Property Purchase Taxes and Buying Costs in Spain — An Expat's Guide

One of the most common financial surprises for expats buying property in Spain is discovering how much the purchase costs on top of the advertised price. Unlike some countries where buyers and sellers split transaction costs, in Spain the buyer carries almost all the tax and fee burden. Budget incorrectly and you could find yourself significantly short at the notary's table.

This guide explains every major cost involved in buying property in Spain — the taxes, the professional fees, and the ongoing insurance obligations — so you can plan your budget accurately from the outset.

The Two Main Property Purchase Taxes in Spain

The most significant cost on top of the purchase price is the property transfer tax. In Spain, which tax you pay depends entirely on whether you are buying a resale (second-hand) property or a brand-new property from a developer.

ITP — Impuesto de Transmisiones Patrimoniales (Resale Properties)

If you are buying a resale property — one that has been owned and lived in before — you will pay ITP (Impuesto de Transmisiones Patrimoniales), often called transfer tax in English. ITP is calculated as a percentage of the purchase price declared in the escritura (deeds), and the rate is set by the autonomous community (region) where the property is located.

This is where things get complicated: every region of Spain sets its own ITP rate, and they differ substantially. Here is an overview of the general rates applicable in 2026 across major regions:

• Andalucía: 7% flat rate (reduced from former tiered rates in recent years)
• Madrid: 6% — one of the lowest rates in Spain
• Valencia (Comunitat Valenciana): 10%
• Cataluña: 10% (with a reduced 5% rate for properties under €200,000 for certain buyers)
• Murcia: 8%
• Balearic Islands: graduated rates from 8% to 13% depending on the value
• Canary Islands: 6.5%
• Extremadura: up to 11%

Some regions also offer reduced rates for specific circumstances — first-time buyers, large families, young buyers, people with disabilities, or properties below certain price thresholds. Your gestor or property lawyer will advise on any reductions you may be eligible for.

It is worth noting that the tax authority can challenge the declared purchase price if it is below what they consider the minimum taxable value (valor de referencia). This was a significant change introduced in recent years — the Catastro now publishes a reference value for every property, and if the sale price is below this, the tax authority may assess ITP on the higher reference value instead.

IVA — VAT on New-Build Properties

If you are buying a new-build property directly from a developer — a property that has never previously been sold — you pay IVA (VAT) instead of ITP. The standard IVA rate for residential property in mainland Spain and the Balearic Islands is 10%. In the Canary Islands, the equivalent tax (IGIC) applies at a lower rate of 7%.

IVA is a national tax set by central government, so unlike ITP there is no regional variation for standard residential property. The 10% rate applies uniformly across mainland Spain regardless of whether you are buying in Marbella, Madrid, or Barcelona.

There is an important exception: if you are buying commercial property or land (rather than a residential property), IVA applies at the full 21% rate. For social housing (vivienda de protección oficial, or VPO), a reduced 4% IVA rate applies.

AJD — Stamp Duty on New-Build Properties

New-build buyers must also pay AJD (Actos Jurídicos Documentados) — a stamp duty levied on the notarial deeds. For new-build purchases, AJD applies both to the sale deed and, if applicable, to the mortgage deed.

AJD is another regionally-set tax. Rates typically range from 0.5% to 1.5% of the property value (or mortgage value for the mortgage deed). In practical terms, for a new-build property worth €250,000, the AJD charge might be €1,250–€3,750.

Resale property buyers also pay AJD, but at a much lower fixed rate — typically a nominal stamp on the notarised deeds rather than a percentage of the purchase price. The significant AJD cost for new-builds versus resale properties is one reason that the overall tax burden between the two types of purchase often ends up broadly comparable despite the different main taxes applying.

Notary Fees

In Spain, all property purchases must be completed before a Notario (notary public) who prepares and witnesses the escritura de compraventa — the official deed of sale. Notary fees in Spain are regulated by central government on a sliding scale based on the value of the transaction and the complexity of the deed.

For a typical residential purchase:

• Property valued at €150,000: notary fees approximately €600–€800
• Property valued at €250,000: notary fees approximately €800–€1,100
• Property valued at €400,000: notary fees approximately €1,000–€1,400

If you also have a mortgage, a separate deed of mortgage must be notarised, which incurs an additional notary fee. In Spain, since legislation changes in 2019, the mortgage lender pays the notary fee on the mortgage deed — not the buyer — which was a significant shift that reduced the buyer's costs at completion.

You have the right to choose your own notary. Many expats use a notary recommended by their lawyer or gestor, which is perfectly acceptable. The notary's role is to verify the identity of all parties, confirm the transaction is legally sound, collect certain taxes on behalf of the relevant authority, and register the deed.

