Buying property in Spain costs 8-15% of purchase price: IVA 10% (new builds), AJD 1.5% (Valencia), notary €600-1200, registry €400-700, lawyer 1%, mortgage arrangement fees. On a €250,000 property, expect €30,000-35,000 total acquisition costs.
One of the biggest surprises for international property buyers in Spain is the hidden costs beyond the purchase price. Unlike some countries, Spain's acquisition costs are substantial and must be factored into your budget from day one. In 2026, these costs remain significant but predictable. This comprehensive guide breaks down every expense you'll encounter when buying property in Spain, providing worked examples so you can accurately calculate your total investment.
IVA (VAT) on New Build Properties
IVA (Impuesto sobre el Valor Añadido) is the standard 10% VAT applied to new build properties sold directly by developers in Spain. This is calculated on the property's sale price and is a mandatory tax. Unlike second-hand properties where there's no VAT but instead a higher stamp duty, new build buyers pay this 10% tax at completion. On a €250,000 new build property, you'll pay €25,000 in IVA. Some developments offer developers absorbing limited IVA, but this is increasingly rare in 2026. The tax is payable within 30 days of completion and is typically handled through your lawyer. VAT applies to the entire construction including land portion, making it a substantial cost to account for.
Transmisiones Patrimoniales (AJD) for Second-Hand Properties
When buying second-hand property (resale), you pay Transmisiones Patrimoniales (TP) instead of VAT. In the Valencia region, this tax is 1.5% of the property purchase price (one of Spain's lowest rates). In other regions, rates range from 3-11%. You also pay Actos Jurídicos Documentados (AJD) on the deed, typically 0.6-1% depending on region. On a €250,000 second-hand property in Valencia, you'd pay €3,750 in TP plus approximately €1,500-2,500 in AJD. This combined 2.1-2.6% is significantly less than the 10% VAT on new builds, making second-hand properties appear cheaper at purchase—though they lack the developer guarantees and modern standards of new build properties.
Notary Fees (Notaría)
The notary is a crucial part of Spanish property transactions, witnessing and authenticating the deed (escritura). Notary fees are fixed by government scale based on property value, not negotiable. For a €250,000 property, expect €800-1,200 in notary fees. The scale is: 0-€6,000: 0.50%, €6,001-€30,000: 0.30%, €30,001-€600,000: 0.20%, €600,001+: 0.10%. Additional costs include authentication fees (€50-100) and deed copies (€5-10 per copy). You'll need multiple certified copies for mortgage companies and future transactions. The notary also handles tax withholding paperwork and produces official documentation. Choosing a notary near your property may cost slightly less due to reduced travel time charges. Budget an additional 10-15% on the scale amount for administrative fees and copies.
Land Registry Costs (Registro)
Registro de la Propiedad (Land Registry) costs are required to officially record ownership. Fees are scale-based similar to notary fees, ranging €400-700 for a €250,000 property. The registry charge: €0-€6,000: 0.50%, €6,001-€30,000: 0.30%, €30,001-€600,000: 0.15%. Additional registry costs include presentation fee (€50-70), copies (€5-10 each), and any title searches. The registration process takes 2-4 weeks after completion, and you'll receive an official certificate. First-time Spanish property owners often need 2-3 certified copies, adding €20-50 to costs. Registry fees are among the smallest components but are mandatory. Your lawyer typically pays this on your behalf and includes it in final invoices.
Lawyer Fees and Legal Representation
Hiring a lawyer (abogado) is highly recommended though not legally mandatory. Lawyers typically charge 1-1.5% of purchase price for a straightforward transaction, meaning €2,500-3,750 on a €250,000 property. Some lawyers offer flat fees (€800-2,000) for standard conveyancing. Lawyer services include: due diligence checks on the property, reviewing developer contracts, ensuring clean title, mortgage condition management, tax advice, attending completion, and handling post-completion registration. English-speaking lawyers specializing in foreign buyer transactions command premium rates (€3,000-5,000+). For complex situations (disputed ownership, lender requirements, company ownership), expect additional €500-2,000 fees. Lawyer fees are separate from notary/registry and are typically paid at completion. Your lawyer coordinates with all parties—developer/seller, notary, registry, and mortgage company.
Mortgage Arrangement Fees
If financing your purchase with a Spanish mortgage, expect additional costs. Most banks charge an arrangement fee of 0.5-1.5% of the loan amount, typically €1,000-3,500 on a €250,000 property with 60% LTV (€150,000 loan). Other mortgage costs include: property valuation (€300-500), appraisal survey (€600-1,000), title insurance/mortgage insurance (€500-1,500), and mortgage deed registration fees (€150-300). Total mortgage-related costs often reach €3,000-5,000. Non-residents should budget additional €300-500 for non-resident tax documentation. Some banks offer low/zero arrangement fees but compensate through higher interest rates. Fixed-rate mortgages may cost €200-500 more in structuring fees than variable-rate mortgages. New mortgage legislation in 2026 now requires lenders to display full acquisition cost estimates before application, enabling better comparison shopping.
