Buying Costs in Spain

Buying Costs in Spain

It can be a daunting prospect buying a home in Spain. A Place in the Sun Currency has helped thousands of people to buy their property in Spain successfully. Here is his checklist of the main costs involved and the different elements you need to be aware of to buy safely.

What costs are involved in buying a property in Spain?

The costs involved in buying a property in Spain vary, depending on several factors: if it is a new build or a resale property, the actual purchase price of the property, and whether you are a cash buyer or buying with a mortgage.

You should generally allow 10-15% of the purchase price to cover all taxes and fees.

These (in 2024) will include:

  • For a resale property, transfer tax (ITP) needs to be paid; this is usually levied at 8% across all of Spain (including the Spanish islands), but in Costa Blanca (except Murcia), this will be 10%.
  • Notary fees - typically €800-€900 plus €250 admin fee.
  • Land Registry fees - roughly half the cost of notary fees.
  • Independent lawyer fees could be €1,500-€2,000.
  • Valuation fees are around €350.
  • Mortgage set-up fee is typically 1% of the capital loan (if you are buying with finance) plus €350 admin fee.
  • On new-build there’s VAT of 10%, plus stamp duty, which varies per region (Valencia is 1.5%).  
  • Other costs involved would be the house insurance and life insurance if applicable, as some banks condition their mortgage offer to the engagement of such services.

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Are there any ongoing costs?

There are also ongoing costs for any property in Spain, such as IBI (similar to a community charge), home insurance, maintenance, and utility costs. If you decide to buy to let, or plan to let your home out to tourists, you will attract an income, which can be good in popular areas of Spain.

It is important to remember that more and more local authorities require you to apply for a licence to let any property out to tourists, so you should consult your agent about this before buying a property for this purpose.

Remember that Income Tax will need to be paid on any rental income, whether you are resident in Spain or the UK.

Beware hidden costs!

In addition to these extra costs, as a non-resident, you will need a tax identification number (NIE) to buy property. This is issued by the General Directorate of the Police, and must be used on all tax returns and communications addressed to the tax authorities.

This should be processed before completion and you are not able buy a property in Spain without one.

Maximise your budget

With all these different costs to factor into your budget, you need to ensure you are getting the most for your money when transferring funds to Spain. An experienced currency specialist can discuss your budget, exact requirements and the different costs with you and help protect your money from adverse currency rate fluctuations.

You can protect your money by taking advantage of a Forward Contract, locking in the exchange rate when favourable and at a time that suits your needs.

You can also set up a Regular Payments Plan, to ensure you know exactly what you are paying for any ongoing payments and know when they are going out.

By making use of the specialist knowledge of a currency trader, you can maximise your budget and plan with price certainty, always knowing how much you are paying in both sterling and euros.

Further reading: The Three Essential Steps to Buying Property Abroad.

If you are planning to buy a property in Spain and would like to discuss your plans with a currency expert, open a free account with A Place in the Sun Currency.

The account is free, there's no obligation to trade, and opening an account gives you access to your own experienced trader, who can guide you through the whole process and discuss the best currency strategy to suit your needs and get the most for your money.

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Liz Rowlinson