Buying property in Spain is subject to certain costs. These include costs for land registry services, notary services and valuation. In addition, buyers should take into account transfer taxes and annual real estate taxes when purchasing property.

The percentage of tax to pay is dependent on whether you are buying a resale or a new build property. The amount of tax is also dependent on whether you are not you are a resident of Spain. Finally, the expenses are also subject to your needs in regards to a mortgage, or the fact that you finance the purchase of your property out of your savings. In the first situation you will pay a onetime only amount of tax on the mortgage amount. I certain specific situation it could be interesting to buy your property with a (small) loan depending on your personal situation. Below we will address the most common costs and taxes and charges applied when buying property in Spain.

Property Transfer Tax, VAT and Registration fee

The property tax is the biggest expense that comes with investing in Spanish real estate. The Spanish name of general property tax is Impuesto sobre Transmisiones Patrimoniales which abbreviates to ITP. On a resale property the ITP is 10% of the property value as described in the title deeds.

If you buy a new build property, for which you will be registered as the first owner, the tax that is subject to the sale is the VAT, or in Spanish Impuesto sobre el Valor añadido (IVA). The percentage of IVA is also 10% of the property value.

In special occasions, the highest percentage of 21% IVA could be applicable on the purchase of certain properties. This is most often applicable to properties that are rebuild or extensions. We will not detail this subject here, however you should be aware that these kinds of situations are usually unexpected and can be the cause of a lot of stress. Please be aware of these types of properties and for advice, consult a real estate professional who is familiar with the law and procedures in Spain.

Yearly Real Estate Tax

A yearly property tax is applicable to ownership of real estate in Spain. This particular property tax is called Impuestos sobre Bienes Inmuebles, abbreviated to IBI. The IBI is a tax that has to be paid every year. The amount is based on the value of your property which depends on several factors, including the type of house, the size of the plot, the number of square meters of constructed area and the municipality that the property is located within. Please take into account the amount of IBI tax will be between 100 en 400 euros yearly for an average sized property.

The Notary

When signing the title deeds of your new home in Spain, the charge for the notary services will be between 0,5% to 1% of the value of the property.

Land register

Directly after signing the title deeds at the notary, your ownership will be registered at the Spanish land register or Registro de la propiedad. The registration is subject to a fee between 0,3% and 0,7% of the property’s value.

Extra expenses when taking out a mortgage

If you decide to finance your new home with a bank loan, for example, with a mortgage arranged through a Spanish bank, you need to take into account some extra expenses:

Bank commission

When financing property with a mortgage, the bank commission will be about 1% of the mortgage amount.

Spanish Stamp Duty on Mortgages

If you decide to take out a Spanish mortgage you will pay tax on the mortgage amount. To be more precise, you will be taxed on the full responsibility of the mortgage granted which is calculated by the initial capital + interests + costs of possible delays. The total should be between 150% and 200% of the initial capital of the loan. This tax is known as the mortgage stamp duty, in Spanish it’s called, Impuesto sobre Actos Jurídicos Documentados de hipoteca.(IAJD)


If you decide to apply for a mortgage with a Spanish bank, part of the application process will be the valuation of the property by a certified valuation company. The expenses of the valuation will be between 250 en 500 euros, depending on the size of the property.

Life Insurance

With life insurance you will have the peace of mind that your relatives will not face the worries of a heritance consisting of real estate that comes with debts. Some banks offer you a lower interest rate in exchange for a life insurance contract with them. Some banks do also offer health and unemployment insurances. These types of insurances covers mortgage quotes if you wouldn’t be able to pay them due to long term illness or unemployment in the future.

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