Tax Withholding and Non-Resident Implications
Non-resident property buyers face 3% withholding tax on the net sale price (sale price minus acquisition costs incurred by seller). This is calculated and paid by the notary at completion, requiring certified proof of non-resident status. For a €250,000 property, this could be €5,000-7,500 depending on seller's cost deductions. The withholding is technically the seller's liability but often negotiated between buyer and seller—some agreements split the cost. Non-residents must file a Spanish tax return (Declaración) if they have income from the property, and need a Spanish Tax ID (NIE). EU citizens can now stay longer (18 months) before registering as residents, affecting tax classification. Purchase by UK residents now requires careful analysis of tax residency status due to Brexit rules. Your lawyer should advise on withholding implications and whether you can reclaim excess withholding as a non-resident.
Title Insurance and Supplementary Costs
Title insurance (seguro de título) is recommended, costing €200-800 for a €250,000 property (typically 0.08-0.3% of value). This protects against title defects discovered after purchase, covering legal costs and potential loss. Most lenders require title insurance if mortgaging. Survey/inspection costs typically run €500-1,500 for professional building reports, highly recommended for older properties. NIE registration (Spanish Tax ID) costs €0 but requires legal assistance (€100-300) if using a lawyer. Water/utilities transfer costs €50-200 per service. Homeowner association registration (if applicable) costs €50-300. Translation services for documents average €100-300 per document. Postal forwarding setup costs €30-100 annually. Bank transfer fees to move funds to Spain typically run 0.1-0.5% of transfer amount. All these supplementary costs typically total €1,500-3,500, making them significant when combined.
Complete Cost Breakdown Examples
Purchase price: €250,000 IVA (10%): €25,000 Notary: €900 Registry: €500 Lawyer (1%): €2,500 Mortgage arrangement (if 60% LTV): €1,500 Title insurance: €400 NIE/admin: €300 Survey: €700 Miscellaneous: €200
Purchase price: €250,000 AJD + TP (2.1%): €5,250 Notary: €900 Registry: €500 Lawyer (1%): €2,500 Mortgage arrangement: €1,500 Title insurance: €500 Survey: €900 Non-resident withholding (3%): €7,500 Miscellaneous: €300
Note: Second-hand properties have lower acquisition taxes but aged properties require higher survey costs. New builds offer modern standards but significantly higher upfront tax costs.
Strategies to Minimize Acquisition Costs
Timing negotiations: Buy off-plan (under construction) to avoid the 3% non-resident withholding as you're not buying from a non-resident owner. Developer incentives: Year-end 2026 saw many developers offering to cover 0.5-1% of closing costs to move inventory. Lawyer selection: Spanish lawyers cost 40-50% less than English-speaking specialists for identical services—consider this trade-off. Mortgage timing: Secure pre-approval before negotiating price; lenders' arrangement fees sometimes negotiable with larger loan amounts. Shared costs: Negotiate with seller to split non-resident withholding (common practice). Payment method: Wire transfers directly to Spanish accounts typically cost less (0.1%) than international payment services (0.5-2%). Professional coordination: Using one lawyer to coordinate all services often costs less than using separate specialists. Currency consideration: Lock in favorable exchange rates when converting large sums; fluctuations of 2-3% can mean €5,000-7,500 savings/losses on €250,000 purchases.
2026 Changes and Future Considerations
In 2026, several regulatory changes affect acquisition costs: mortgage transparency rules now require detailed fee disclosure before application, enabling better shopping; non-resident withholding simplified but still applies; notary/registry fee scales slightly increased 0.2% due to administrative cost adjustments; renewable energy incentives in Valencia now offer tax deductions up to €10,000 for properties with solar installations, effectively reducing net acquisition costs. Digital notarization pilots now operate in major cities, potentially reducing processing time from 4 weeks to 10 days. Environmental certification costs have risen €100-200 as compliance requirements expanded. However, mortgage rates improved—Euribor dropped 40 basis points from 2025, reducing overall financing costs for borrowers locking in fixed rates before rates rise. Currency markets remained relatively stable, good news for international buyers. Future 2026-2027 outlook suggests: potential AJD rate increases in some regions (Valencia proposed 2.1-2.5% discussions), stricter non-resident definitions post-Brexit creating unpredictability, and expanded energy efficiency requirements adding €2,000-4,000 to retrofit costs for older properties.
The Bottom Line
Spain's property acquisition costs are substantial—typically 8-15% of purchase price—but completely predictable and transparent. Using our breakdown, you can accurately calculate your total investment for any property. New build properties carry higher upfront taxes (10% IVA) but offer modern guarantees, while second-hand properties in Valencia cost less to acquire (2.1% taxes) but may require renovation investment. The key is budgeting comprehensively and engaging qualified professionals early. We recommend getting three lawyer quotes and confirming all fees in writing before proceeding. Ready to buy? Our team at New Build Homes Costa Blanca can connect you with trusted English-speaking lawyers and help you navigate the complete acquisition process, protecting your investment every step of the way.
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