Expenses of a Purchase-Sale

When planning to purchase a property in Spain, it is essential to understand that the advertised sale price does not represent the total cost of the investment. In addition to the value of the property itself, the buyer must take into account a series of taxes, fees, and professional honorariums. On average, the additional budget you need to prepare varies around 13% of the property's purchase price.

For complete transparency and accurate financial planning, we have detailed below all the components that make up these additional expenses, differentiated based on the type of property (new build or resale) and the method of financing.

Property Transfer Tax (ITP) – For Resale Homes

If the property you are purchasing has had a previous owner (a resale or second-hand home), the main tax applied is the Property Transfer Tax (Impuesto sobre Transmisiones Patrimoniales - ITP).

This tax is regulated at a regional level, meaning that the exact percentage depends entirely on the autonomous community where the property is located. For example, in the Valencian Community (which includes highly sought-after areas such as Alicante, Torrevieja, or Valencia), the current standard rate for this tax is 10% of the purchase value. In other regions of Spain, this percentage can generally fluctuate between 6% and 10%.

Specific Taxes for New Buildings (New Constructions)

In case you opt for a brand-new property bought directly from the developer, the tax structure changes completely. The buyer no longer pays ITP, but rather the following two taxes:

• Value Added Tax (VAT / IVA): The standard rate applied to new residential properties is 10% of the sale value stipulated in the contract. However, there is an important exception: if the property falls under the category of officially protected social housing (VPO - Vivienda de Protección Oficial), the VAT rate is considerably reduced to just 4%.
• Documented Legal Acts Tax (IAJD): This is a second tax added to the VAT in the case of new properties. It covers the notarial costs of registering public documents and varies between 0.5% and 2%, depending on the strict regulations of each autonomous community. This tax is fully borne by the buyer.

Expenses Derived from a Mortgage Loan

If you require bank financing to complete the purchase, the process involves certain specific costs. However, the legal framework in Spain has changed substantially in favor of the consumer. According to the current regulations of the Mortgage Credit Law, most of the expenses for setting up a mortgage (notary, registry, management fees, and the IAJD tax for the mortgage) are assumed and paid directly by the financial entity (the bank).

Nevertheless, the buyer may still need to negotiate or bear certain commissions, such as the bank opening commission. This fee varies from one bank to another and can often be partially negotiated or completely waived, depending on your client profile and the financial products you choose to contract.

Official Property Appraisal (Tasación)

Appraising the property is a mandatory procedure if you are applying for a mortgage. The bank requires an official report generated by a certified, independent appraisal company to determine the real market value of the property.

The cost of an official appraisal generally ranges between €300 and €500, depending on the size and type of the property. Traditionally, banks in Spain grant a standard financing amount equal to a maximum of 60% of the purchase price or the appraised value (applying whichever percentage is lower) for non-residents, and up to 80% for residents.

Notary Fees (Notaría)

The presence of a public notary is mandatory to grant authenticity and legal security to the purchase-sale contract through the signing of the public deed (Escritura). The fees charged by notaries in Spain are not established arbitrarily; instead, they are regulated by national law (specifically, they are regulated in Royal Decree RD 146/1989).

To know the exact cost of the notary when buying a home, you must consider the official value of the property stated in the deeds, the number of pages in the document, and the maximum legal discounts that each notary could apply (notaries are allowed to offer a maximum discount of 10%). As a reference point, for a property valued at €100,000, the notary cost will be around €600.

Document Registration Expenses in the Property Registry (Registro de la Propiedad)

After signing the deeds at the notary, it is absolutely necessary to officially record the new ownership in the local Property Registry. This step protects you legally against any subsequent claims from third parties.

Just like notary fees, the registry tariffs are established by legal regulations and depend directly on the value of the real estate. On average, the registration fee for a home ranges from approximately 400 to 650 euros.

Conclusion and Recommendation

Calculating all of these taxes and commissions correctly before signing a reservation contract will save you from unpleasant surprises and guarantee a stress-free transaction. At PLANET VILLA, our team of specialized advisers is at your disposal to provide a complete and personalized financial simulation for your desired property, guiding you step-by-step through the entire bureaucratic process in Spain.