The cost of buying real estate in Spain: taxes and fees 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 many reasons, especially for expats buying property abroad for the first time. The process also differs from country to country and is likely to be different in many aspects from what you are used to. As well as 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 are planning to buy a house in Spain, let's take a look at the taxes and commissions for 2024.

When buying a property in Spain, the mortgage is not the only major expense in the process and you will have to do the math to make sure you don't run into any unforeseen surprises. Banks in Spain typically finance 80% of the value of the property you want to buy (if the property is to be used as your primary residence), which means you should have at least 20% of the property's value saved up to pay the deposit. However, this is not all: there are a number of other costs and property taxes in Spain that you should be aware of and pay to formalize the transaction before you can become the owner of your new home in Spain. From the valuation of the property, the notary, the registry and the corresponding taxes, experts recommend having an additional savings of 10% to 12%, depending on the location of the property and its value. This interest is added to the 20% required for the mortgage deposit. Note that if you don't need a mortgage, you still have to pay these additional fees. These are all mandatory costs associated with buying a home, although the final amount depends on whether you are buying a new or used home, where you are buying the property and the amount.

Here's a brief description of each and the approximate price/cost in 2024:

Cost of buying real estate in Spain

What are the fees associated with buying real estate in Spain? There are several fees and costs to consider when purchasing real estate in Spain. These include property transfer tax or VAT, depending on whether the property is new or second-hand, and range from 6% to 10% and 10% respectively. Stamp duty taxes may also apply, typically 1-1.5% of the value of the property. Notary and land fees, calculated on the value of the property, typically range from 0.1% to 2%. It is advisable to consider legal fees, which are around 1-2% of the property value. Additional costs may include mortgage fees, real estate agent fees, property appraisals, utility connections and home insurance. It is important to plan for these costs in advance to avoid surprises and consult with local professionals to get accurate information to suit your individual circumstances.

Notary

One of the costs to consider when buying a house in Spain, whether new or second-hand, is the notary. Notaries in Spain perform what a notary would normally do when buying a house in the UK and their fees are regulated by the government, which means they all charge the same for identical services. In the case of a public deed purchase agreement, prices typically range from €600 to €875, but are highly dependent on the value of the property. For example, for an apartment worth €100,000 you will pay around €850, while for an apartment worth €250,000 you will have to pay around €1,000.

Land Registry

It also costs money to register notarized documents. Again, these costs are fixed by Spanish regulations and depend directly on the value of the property, although they are usually between 400 and 700 euros.

Taxes when buying real estate in Spain

When buying a house, the buyer must also set aside money to pay Spanish taxes, although the amount will depend on the value of the property and whether it is new or secondary. If you are buying a new home in Spain, you will have to pay more taxes. This is because new-build properties are subject to VAT (IVA in Spanish). In 2024, VAT will be 10% of the value of the property. In other words, you will need to save an additional €10,000 if the value of the house is €100,000 and €25,000 if the value of the house is €250,000. It is worth noting that this tax is lower in the Canary Islands and is not called VAT: the equivalent of VAT on the purchase of a house is only 7% and is known as IGIC-Tax of the Canary Islands. In the case of public housing subsidies, VAT can be 4%, but this varies by autonomous community and type of social housing.

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

• Autonomous community: Andalusia
• VAT: 10.0%
• Azhda: 1.2%

• Autonomous community: Aragon
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Asturias
• VAT: 10.0%
• Azhda: 1.2%

• Autonomous community: Balearic Islands
• VAT: 10.0%
• Azhda: 1.2%

• Autonomous community: Canary Islands
• VAT: 6.5%
• Azhda: 1.0%

• Autonomous community: Cantabria
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Castile-La Mancha
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Castile and León
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Catalonia
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Ceuta
• VAT: 10.0%
• Azhda: 0.5%

• Autonomous Community: Madrid
• VAT: 10.0%
• Azhda: 0.6%

• Autonomous community: Valencia
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Extremadura
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: Galicia
• VAT: 10.0%
• Azhda: 1.5%

• Autonomous community: La Rioja
• VAT: 10.0%
• Azhda: 1.0%

• Autonomous community: Melilla
• VAT: 10.0%
• Azhda: 0.5%

• Autonomous Community: Murcia
• VAT: 10.0%
• Azhda: 2.0%

• Autonomous community: Navarre
• VAT: 10.0%
• Azhda: 0.5%

• Autonomous community: Basque Country
• VAT: 10.0%
• Azhda: 0.0%

For used homes in Spain, the most important tax to keep in mind is the property transfer tax (ITP). In this case, the amount depends on the percentage applied to the registered price and the autonomous community where the house is located, although as a general rule, the rate ranges from 6% to 10%. The following property transfer tax rates apply in 2024:

