Hidden Costs Buying Property Spain Budget 10-15% Extra

The 10-15% Rule: Never Budget Just the Purchase Price

The golden rule of buying property in Spain:

Resale property: Purchase price + 10-12% New build property: Purchase price + 12-15%

Example on €200,000 property:

• Resale: €200,000 + €20,000-24,000 = €220,000-224,000 total
• New build: €200,000 + €24,000-30,000 = €224,000-230,000 total

Why the difference?

• Resale pays ITP (transfer tax): 6-11%
• New builds pay VAT (10%) + Stamp Duty (1.5%)
• New builds often have more legal complexity

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Complete Cost Breakdown: Every Fee Explained

1. Transfer Tax (ITP) - 6-11% of Purchase Price

Applies to: Resale properties only Cost: Varies dramatically by region

What it is:

• Impuesto sobre Transmisiones Patrimoniales
• Tax on the transfer of ownership
• Paid by the buyer
• Due within 30 days of signing

Regional ITP rates (2025):

Example costs on €200,000 resale:

• Madrid: €12,000 (6%)
• Valencia: €20,000 (10%)
• Barcelona: €20,000-22,000 (10-11%)

Critical note: Tax is calculated on the higher of:

• Actual purchase price
• Official valuation (valor de referencia)

Don't try to underreport the price—authorities will catch it.

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2. VAT + Stamp Duty (New Builds Only)

Applies to: New build properties only Cost: 10% VAT + 1.5% AJD (Stamp Duty) = 11.5% total

What it is:

• IVA (VAT): 10% on new builds
• AJD (Actos Jurídicos Documentados): 1.5% stamp duty
• Can't be negotiated
• Included in developer's payment structure

Example on €200,000 new build:

• VAT: €20,000 (10%)
• Stamp Duty: €3,000 (1.5%)
• Total: €23,000

Why new builds cost more:

• Higher total tax (11.5% vs 6-10% ITP)
• Plus all the other fees below
• Total usually 12-15% above purchase price

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3. Notary Fees - €600-1,500

Applies to: All purchases Cost: Fixed by law, scales with property value

What it is:

• Notario (notary public) oversees the signing
• Legally required—can't skip this
• Ensures legal validity of the deed
• Both buyer and seller attend

Typical costs by property value:

• €100,000 property: €600-800
• €200,000 property: €800-1,200
• €400,000 property: €1,200-1,500
• €1,000,000+ property: €1,500-2,500

Can't be negotiated:

• Fees are set by government
• Same across all notaries
• Buyer usually pays (but negotiable)

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4. Property Registry Fees - €400-800

Applies to: All purchases Cost: €400-800 depending on property value

What it is:

• Registro de la Propiedad
• Registers you as the legal owner
• Creates public record of ownership
• Required to sell property later

Why essential:

• Without registration, you don't legally own it
• Can't get mortgage
• Can't sell property
• Can't prove ownership in disputes

Typical costs:

• €100,000 property: €400-500
• €200,000 property: €500-650
• €400,000 property: €650-800

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5. Lawyer Fees - €1,000-3,000

Applies to: All purchases (HIGHLY RECOMMENDED) Cost: Typically 1-1.5% of purchase price + VAT

What it is:

• Independent lawyer (abogado)
• Represents YOUR interests (not the seller's)
• Essential due diligence
• Reviews all documentation

What your lawyer does:

• Checks property registry (ownership verification)
• Verifies no debts or liens on property
• Reviews purchase contract
• Checks planning permissions
• Ensures legal compliance
• Attends signing with you
• Registers property in your name

Costs:

• €100,000 property: €1,000-1,500
• €200,000 property: €1,500-2,500
• €400,000 property: €2,000-3,500
• Hourly rate: €150-300/hour for complex cases

NEVER skip this cost:

• Buying without a lawyer is financial suicide
• Too many scams and legal issues
• €1,500 spent here can save €50,000+ in problems

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6. Gestoría Fees (Optional) - €300-600

Applies to: All purchases Cost: €300-600

What it is:

• Administrative assistance
• Handles paperwork and bureaucracy
• Not legally required but very helpful

What gestoría does:

• Files tax payments
• Processes registration
• Liaises with authorities
• Chases paperwork
• Saves you time and stress

Worth it?

