As with all property purchases, buying property in Spain comes with associated costs, so it is essential to bear this in mind when calculating your overall budget. You will also need to factor in taxes, legal fees, notary costs, Land Registry fees and, where relevant, mortgage-related expenses.
The exact amount depends largely on two things: where the property is located and whether it is a resale or a new-build home.
In southern Spain, a good rule of thumb is to allow around 10% to 11% on top of the purchase price for a resale property and around 12.5% to 14% for a new-build property.
The biggest difference: resale vs new-build
This is where many buyers may become confused, because Spain applies different taxes depending on the type of property being purchased.
For resale properties in Andalucía, buyers usually pay ITP, or transfer tax, which is currently charged at 7%.
For new-build properties purchased directly from a developer, buyers instead pay:
- IVA (VAT) at 10%
- AJD (stamp duty) at 1.2%
That means the tax burden on a new-build property is higher, which is why you need to bear this in mind, depending which type of property you are seeking.
Costs when buying a resale property
For a resale property, the main additional cost is the 7% transfer tax.
On a €500,000 resale property, for example, that would mean:
Purchase price: €500,000
ITP at 7%: €35,000
Buyers then need to add:
- legal fees
- notary fees
- Land Registry fees
- banking and administrative costs
In total, resale buyers in Andalucía often spend around 9-11% above the advertised purchase price once everything is included.
Legal fees
Most buyers appoint an independent lawyer to oversee the purchase. This is strongly recommended, particularly if you are unfamiliar with the Spanish system.
The lawyer normally checks:
- ownership and title
- debts or charges attached to the property
- planning permissions and licences
- contracts and payment terms
- utility and community fee status
- completion documentation
Legal fees are typically 1-2% of the purchase price, plus IVA at 21%, though this varies by firm and transaction complexity.
Notary and Land Registry fees
In Spain, the sale must be signed before a notary and then registered officially with the Land Registry.
These fees are regulated and depend on the value of the property and the complexity of the deeds, although buyers often allow around €1,500 to €2,500 combined as a sensible estimate.
Mortgage costs
If you need a Spanish mortgage, there may also be banking-related expenses.
Since Spain’s mortgage law reforms, the bank generally pays many of the setup costs associated with the mortgage itself, including the mortgage stamp duty, mortgage notary fees and mortgage Land Registry fees.
The buyer usually pays:
- the property valuation fee
- any arrangement or opening fee applied by the bank
Other costs buyers should remember
There are also smaller practical costs that are easy to overlook when budgeting.
These can include:
- NIE number applications
- currency exchange costs
- bank transfer fees
- powers of attorney
- translations
- utility connection costs
Individually, they are usually relatively modest, but together they still form part of the overall purchase budget.
New-build property costs
For buyers purchasing a new-build property, the structure changes slightly because IVA and AJD replace transfer tax.
The standard calculation for a new-build home is:
- 10% IVA
- 1.2% AJD
So, on a €500,000 property:
Purchase price: €500,000
IVA at 10%: €50,000
AJD at 1.2%: €6,000
That brings the total to €556,000 before legal, notary and registration costs are added.
Once those are included, buyers generally budget around 12.5%-14% above the advertised price for a new-build purchase.
Why off-plan purchases work differently
Many new-build homes are purchased off-plan, meaning buyers pay in stages throughout construction rather than paying the full amount upfront.
Typically, this involves:
- an initial reservation payment
- a contract payment
- staged payments during construction
- the remaining balance on completion
Spanish law also requires buyer payments to be protected through bank guarantees or insurance during the build process, which is one of the reasons buyers should always appoint an independent lawyer when purchasing off-plan property.
For many buyers, this staged structure can make financial planning considerably easier, particularly for international purchasers organising mortgages, currency transfers or the sale of another property.
Planning properly from the beginning
The Spanish buying process is relatively straightforward once you understand how the costs are structured.
The key is budgeting correctly from the outset. Taxes form the largest part of the additional costs, followed by legal and administrative expenses.
For buyers purchasing in Andalucía, the safest working estimate is:
- around 10% to 11% above the purchase price for resale property
- around 12.5% to 14% above the purchase price for new-build property
The exact figures should always be confirmed by an independent lawyer before contracts are signed, but understanding the overall structure early on makes the process far more manageable.
FAQs
What taxes do you pay when buying a new-build property in Andalucía?
For a new-build home purchased directly from a developer, buyers in Andalucía normally pay 10% IVA plus 1.2% AJD stamp duty. Together, this creates an 11.2% tax cost on top of the purchase price.
How much should buyers budget on top of the purchase price?
As a general guide, buyers in Andalucía usually allow around 10% to 11% above the purchase price for resale property and around 12.5% to 14% for new-build property once taxes, legal fees and administrative costs are included.
Do off-plan buyers in Spain receive protection for staged payments?
Yes. Spanish law requires developer payments for qualifying off-plan purchases to be protected through bank guarantees or insurance policies, which is one of the reasons buyers should always appoint an independent lawyer.
What is the difference between buying a resale property and a new-build property in Spain?
The biggest difference is the tax structure. Resale properties in Andalucía are generally subject to 7% transfer tax, while new-build properties are subject to 10% IVA plus 1.2% AJD. New-build homes also often involve staged payments during construction.