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

• Autonomous community: Andalusia
• ITP: 7.0%

• Autonomous community: Aragon
• ITP: 8.0%

• Autonomous community: Asturias
• ITP: 8.0%

• Autonomous community: Balearic Islands
• ITP: 8.0%

• Autonomous community: Canary Islands
• ITP: 6.5%

• Autonomous community: Cantabria
• ITP: 9.0%

• Autonomous community: Castile-La Mancha
• ITP: 9.0%

• Autonomous community: Castile and León
• ITP: 8.0%

• Autonomous community: Catalonia
• ITP: 10.0%

• Autonomous community: Ceuta
• ITP: 6.0%

• Autonomous Community: Madrid
• ITP: 6.0%

• Autonomous community: Valencia
• ITP: 10.0%

• Autonomous community: Extremadura
• ITP: 8.0%

• Autonomous community: Galicia
• ITP: 10.0%

• Autonomous community: La Rioja
• ITP: 7.0%

• Autonomous community: Melilla
• ITP: 6.0%

• Autonomous Community: Murcia
• ITP: 8.0%

• Autonomous community: Navarre
• ITP: 6.0%

• Autonomous community: Basque Country
• ITP: 4.0%

It should be noted that for VPO in Spain (subsidized housing), families with many children (known in Spain as familias numerosas), people with disabilities, and young people often benefit from lower rates. For example, in Madrid, families with 3 or more children who purchase independent housing pay 4% of the registered price as property tax, provided that the housing they buy is their primary residence.

Advisor

The only optional expense when buying a house is hiring a "gestor," a person who can handle tax regulations and complete other paperwork. Hiring an advisor like this can be especially helpful for expats who do not speak Spanish. They do not have specific rates, and they usually only enter into a contract when opening a mortgage for a property purchase, with an approximate cost of 300 euros. Learn more about how a "gestor" can assist you in Spain.

Additional costs of a mortgage in Spain

All the taxes and fees mentioned above apply whether you need to take out a mortgage or not. If you plan to purchase property in Spain with a mortgage, keep in mind that there may be additional costs that you did not anticipate. Be aware that mortgage costs and terms may also differ if you are not a resident of Spain.

Property appraisal

If a buyer is planning to take out a mortgage, they will have to pay an appraiser to assess the value of the property. This is usually organized by the bank, and after the property assessment, the bank will know what percentage of financing it can provide. As mentioned earlier, banks in Spain typically offer a loan of 80% of the purchase price or appraised value, although some provide financing of 90-100% of the purchase price, usually setting a minimum amount. In 2024, the appraisal will cost between 250 and 600 euros, depending on the company conducting the process, the type of property, and its valuation. Some Spanish banks cover these costs, but not all, so it’s important to check this in your loan terms. Once the appraisal is completed, it is valid for 6 months from the date of issuance.

Account opening

Some banks may charge a fee for opening an account or taking out a mortgage, and this fee can be up to 2% of the provided capital, as agreed with the financial institution. However, there are now many banks in Spain that do not charge such fees. Please note that to obtain certain mortgages, banks may also require you to take out home insurance or life insurance, which often also reduces the interest rate on your mortgage.

What are the total costs of buying a house?

The total expenses and taxes that need to be paid when purchasing real estate range from 10% to 12% of the property's value. The exact amount depends on the value of the property and the autonomous community where the purchase is made. For example, if you are buying a house worth 200,000 euros in Madrid, you will have to pay the following amounts, combining all expenses: notary fees, specialist fees, and taxes. It's worth noting that some expenses, such as notary fees, vary between different percentages, so the resulting figures may be approximate:

• Expenses:
• New building (€): 23,300
• Used housing (€): 13,800

What are the issues with buying real estate in Spain?

Buying real estate in Spain can come with several potential issues that buyers should be aware of. These include legal disputes in the Spanish real estate market, understanding and planning for various fees and taxes, as well as unscrupulous purchasing schemes and violations of urban planning regulations. Additionally, important aspects include ongoing maintenance costs, market volatility, currency exchange risks, and issues related to residency and taxation. To mitigate these risks, thorough research, due diligence, and working with reliable professionals such as real estate agents, lawyers, and financial advisors are essential to make informed decisions and ensure a successful property purchase in Spain. For more detailed information on the challenges of buying real estate in Spain, please refer to our guide.

So, considering all of this, it's time to start the search for your dream home in Spain. And don't forget that here at idealista, our mortgage experts at idealista/hipotecas can also help you find the right mortgage for your needs.