Costs Involved in Buying a Property in Spain

When purchasing a property in Spain, you need to be aware of the extra costs involved, as they are typically more than in the UK.

Typically, costs should be no more than around 8% of the value of the property, and are made up of:

7% transfer tax (I.T.P.) payable by the buyer for the purchase of any Real Estate (villas, flats, land, commercial premises, garages), provided the vendor is not a developer or normally trading in the business of resale properties.

8% (7% VAT and 1%stamp duty) for any villa, apartment or garage that is annexed to an apartment, where the vendor is a developer, promoter or habitual trader in these generally new properties.

17% (16% VAT and 1% stamp duty) for parcels of land, commercial premises, or garages not annexed to an apartment, where the vendor is a developer, promoter or habitual trader. This covers virtually all newly urbanized land parcels and newly built commercial premises, and includes resale properties when the vendor falls into one of the above categories.

Notary and Property Registry fees should vary between € 1,200 and € 2,500 each depending on the value and complexity of the property.

The plus valía tax can be as little as a few hundred Euros or as much as many thousands of Euros on a property with a lot of land that hasn't changed hands in many years. This tax must be quantified and may be negotiated with the seller, although it is often the custom that the tax is passed to the buyer in the case of apartment sales. This is an “added value” tax based upon the increase of the Town Hall index value of the land only, from the prior (vendor’s) purchase to the present sale. It is usually not a significant amount with respect to apartments or townhouses – less than €1000 for the most part for an apartment or townhouse which last changed hands five or six years ago – but can be more in the case of villas with a large tract of land.

In summary, the total official costs involved in purchasing built residential property should be less than 8% for resale properties, or 8½ - 9% if VAT is paid (new properties), plus the Plus Valía tax if applicable. Lawyer's fees are in the order of 1% of the selling price, more or less, depending on the lawyer. The seller pays agent’s fees as you would expect unless otherwise agreed.