Expenses and taxes when buying a home in Spain

Expenses and taxes when buying a home in Spain

Buying a property in Spain is an exciting step, but it’s essential to be aware of the additional costs involved beyond the purchase price. Many international buyers, especially retirees and investors, are surprised by the range of expenses and taxes when buying a home in Spain. Understanding these costs in advance helps you budget correctly and avoid unpleasant surprises.

Main taxes when buying a property

The taxes you’ll pay depend on whether the property is a new build or a resale:

• VAT (IVA): Applied to new build properties at a rate of 10% of the purchase price.
• Stamp Duty (AJD): Paid on new build properties, usually between 1% and 1.5% depending on the region.
• Transfer Tax (ITP): Paid on resale properties, ranging from 6% to 10% depending on the autonomous community where the property is located.

For example, if you purchase a new home in Pilar de la Horadada, you’ll pay VAT plus stamp duty. If you buy a resale home in Campoamor, you’ll be charged transfer tax instead.

Notary and registration fees

In addition to taxes, you must consider notary and registry fees:

• Notary fees: These vary depending on the price and complexity of the property deed but typically range from €600 to €1,000.
• Land Registry fees: Registration of the property in your name generally costs between €400 and €700.

These fees ensure your property rights are legally recognized and protected under Spanish law.

Legal and administrative costs

Most buyers also use professional services during the purchase process:

• Lawyer’s fees: Hiring a lawyer is highly recommended, especially for foreign buyers. Expect to pay around 1% of the property price.
• Gestoría fees: Administrative agents can help manage paperwork, costing approximately €300 to €500.
• Mortgage costs: If financing is required, you may face bank opening fees or appraisal costs, usually ranging from €300 to €1,000.

Ongoing costs after purchase

Once you’ve bought your home, there are recurring expenses to consider:

• IBI (Property Tax): A yearly municipal tax, based on the cadastral value of the property.
• Community fees: If the property is part of a residential complex, you’ll contribute to shared maintenance costs.
• Insurance: While not obligatory, home insurance is strongly recommended to protect your investment.

Plan your budget carefully

When calculating your budget, it’s wise to add between 10% and 15% on top of the purchase price to cover all expenses and taxes when buying a home in Spain. This ensures you won’t face unexpected financial strain after committing to your new property.

Find the right property with confidence

Understanding the true costs of buying property in Spain allows you to make informed decisions. Whether you’re looking at modern new builds or charming resale homes in Pilar de la Horadada, Campoamor, or other areas of the Costa Blanca, knowing your total expenses is key. Explore a wide selection of properties now at Sunset Homes and take the next step toward your dream home in Spain.

Conclusion

Buying a property in Spain comes with more than just the purchase price. Taxes, notary fees, and ongoing costs are part of the process, but with careful planning, you can enjoy your new home stress-free. By preparing your budget with all expenses in mind, your investment will be smooth and secure.