language capability matter far more than saving a few hundred euros.

Consider the Resale vs New-Build Tax Difference

As we covered earlier, resale properties carry 7% ITP in Andalucía versus 11.2% IVA + AJD for new builds. On a €400,000 property, that is a €16,800 difference. If you are torn between a resale and a new build at similar prices, the tax saving on the resale is worth considering — though it should not be the sole deciding factor.

Check IBI Rates by Municipality

IBI is a local tax, and rates vary significantly between municipalities. Benahavís, for example, has historically had some of the lowest IBI rates on the Costa del Sol, while neighbouring municipalities charge considerably more for equivalent-value properties. Over 10–20 years of ownership, the cumulative difference can be thousands of euros.

Time Your Currency Transfer

If you are not in a rush, monitoring GBP/EUR exchange rates and timing your transfer strategically can save significant money. A 2-cent movement on a €300,000 transfer equates to roughly £4,000. Setting up a rate alert with your currency broker costs nothing and could pay for your legal fees.

For a complete walkthrough of the buying process, including when each of these costs is due, see our step-by-step buying guide. And to calculate your specific costs instantly, try our buying costs calculator.