Land Registry Fees

Once the notary has completed the escritura, the deed must be registered at the Registro de la Propiedad (Land Registry). Registration is not automatic — it must be applied for, and there is a fee. Land registry fees are also regulated on a sliding scale.

As a rough guide, land registry fees are approximately 60–70% of the notary fee for the same transaction — so for a property where notary fees are €900, expect land registry fees of around €550–€630. Again, if there is a mortgage, a separate mortgage entry in the land registry incurs an additional fee.

Your gestor will typically handle the submission to the Land Registry on your behalf, as part of their standard service for property purchases. The process takes a few weeks after completion.

Gestor and Legal Fees

Almost every expat property buyer in Spain engages either a gestor, an abogado (property lawyer), or both. Their roles overlap in some respects but differ in important ways.

What a Property Lawyer (Abogado) Does

A property lawyer reviews the title deed for any debts or encumbrances on the property, checks planning permissions, reviews the private purchase contract (contrato de arras or contrato de compraventa), advises on any issues with the property, and is present at completion. For expats especially, having a lawyer review the purchase is considered essential rather than optional — there are too many ways a property purchase in Spain can go wrong without proper legal due diligence. Lawyers typically charge 1% of the purchase price, often with a minimum fee of around €1,500.

What a Gestor Does

A gestor handles the administrative and tax side: filing the ITP or IVA return, submitting the change of ownership forms, registering the property at the Land Registry, changing utility accounts into your name, and dealing with the various local administrative requirements. Some law firms combine both roles; other buyers use a separate gestor. Fees for gestor services on a property purchase typically run €500–€1,500 depending on complexity.

Estate Agent Fees

Unlike in the UK, in Spain it is the seller who pays the estate agent's commission rather than the buyer. The commission is typically 3–6% of the sale price and is deducted from the seller's proceeds. As a buyer, you should not be charged a separate estate agent fee unless you have specifically engaged a buyer's agent to search for properties on your behalf, in which case a separate fee will be agreed in advance.

Mortgage Costs (If Applicable)

If you are financing the purchase with a mortgage, additional costs apply. The main ones for the buyer are:

• Mortgage arrangement fee (comisión de apertura): typically 0.5–1.5% of the loan amount, though some lenders have abolished this
• Property valuation (tasación): the lender will require an official valuation by an approved valuer — typically €300–€600
• Life insurance: many Spanish mortgage lenders require you to hold a life insurance policy as a condition of the mortgage, to cover the outstanding balance if you die during the term

Note that since 2019 Spanish legislation requires the mortgage lender to pay the notary fee on the mortgage deed, the land registry fee for the mortgage registration, and the AJD on the mortgage deed. This was a significant change from previous practice and has meaningfully reduced buyers' costs when using a mortgage.

The 10–14% Rule of Thumb

When budgeting for a property purchase in Spain, the widely used rule of thumb is to add 10–14% to the purchase price to cover all taxes and fees. The exact figure depends on:

• The region (ITP rates vary from 6% to 13%)
• Whether it is a new-build or resale
• Whether you are using a mortgage
• The complexity of the legal work required

For a resale property in Andalucía worth €300,000 — one of the more common scenarios for British expats — the breakdown might look like this: ITP at 7% = €21,000; notary fees €1,000; land registry fees €650; gestor/legal fees €2,000; miscellaneous €350. Total additional cost: approximately €25,000, or just over 8% in this case. Add in mortgage costs if applicable and the figure climbs toward 10%.

For a new-build in Valencia worth €300,000: IVA at 10% = €30,000; AJD at 1% = €3,000; notary fees €1,000; land registry €650; legal/gestor €2,000; total approximately €36,650 — over 12%.

Insurance from Day One

The day you sign the escritura and take legal ownership of the property, you are responsible for it. Two insurance products are relevant immediately.

Buildings Insurance (Continente)

Buildings insurance covers the physical structure of the property — walls, roof, floors, fitted kitchens and bathrooms, and permanent fixtures. If you have a mortgage, your lender will require buildings insurance as a condition of the loan and will typically want to be named as an interested party. Even without a mortgage, buildings insurance is essential — if fire, flood, or structural damage destroys your property without insurance, you bear the entire cost personally.

Contents Insurance (Contenido)

Contents insurance covers your furniture, electronics, clothing, and personal possessions inside the property. This is particularly important if you are furnishing a property from scratch after moving from the UK, as the contents may represent a substantial investment. Many policies combine buildings and contents into a single hogar (home) policy.

At 247 Expat Insurance, we arrange home insurance for expat property owners in Spain — both those with mortgages and those buying outright. Our English-speaking team can help you find the right cover quickly, so you are properly protected from the moment you take ownership.