• Yes if you don't speak Spanish
• Yes if you're not in Spain during purchase
• Maybe skip if you have good lawyer handling everything

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7. NIE Application - €12

Applies to: Foreigners only Cost: €12 (Modelo 790 fee)

What it is:

• Número de Identificación de Extranjero
• Tax ID number for foreigners
• Required before you can buy property

Process:

• Apply before purchase
• Allow 2-4 weeks
• Or pay gestoría €100-200 to expedite

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8. Nota Simple (Property Registry Search) - €9-20

Applies to: All purchases Cost: €9-20 per search

What it is:

• Official extract from property registry
• Shows current owner
• Lists any mortgages/liens
• Essential due diligence

When you need it:

• Before making offer (verify seller owns it)
• Before signing contract (check for debts)
• Your lawyer will obtain this

Critical check:

• Ensures seller actually owns the property
• No hidden mortgages
• No legal claims or liens
• Building permissions are valid

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9. Property Valuation (If Getting Mortgage) - €250-400

Applies to: Buyers using mortgage Cost: €250-400

What it is:

• Tasación (official valuation)
• Required by bank for mortgage
• Independent valuer assesses property
• Bank lends based on this value, not purchase price

Important:

• If valuation is lower than purchase price, you get less mortgage
• Bank arranges this
• You pay the fee
• Takes 1-2 weeks

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10. Mortgage Arrangement Fee (If Financing) - 0.5-1.5%

Applies to: Buyers using mortgage Cost: 0.5-1.5% of loan amount

Example costs:

• €100,000 mortgage: €500-1,500
• €200,000 mortgage: €1,000-3,000

Other mortgage costs:

• Bank setup fees: €300-600
• Mortgage notary: €400-800
• Mortgage registry: €300-500
• Total mortgage costs: 1-2% of loan amount

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11. Home Insurance - €200-500/year

Applies to: All properties (required if mortgage) Cost: €200-500 annually

What it covers:

• Building structure
• Contents (optional extra)
• Public liability
• Natural disasters

Required:

• Mandatory if you have mortgage
• Recommended even without mortgage

Costs vary by:

• Property value
• Location (coastal = higher)
• Construction type
• Coverage level

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12. Annual Property Tax (IBI) - €300-2,000/year

Applies to: All properties Cost: €300-2,000 annually (prorated at purchase)

What it is:

• Impuesto sobre Bienes Inmuebles
• Annual property tax (like UK council tax)
• Paid to town hall
• Prorated between buyer/seller at purchase

Example annual costs:

• Small apartment: €300-600/year
• Medium house: €600-1,200/year
• Large villa: €1,200-3,000/year

At purchase:

• Seller pays up to closing date
• You pay from closing onwards
• Prorated daily

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13. Community Fees (If Apartment/Urbanization) - €50-300/month

Applies to: Apartments and urbanizations Cost: €50-300/month

What it covers:

• Building maintenance
• Communal areas (pools, gardens)
• Security
• Lifts
• Cleaning

Critical check before buying:

• Ask for community fee amount
• Check if community has debts
• YOU become liable for community debts if not checked
• Your lawyer should verify this

Annual cost:

• Budget €600-3,600/year
• Paid monthly or quarterly

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14. Utilities Setup - €200-500

Applies to: All purchases Cost: €200-500 one-time

What you need to set up:

• Electricity (€50-100 connection)
• Water (€50-100 connection)
• Gas (if applicable: €50-150)
• Internet/phone (€0-100)
• Garbage tax (€50-200/year)

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Hidden Surprise Costs (That Catch Buyers Out)

Plusvalía Municipal Tax

What it is:

• Capital gains tax on land value increase
• Technically seller pays
• Often negotiated onto buyer

Cost:

• €500-5,000 depending on property location and holding period
• Your lawyer should clarify who pays

Outstanding Community Debts

The trap:

