The True Cost of Buying Property in Spain
When British and European buyers find their dream home on the Costa Blanca, they often focus on the purchase price without fully understanding the additional costs involved. In Spain, taxes, fees and other expenses can add between 12% and 15% on top of the property price, and failing to budget for these can lead to unpleasant surprises at completion.
At Tomas Ballestero Lawyers, we always provide our clients with a full cost breakdown before they commit to any purchase. Here is a detailed guide to the hidden costs of buying property in Spain.
Transfer Tax (ITP) or VAT (IVA)
The biggest additional cost is the property transfer tax. For resale properties in the Valencia region (which includes Javea, Denia, Calpe, Moraira and Benidorm), the rate is 10% of the declared purchase price. For new-build properties purchased directly from a developer, you pay VAT (IVA) instead, plus stamp duty (Actos Jurídicos Documentados or AJD) at 1.5% in the Valencian Community.
Notary Fees
The notary is an essential part of the Spanish property purchase process. They witness the signing of the public deed of sale and verify the legality of the transaction. Notary fees are set by the Spanish government and depend on the value of the property, but typically range from €600 to €1,200. These are usually paid by the buyer.
Land Registry Fees
After completion, the property must be registered in your name at the local Land Registry (Registro de la Propiedad). Registration fees are also regulated and based on the property value, typically between €400 and €700.
Legal Fees
Your lawyer’s fees will vary depending on the complexity of the transaction. At Tomas Ballestero Lawyers, our conveyancing fees are transparent and agreed in advance. You should ask us for a fixed-fee quote agreed in advance applying for lower-value properties.
Mortgage Costs
If you are financing your purchase with a Spanish mortgage, there are additional costs to consider. Since 2019, most mortgage-related expenses (including the mortgage tax, notary fees and Land Registry fees for the mortgage deed) are paid by the bank. However, you will still need to pay for an independent property valuation (tasación), which typically costs between €300 and €500.
Bank Charges and Currency Exchange
Transferring funds from the UK to Spain involves currency exchange costs. Using your high street bank for international transfers can be expensive due to poor exchange rates and high fees. We recommend using a specialist currency exchange company, which can save you thousands of pounds on a property purchase. You may also face charges for banker’s drafts (cheques bancarios) needed at completion.
Plusvalía Municipal Tax
Technically, the plusvalía tax (a municipal tax on the increase in land value) is the seller’s responsibility. However, in some transactions, particularly with foreign sellers, there may be negotiations about who pays this. Your lawyer will ensure this is clearly addressed in the purchase contract to avoid any disputes.
Ongoing Costs After Purchase
Once you own property in Spain, there are several annual costs to budget for. The IBI (Impuesto sobre Bienes Inmuebles) is the annual property tax, similar to council tax in the UK, and varies by municipality. Community fees (gastos de comunidad) apply if your property is in a development with shared areas. Utility bills, home insurance and, for non-residents, an annual non-resident income tax declaration on the property are also required.
How to Avoid Unexpected Costs
The best way to avoid hidden costs is to work with an experienced property lawyer on the Costa Blanca who will give you a complete and honest cost estimate before you sign anything. At Tomas Ballestero Lawyers, we provide a detailed written breakdown of all expected costs at the outset, so you know exactly what to budget for.
Contact us today on +34 607 320 768 (WhatsApp available) for a clear, no-obligation cost estimate for your property purchase in Spain.
