The True Cost of Buying a Property: What’s Beyond the Sales Price
· by Roger Widén · 7 min. read
Buying a home is always an exciting milestone. However, it’s also a process full of hidden expenses, unexpected regional tax differences, legal and administrative fees. Clear understanding of these extra costs is essential when considering a property purchase in Spain. Homerun Brokers will help you plan your budget effectively, ensuring a smooth buying experience without any financial surprises. Let's unlock the secrets!
- Table of contents
- Taxes on Property Purchases
- Legal Costs
- Bank and Mortgage Fees
- Avoiding Additional Risks
- Need Help with the Buying Process?
Taxes on Property Purchases
The amount of taxes involved in buying a property is different across Spain. The numbers vary significantly depending on whether the property is a new build or a resale.
Taxes for Buying Resale Properties
For resale properties, the Property Transfer Tax (ITP) depends on the region and typically ranges from 6% to 11% of the purchase price. Here’s a regional breakdown:
- Madrid or Valencian Community: 6%
- Andalusia: 7% to 10%
- Catalonia: Up to 11%
- Marbella (2025): 7% for resale properties purchased from private individuals
(This tax must be settled within 30 days after the notary signing.)
Taxes for Buying Newly Built Properties:
If you’re buying a newly built property, your taxes include VAT and Stamp Duty:
- Value Added Tax (IVA/ VAT), set at 10% of the purchase price for residential properties like villas and apartments.
- Stamp Duty (IAJD) is calculated as a percentage of the purchase price, varying by region from 0.5% to 1.5%. In 2025, in Marbella it is 1.2%.
These taxes are payable at the time of signing the deed at the notary.
It’s important to confirm the tax classification of the property. Newly renovated properties sold by individuals acting as developers may still be subject to IVA and Stamp Duty rather than Property Transfer Tax.
It should be noted that for VPOs (Spanish subsidised housing), for large families (familias numerosas), people with disabilities, and young people there are often lower rates.
Villa Alia, a newly built villa located in the gated community of El Madroñal - exclusively represented by Homerun Brokers
Taxes for Buying a Plot for Construction:
- If you purchase land from a private individual, you will pay the Property Transfer Tax (ITP), which varies by autonomous community and ranges from 4% to 10%.
- If you buy land from a company, you will pay VAT 21%, along with Stamp Duty (IAJD), which is typically 0.5% - 1.5%, depending on the region.
Read our guide offering a detailed look at Spanish tax obligations and property law here.
Legal Costs
Registered lawyers maintain PI Insurance, covering instances of malpractice or negligence, when we talk about buying property, it’s not just the price tag and the taxes you need to think about. In addition, legal and financing fees contribute significantly to the cost of buying homes in Spain.
Legal Fees:
In Spain, hiring a lawyer is not mandatory, but strongly recommended. This ensures that all legal and administrative requirements are met without hassle. A property lawyer is responsible for:
- legal investigation (Due Diligence), conducting a title search, verifying that the property has no outstanding debts or legal issues of any kind,
- reviewing the reservation contract and purchase agreement,
- legal, financial and fiscal advice,
- managing the process of obtaining the NIE (Número de Identificación de Extranjeros) and opening a Spanish bank account,
- coordinating with notaries and other officials,
- managing post-sale services, utility set-up assistance, etc.,
- representation the buyer in court proceedings in case of disputes,
Notary Fees:
Signing your property deed in front of a notary is non-negotiable in Spain. Fees range between €600 and €1.500, and greatly depend on the complexity and price of the property you buy.
You can discover the notary's role and duties here .
Property Registration Fees:
Once the property is yours, it must be officially registered under your name to secure your legal ownership. The fees are fixed by Spanish regulations and depend on the price of the property. Typically, they are between €400 and €1000.
Bank and Mortgage Fees
For buyers planning financing the property, mortgage-related expenses include:
Interest Rates:
As of April 2025, mortgage rates for Spanish residents typically range from 2.5% to 3.9%, while non-residents may see rates from 2.7% to 4.9%, depending on their financial profile and lender requirements.
Loan-to-Value Ratio (LTV):
The average LTV ratio in Spain for expats and non-residents is up to 70%, which means that the borrower must provide a deposit of 30%. Resident buyers will usually need a 20% deposit to buy a property in Spain with the LTV (loan-to-value) often limited to 80%.
Valuation Costs:
A property valuation is required for the loan and often organised by the bank. It is crucial for meeting the bank's risk criteria and securing your mortgage. The valuation report must be issued by a registered and certified appraiser or a valuation company authorised by the Central Bank of Spain.
There is no official fixed fee. The price starts from €250 paid upfront by the buyer. The cost of valuation depends on the size of the property – the larger property is, the more expensive the valuation will be. Some banks cover this fee. The valuation is valid for 6 months from the date of issue.
Bank Arrangement Fees:
Usually 0% to 1% of the loan amount. Some banks may also require you to purchase specific products, home or life insurance, to secure the best rates.
Whether you are purchasing a holiday home, an investment property, or a retirement retreat in Spain, securing a mortgage especially as a non-resident comes with its own set of rules, requirements, and considerations. Discover these here.
Summary
Between the valuation of the property, the notary, registry and the corresponding taxes, we as experts, recommend setting aside to cover taxes and fees additionally 10 -12% of the property’s value, depending on the property’s location, type (new property or resale), and price. This goes on top of 20-30% that you as a buyer need for the mortgage deposit if you do not plan on paying for the property cash.
Avoiding Additional Risks
Remember that if financing from abroad, fluctuations in exchange rates can influence your costs. Professional advice will ensure a smooth process. Here are our essential tips for managing currency exchange and saving money when buying property in Spain.
When it comes to the real estate agent commission, as a rule of thumb, in Spain, sellers pay it, but in some cases, buyers may have to contribute. The fees can range from 2% to 10% of the sale price, but agents usually charge around 6% of the selling price.
Additionally, you need to keep in mind: market volatility, ongoing maintenance costs, possible urban planning irregularities, residency and tax implications, obtaining a NIE number.
Find out about a NIE number in Spain here.
Need Help with the Buying Process?
Buying property abroad is an exciting venture, but navigating the process in a foreign country can be overwhelming. It requires (and deserves) the attention to detail that only expert advice can provide. You can mitigate the risks, make informed decisions, and ensure a successful property purchase in Spain if you work with reputable professionals such as real estate agents, lawyers, mortgage brokers, and financial advisers. At Homerun Brokers, we maintain strong relationships with experienced local professionals, and can assist with every step of the process.
No doubt, Marbella will continue to be a highly sought-after destination for foreign investors, who are attracted with its luxurious lifestyle, best climate in continental Europe, and diverse investment opportunities. Book your free consultation with Homerun Brokers and receive a customized breakdown of all associated costs with one of our agents. We will be happy to help making your home-buying experience seamless, stress-free, and enjoyable.