• Previous owner didn't pay community fees
• New owner becomes liable
• Can be €5,000-20,000 in extreme cases

Protection:

• Your lawyer MUST check this
• Community president must provide debt certificate
• Withhold money until verified clear

Illegal Extensions/Modifications

The problem:

• Previous owner built extension without permission
• Pool without permit
• Closed-in terrace
• YOU inherit the legal problem

Consequences:

• Fines: €3,000-30,000
• Forced demolition
• Can't get mortgage
• Can't sell property easily

Protection:

• Lawyer checks all planning permissions
• Compare built area to legal paperwork
• Architect survey for expensive properties

Rural Property Issues

Extra complications:

• Water rights (€5,000-15,000 to connect)
• Access rights (may not legally have road access)
• Agricultural restrictions (limits on building)
• Protected land status

Protection:

• Rural properties need specialist lawyer
• Survey all utilities and access
• Budget €10,000-30,000 for utilities if not connected

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Cost Comparison: Resale vs New Build

Resale Property (€200,000 example)

New Build Property (€200,000 example)

Verdict: New builds cost 2-3% more in taxes and fees.

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First Year Costs Beyond Purchase

Don't forget ongoing costs in your first year:

Budget accordingly:

• Minimum €5,000 for first year
• Realistic €10,000-15,000 if furnishing

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Regional Variations: Complete Table

Total Buying Costs by Region (€200,000 resale property):

Costs include ITP + notary + registry + lawyer + gestoría + misc fees

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How to Minimize Costs (Legally)

1. Negotiate who pays what:

• Traditionally buyer pays all
• You can negotiate seller covers some fees
• Common in buyers' markets

2. Shop around for services:

• Lawyers vary €1,000-3,000
• Get 3 quotes
• Don't cheap out on quality

3. Choose region wisely:

• Madrid (6% ITP) vs Valencia (10%) = €8,000 saved on €200,000
• Significant if choosing between similar properties

4. Timing:

• Prices lower in winter
• Less competition November-February

5. Don't try to dodge taxes:

• Underreporting price is illegal
• Tax authorities will catch it
• Fines are 50-100% of tax evaded
• Not worth the risk

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Common Buyer Mistakes

1. Budgeting only the purchase price

• Reality check: Budget 10-15% extra

2. Skipping the lawyer

• "Saving" €2,000 costs you €50,000 in hidden problems

3. Not checking community debts

• You become liable for previous owner's debts

4. Forgetting ongoing costs

• IBI + community fees + insurance = €2,000-4,000/year minimum

5. Using seller's lawyer

• They represent the seller, not you
• Get your own independent lawyer

6. Not getting nota simple

• €15 check can reveal €50,000 in hidden mortgages

7. Underestimating renovation costs

• "Needs updating" often means €20,000-50,000

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Conclusion

Buying property in Spain is not just the purchase price. Between transfer taxes, notary fees, legal costs, and various other charges, you must budget an additional 10-15% above the asking price—and that's before you consider ongoing annual costs.

Key takeaways:

Exact example (€200,000 Valencia resale):

• Purchase price: €200,000
• ITP (10%): €20,000
• Notary: €1,000
• Registry: €600
• Lawyer: €2,000
• Gestoría: €400
• Misc: €100
• Total needed: €224,100
• Budget €225,000-230,000 to be safe

Next steps:

1. Calculate your specific costs using the tables above
2. Add 10-15% to your property budget
3. Find an English-speaking lawyer (€1,500-2,500)
4. Request nota simple on any property you're serious about (€15)
5. Factor in €5,000-10,000 for year one ongoing costs

Don't let hidden costs derail your Spanish property dream. Budget correctly from the start, hire professionals, and you'll avoid the nasty surprises that catch out underprepared buyers every day.

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Related Guides:

• Spanish Property Transfer Tax (ITP) by Region
• Mortgage Spain Non-Resident: Complete Guide
• NIE Appointment Spain: How to Book

Need Help? Browse our complete property buying checklist for step-by-step guidance through the entire purchase process in Spain.