Taxes and payments when buying real estate in Spain in 2023.

When buying a property in Spain, buyers need to consider other costs and expenses. Finding the perfect home in Spain is just the start of a journey that can be both exciting and overwhelming, especially for expats moving from the UK to start a new life on the sunny coast.

It should be noted that the process of buying a house differs from country to country, and in addition to the cost of bricks and mortar work, buyers in Spain need to consider a number of other costs and expenses such as property tax and additional mortgage fees.

In Spain, banks typically finance 80% of the cost of a property if it is to be used as a primary residence. This means that buyers must have at least 20% of the value accumulated to qualify for the loan. But other costs and property taxes in Spain must be taken into account for the transaction.

In addition to a 20% down payment, experts recommend having another 10-12% extra to cover the costs of a notary, registration and taxes. Even those who are able to pay in full for the purchase must pay these mandatory costs, although they vary depending on whether a new or second-hand home is being bought.

There is a breakdown of the approximate cost of taxes and fees that need to be paid when buying a property in Spain in 2023:

Notary

Whether the property is a newly built property or not, the cost of a notary must be factored in. In Spain, notaries are the equivalent of a solicitor when buying in the UK and their fees are regulated by the Spanish government. This is good news as they all charge the same fee. Prices vary from 600 to 875 euros for the execution of a public sale contract, depending on the value of the property: the higher the value, the higher the fee.

Land Registry

After the deed is drawn up by a notary, it must be registered, which costs between 400 and 700 euros, fixed fees set by the state.

Other property taxes

Once again, the cost of Spanish taxes depends on the value of the house and whether it is new or not. Taxes are usually higher in the case of new-build properties as they are subject to VAT, known as IVA in Spain, which in 2023 is 10% of the value of the property. The Canary Islands tax is 7% and is known as IGIC - General Canary Island Tax.

• Andalucía: 1.2%
• Aragon: 1.5%
• Asturia: 1,2%
• Balearic Islands: 1.2%
• Canary Islands: 0.75%
• Cantabria: 1.5%
• Castile-La Mancha: 1.5%
• Castilla y León: 1.5%
• Catalonia: 1.5%
• Ceuta: 0.5%
• Madrid: 0.75%
• Valencia: 1.5%
• Estremadura: 1.5%
• Galicia: 1.5%
• La Rioja: 1.0%
• Melilla. 0.5%
• Murcia: 1.5%
• Navarra: 0.5%
• Basque Country: 0.0%

The Property Transfer Tax (ITP) is a compulsory expense when buying a second-hand home in Spain, and a rate of between 6 and 10% usually applies, although this depends on the Autonomous Community. ITP rates in different regions are as follows:

• Andalucía: 8.0%
• Aragon: 8.0%
• Asturia: 8.0%
• Balearic Islands: 8.0%
• Canary Islands: 6.5%
• Cantabria: 10.0%
• Castile-La Mancha: 9.0%
• Castile-León: 8.0%
• Catalonia: 10.0%
• Ceuta: 6.0%
• Madrid: 6.0%
• Valencia: 10.0%
• Extremadura: 8.0%
• Galicia: 10.0%
• La Rioja: 7.0%
• Melilla: 6.0%
• Murcia: 8.0%
• Navarra: 6.0%
• Basque Country: 4.0%

To find the perfect home in Spain, you can contact Girasol Homes, specialized in finding properties in Spain and Portugal. With many available properties to buy or rent, Girasol Homes is the first choice for many people looking for real estate on the Mediterranean. They also have partners in the province of Huelva, the Costa del Sol region and offer properties for sale in La Romana, an exclusive inland region of Spain. If you need help finding real estate, you can contact them now or use their free real estate search service.