IF you’re planning to buy a property in Spain, your first thought has probably been the price of the property itself.
While that’s clearly a key part of your budget, it’s not the only cost to consider. In fact, there are several additional expenses involved in buying a home, some fixed, others variable, and they can significantly affect the final amount you’ll need to cough up.
Understanding all the associated costs is essential for planning your budget correctly.
Below, with the help of online portal ThinkSPAIN, we explain all the key costs.
How much money do I need to buy a property in Spain?
In general, it’s advisable to have savings of 30 to 32% of the total property price before buying.
For example, if the home you want to buy costs €150,000, you should aim to have between €45,000 and €48,000 available.
If you’re a ‘non-resident’, this may rise by another 10%, as explained below.
Why so much? Because most buyers finance their purchase with a mortgage, and Spanish banks usually finance up to 80% of the property’s value.
That means the buyer will need to cover the remaining 20%. And if you’re a non-resident, the bank may only finance up to 70%, hence you’ll need to stump up 30%.
Other additional costs include taxes, legal fees, notary costs, and more. These costs typically add up to another 10 to 12% of the property’s value. Let’s take a closer look at what they include:
Taxes when buying property in Spain
Taxes are the largest additional cost and each one depends on whether the property is new or second-hand:
• For new properties, you will pay VAT (Value Added Tax) which is 10% of the property’s value, and AJD (Stamp Duty), which varies by region from 0.5% to 1.5%.
• For resale properties, VAT does not apply. Instead, you’ll pay the ITP (Property Transfer Tax). This tax is set by the autonomous governments and ranges from 6% to 10%. In this case, AJD is usually not applied, except as a fixed fee.
There’s also the Plusvalía Municipal tax, which is calculated based on the increase in value of the land since it was last sold. This is typically paid by the seller, although it’s important to confirm this in the contract.
Notary fees
To make a property purchase official in Spain, the signing must take place in front of a notary.
The notary draws up and certifies the deed of sale (escritura pública). Although this cost is legally the seller’s responsibility, in practice, the buyer often pays the notary fees, especially if agreed in the deposit contract. It is also frequently shared.
It’s advisable to clarify this with the seller in advance.
Notary fees are regulated by law, meaning that prices are standard throughout Spain. The cost depends on the property price and typically ranges from €600 to €1,000.
Inscription in the Land Registry
After signing the deed, you must register the property in your name at the Land Registry (Registro de la Propiedad). This step is not compulsory, but it is strongly recommended.
If you’re applying for a mortgage, however, registration is mandatory.
The fee for this process is also regulated by law and varies depending on the property value. You can expect to pay between €300 and €600.
Mortgage-related costs
If you’re buying with a mortgage, you’ll need to account for a few additional expenses:
• Property valuation
Before granting a mortgage, the bank requires a valuation (tasación) to confirm the property’s market value.
This must be carried out by a Bank of Spain-authorised surveyor, and the cost is always paid by the buyer.
Valuation costs are not regulated, and can vary depending on the property’s location, size, and the documentation required.
As a guide, valuations generally range between €200 and €600.
• Mortgage fees
Some banks may charge a mortgage opening fee, typically between 0.5% to 1.5% of the loan amount. However, currently, many banks now offer zero-commission options.
Other mortgage-related costs, including the notary, administrative services, and stamp duty, must be paid by the bank. The buyer is usually only responsible for the cost of a copy of the mortgage deed.
Agency fees (gestoría)
You may choose to hire a gestoría, or administrative agency, to handle paperwork, taxes, and the property registration process on your behalf.
This is optional, and you can do the paperwork yourself if you prefer. Agency fees are not fixed, but they typically cost around €300.
Real estate agency fees
If you buy through a real estate agency, you might be asked to pay an agency commission, usually around 3% of the property’s value. However, this cost is not regulated by law, and who pays it varies by agency. In some cases, the seller pays the full fee; in others, it is shared.
Always check with the agency before committing to ensure there are no unexpected costs, and compare a few agencies if you’re not sure.
Now that you have a clearer picture of what it really costs to buy a home in Spain, you’re better equipped to plan your purchase.
Make sure your savings cover not just the deposit, but also these additional expenses to avoid surprises later on.
It is time to start looking for your new Spanish home. Browse more than 250,000 properties on thinkSPAN and find the right property for you.
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