Costs of buying real estate in Spain: Taxes and fees in 2024.

What is the real cost of buying a property in Spain in 2024? Buying a home in Spain can be both exciting and daunting for a variety of reasons, especially for foreigners moving abroad and buying property in Spain for the first time.

The process also differs from country to country and is likely to be different in many aspects compared to your home country.

In addition to the cost of the property, remember that you also need to consider other costs such as property tax in Spain and additional mortgage fees, for example.

If you're planning to buy a house in Spain, let's take a look at the taxes and fees for 2024.

When buying a property in Spain, the mortgage is not the only major expense involved in the process and you need to do the calculations to make sure you are not in for any unforeseen surprises.

Banks in Spain typically finance 80% of the value of the property you want to buy (if it will be your permanent residence), which means you need to have at least 20% of the property's value to pay the deposit.

However, this is not all: to complete the transaction, you will have to take into account other costs and property taxes in Spain that need to be paid to become the owner of your new home in Spain.

Between the real estate appraisal, notary, registry and related taxes, experts recommend having an additional savings of 10% to 12%, depending on the location of the property and its value.

This interest must be added to the 20% required for a mortgage lien.

Please note that if you do not require a mortgage, you will still have to pay these additional fees.

They are all mandatory costs associated with buying a home, although the total amount is calculated depending on whether you are buying a new or pre-constructed home, where you are buying the property and for how much.

Here is a brief description of each of them and the approximate cost in 2024:

Cost of buying real estate in Spain

What fees can be expected when purchasing real estate in Spain?

When purchasing real estate in Spain, it is important to consider various fees and expenses. These include the property transfer tax or VAT, depending on whether it is a secondary or new property, which are 6%-10% and 10% respectively.

A stamp duty may also be required, usually ranging from 1-1.5% of the property's value. Notary and cadastral fees, which depend on the property's value, typically range from 0.1% to 2%.

It is also advisable to consider attorney fees, which amount to about 1-2% of the property value, as this will help overcome legal complexities.

Additional expenses may include mortgage fees, real estate agent commissions, property appraisal, utility connection, and homeowners insurance.

It is necessary to create a budget for these expenses to avoid unpleasant surprises and to consult with local professionals to get accurate information tailored to individual circumstances.

Below you will find details about the costs of buying and selling real estate in Spain.

Notary

One of the expenses to consider when buying a house in Spain, whether it's new or resale, is the notary. Notaries in Spain perform functions that are typically handled by a lawyer when purchasing a home in the UK, and their fees are regulated by the government, which means they charge the same amount for the same services.

If we are talking about issuing a public sales contract, the cost usually ranges from 600 to 875 euros, but it significantly depends on the value of the property. For example, for an apartment worth 100,000 euros, you would have to pay about 850 euros, while for an apartment worth 250,000 euros, it would be around 1000 euros.

Cadastre

Money is also required for registering the contract with a notary.

Taxes when buying real estate in Spain

The homebuyer should also set aside extra money to pay for Spanish taxes, although the amount will depend on the value of the house and whether it is new or used.

If you are buying a new house in Spain, you will have to pay more taxes. This is because new builds are subject to VAT (IVA in Spanish). In 2024, the VAT rate will be 10% of the property value.

In other words, you will need to save an additional 10,000 euros for a house costing 100,000 euros and 25,000 euros for a house costing 250,000 euros.

It is worth noting that this tax is lower in the Canary Islands and is not called VAT: the equivalent of VAT when buying a house is 7%, and it is called IGIC - Indirect General Tax in the Canary Islands.

In the case of government-subsidized housing, VAT may be 4%, but this depends on the community and the type of social housing.

When purchasing a new home in Spain, another tax should be added to VAT - the tax on documented transactions (IAJD, also commonly known as AJD). This tax is equivalent to the stamp duty in Spain and is still paid by the buyer.

The amount also depends on each community.

Please note that these taxes do not apply to previously used housing, only to new constructions.

Taxes that need to be paid when buying a used house in Spain

If you are buying a used property in Spain, you typically won't pay VAT, but you will still have to pay the property transfer tax (ITP in Spanish). The rates for this tax depend on the autonomous community and range from 6% to 11%, and it is paid by the buyer.

Spain also levies a property tax on its residents, which is mandatory and usually amounts to about 0.5% of the cadastral value of the property.

Additionally, municipal and other taxes and fees may also arise, so it is advisable to consult a local specialist to get accurate information about tax obligations in your specific region.

I hope this information about taxes, fees, and expenses helps you understand the true cost of purchasing real estate in Spain in 2024.