✓Quick Answer
For new build properties, expect 11.5% on top of purchase price: 10% VAT (IVA) plus 1.5% stamp duty (AJD). Add €3,000-5,000 for notary, registry, and legal fees. Annual costs include IBI (property tax) of 0.4-1.1% of cadastral value, plus community fees if applicable.
Understanding the true cost of buying property in Spain prevents surprises and helps you budget accurately. This guide covers every expense from initial deposit to ongoing ownership costs, with specific focus on new build properties in the Valencian Community (Costa Blanca) and Murcia region.
Purchase Taxes - New Build vs Resale
New Build Properties (from developer):
IVA (VAT): 10% of purchase price
AJD (Stamp Duty): 1.5% in Valencia, 2% in Murcia
Total tax: 11.5-12% of purchase price
Resale Properties (from private seller):
ITP (Transfer Tax): 10% in Valencia, 8% in Murcia
No VAT applies
Total tax: 8-10% of purchase price
Example - New Build €300,000:
IVA (10%): €30,000
AJD (1.5%): €4,500
Total taxes: €34,500
Example - New Build €300,000:
IVA (10%): €30,000
AJD (1.5%): €4,500
Total taxes: €34,500
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Legal & Professional Fees
Notary Fees:
Regulated by government
Typically €600-1,500 depending on property price
Covers deed preparation and signing
Land Registry:
Inscription of your ownership
Usually €400-800
Based on property value
Lawyer/Solicitor:
Essential for foreign buyers
Typically 1% of purchase price (€3,000-5,000 minimum)
Includes: contract review, due diligence, NIE assistance, completion attendance
Gestor (Administrative agent):
Optional but useful
€300-500
Handles utility connections, tax registrations
Bank charges:
Account opening: Usually free
International transfers: €20-50 per transfer
Mortgage arrangement: 1% of loan if applicable
Bank charges:
Account opening: Usually free
International transfers: €20-50 per transfer
Mortgage arrangement: 1% of loan if applicable
Ongoing Annual Costs
IBI (Impuesto sobre Bienes Inmuebles):
Annual property tax
0.4% to 1.1% of cadastral value
Cadastral value is typically 30-50% of market value
Example: €200,000 property = €400-800/year
Rubbish Collection (Basura):
€50-150/year depending on municipality
Sometimes included in IBI
Community Fees:
If in urbanization or apartment block
€50-300/month typical
Covers: gardens, pool, security, building insurance
Home Insurance:
€200-500/year for standard cover
Required if you have a mortgage
Non-Resident Income Tax:
If not renting: 1.1% of cadastral value × 19% = approx 0.21%
If renting: 19% of net rental income (EU citizens) or 24% (non-EU)
Non-Resident Income Tax:
If not renting: 1.1% of cadastral value × 19% = approx 0.21%
If renting: 19% of net rental income (EU citizens) or 24% (non-EU)
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Utility Costs
Electricity:
Connection fee (new build): €200-400
Monthly: €50-150 depending on usage and AC
Standing charge: €10-20/month
Water:
Connection fee: €100-200
Monthly: €20-50
Higher in summer (pool, garden)
Gas (if applicable):
Not common in Costa Blanca
Bottled gas for cooking: €15-20 per bottle
Internet/Phone:
Fibre packages: €30-60/month
Good coverage in most areas
Pool Maintenance (if private):
€100-200/month
Or €50-100 if maintaining yourself
Pool Maintenance (if private):
€100-200/month
Or €50-100 if maintaining yourself
Complete Cost Breakdown Example
Property price: €350,000 (new build)
One-time purchase costs:
IVA (10%): €35,000
AJD (1.5%): €5,250
Notary: €1,000
Registry: €600
Lawyer (1%): €3,500
Gestor: €400
Bank account setup: €100
NIE processing: €150
Total one-time: €46,000 (13.1%)
Annual ongoing costs:
IBI: €600
Basura: €100
Community fees: €1,800 (€150/month)
Insurance: €350
Non-resident tax: €300
Total annual: €3,150
Utilities (estimated annual):
Electricity: €1,200
Water: €360
Internet: €480
Total utilities: €2,040
Utilities (estimated annual):
Electricity: €1,200
Water: €360
Internet: €480
Total utilities: €2,040
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Tax Tips for Buyers
Claiming back VAT:
Not possible for residential property buyers
Only applies to commercial properties
Becoming tax resident:
Consider implications carefully
Spanish tax residents pay tax on worldwide income
Consult a tax advisor before deciding
Non-resident tax obligations:
Annual modelo 210 declaration required
Even if property is empty, tax is due
Based on "imputed income" from cadastral value
Capital gains when selling:
19% on gains for EU residents
3% retention at sale for non-residents
Various allowances and deductions available
Inheritance planning:
Spanish succession tax applies to Spanish assets
Rates vary by region and relationship
Early planning can significantly reduce liability
Inheritance planning:
Spanish succession tax applies to Spanish assets
Rates vary by region and relationship
Early planning can significantly reduce liability
The Bottom Line
Budget approximately 13-14% on top of the purchase price for a new build property. Annual running costs vary but expect €3,000-5,000 for a typical villa. Working with a good lawyer ensures all taxes are paid correctly and you understand your ongoing obligations as a Spanish property owner.
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