The Real Cost of Buying Property in Spain

This was the bit that surprised us most. We had a budget for the property. We hadn't really thought through what the taxes and fees on top would add up to. On the Costa del Sol, that is a significant amount of money, and I really want you to know exactly what it is before you commit to anything. Buying property in Marbella or anywhere in Andalusia means budgeting for more than the asking price, and the sooner you build this in, the better.

The Full Cost Breakdown

Property Transfer Tax (ITP): 7 per cent of purchase price

ITP is the largest additional cost when buying a resale property in Andalusia. At 7 per cent of the purchase price, it is charged on the declared value of the property and must be paid within 30 working days of signing the deed at the notary.

On a €400,000 property: €28,000 On a €700,000 property: €49,000

This is not a fee you can negotiate away or choose to pay later. It is a legal obligation.

Notary Fees: approximately 0.1 to 0.5 per cent

The notary charges a fee for their services at completion. The amount is regulated and varies based on the complexity and value of the transaction. On most residential purchases it falls between €600 and €1,500.

Land Registry Fees: approximately 0.1 to 0.25 per cent

Registering the property in your name at the land registry costs approximately €400 to €1,000 depending on the purchase price.

Property Lawyer Fees: approximately 1 per cent (plus VAT)

A qualified independent property lawyer typically charges around 1 per cent of the purchase price plus Spanish VAT (IVA at 21%). On a €500,000 property, budget approximately €6,050 for lawyer fees.

Gestor Fees: €300 to €1,500

A gestor is an administrative professional who handles paperwork with Spanish authorities. Your lawyer may use a gestor, or you may need to appoint one separately for specific tasks.

Mortgage Arrangement Fees: if applicable

If you use a Spanish mortgage, you will also pay arrangement fees, valuation fees, and potentially mortgage stamp duty. Fees vary by lender.

New Build vs. Resale: Different Tax Rules

The 7 per cent ITP figure applies to resale properties (second-hand). New build properties in Spain have a different tax structure:

• IVA (VAT): 10 per cent of the purchase price
• AJD (Stamp Duty): 1.2 per cent in Andalusia

Total tax on a new build in the Marbella area: approximately 11.2 per cent of the purchase price. There are new developments across Marbella, Estepona, Benahavís and along the Costa del Sol, so it's worth understanding which tax applies to the type of property you're buying.

Pre-Completion Costs

Before completion, you will also spend money on: - Flights and accommodation for viewings - Reservation fee (€3,000 to €10,000, typically deducted from the purchase price at completion) - Survey or structural survey: optional but recommended, approximately €500 to €1,500 - Translation costs if needed for documents

These costs are real even if your purchase does not proceed. Factor them in.

Ongoing Ownership Costs

Once you own the property, annual costs include: - IBI (local property tax): 0.4 to 1.1 per cent of cadastral value per year - Community fees (comunidad): varies hugely, from €1,500 to €10,000 or more per year depending on the development - Basura (waste collection tax): approximately €100 to €200 per year - Non-resident income tax (if not Spanish resident): 19 to 24 per cent on imputed rental income even if you don't rent - Buildings insurance: €500 to €2,000 per year depending on the property

The Number to Use When Budgeting

Add 12 per cent to your maximum property budget to arrive at your true purchase cost. If your budget is €500,000 for the property, you need €560,000 total to complete the purchase comfortably. I know it's a lot. But it's much better to know this now than discover it three months into the process.

PlanMarbella.com includes a full cost calculator as part of your free buying plan. Enter your budget and target price and it shows you the exact tax and fee breakdown before you commit to anything.