Spain Explained

Setting your budget for buying in Spain

Last updated on October 28th, 2019 at 04:31 pm.

The market for foreign investment in Spain is a healthy one at the moment. Some of the latest figures on house purchase by foreigners paint a very good picture:

  • In June 2013 the number of Spanish property purchases by foreign buyers increased by 31.5% from that of the previous year
  • The Russian market was responsible for 1,338 non-resident purchases – making it the third largest market behind the French (1,641) and British (2,076)
  • 694 Russian families chose to make Spain their home in 2013
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Why so great an interest from foreigners? The economic downturn meant that properties, at all levels, saw a reduction in the asking price. This, along with increased confidence in Spain and more favourable residency terms, has meant a much more positive outlook for those considering purchasing here.

So, if you haven’t bought already, now is an ideal time, as plenty of your compatriots have already decided. Perhaps your next question is, what can I expect to pay?

It’s not just the cost of the property itself but the additional costs of the purchasing process that need to be taken into consideration. It is best to be clear from the outset what the extras will be. With this knowledge you can make sure that you build into your budget plan an allowance for expences and avoid any unpleasant surprises.

In this article we aim to clarify what the real cost of purchasing your property in Spain might be.

External costs

The largest external costs are for the Spanish Notary and the Spanish Land Registry.

The Notary is a professional within the Spanish law system whose main function is to certify Spanish documents ensuring that private agreements fulfil certain legal criteria. The Spanish notary is involved in legalising contracts and uses a stamp and signature to endorse them.

The scale of charges is fixed by law and the actual amount to be paid will depend on the extent of the legal provisions of the Title Deeds. As a guide we would say that charges normally start at 800 Euros.

The Spanish Land Registry (Registro de la Propiedad) is an official registry that protects the rights of the owners of a Spanish property. The title deed must be inscribed in the local land registry. The fee depends on the value of the property but normally starts at 400 Euros.

There are other additional expenses that apply in some cases depending upon individual circumstances. For example, if you have never had a fiscal interest in Spain before, you will need an NIE number before you can open a bank account or purchase your property.

You will also need a power of attorney if you are unable to be here in person and need to appoint an adviser you trust in Spain to act on your behalf.


In addition to the external expenses there are also taxes to pay. The taxes are dependent on whether the property is new or second hand.

New property requires the payment of IVA (Impuesto sobre el Valor Añadido). This is a tax that applies to the purchase of a brand new property and is currently set at 10% of the purchase price of the property.

In addition, you will have AJD to pay (Actos Juridicos Documentado). The cost of this varies depending upon where your property is located. For example, if you are buying in the Comunidad Valenciana it amounts to 1.5% of the purchase price.

Second hand property requires the payment of ITP (Impuesto de Transmisiones Patrimoniales). This is a transfer tax which varies according to where your property is located. For example, in the Comunidad Valenciana it amounts to 10% of the purchase price of the property. It is charged instead of the IVA which is levied on new property.

Where a resale property is sold by a non-resident it is usual practice for 3% of the purchase price to be retained by the lawyer acting on behalf of the buyer. This is a legal requirement and is paid to the Spanish tax authority. It covers the potential capital gains tax liability on the part of the vendor.

This 3% retention is not paid by the buyer but you should be aware that your lawyer will be involved in the transaction if you purchase from a non-resident.

Both new and second hand properties are also subject to Plusvalía (Impuesto sobre el Incremento del Valor de los Terrenos). This tax is paid on the increase in the value of the land and the exact percentage is decided by the local tax authority. It varies according to location, the time elapsed since the last transfer of title and the land size. The Plusvalía is legally the responsibility of the vendor.

Legal fees for the purchasing process

Finally, you will need to build in the cost of the legal fees for the purchasing process. It is important that you ensure that your interests are represented throughout. An independent lawyer will give you advice and the reassurance that legalities are checked on your behalf during the buying process.

Make sure that whoever you entrust with this very important transaction places your needs first and does not have a conflict of interests with other parties.

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You should be able to communicate clearly with your lawyer who will ideally be a native language speaker. He/ she should be part of a respected and trusted firm, specialising in Spanish property law.

The adviser will provide you with a personalised quote with no obligation. This is an all inclusive figure that takes into account all aspects of the sale. The fees set will need to be balanced against any risks there might be if you are tempted to cut corners.

Relax and enjoy

It can seem a little daunting when you first reflect on the additional costs that purchasing your dream house in Spain can incur. However, with the right advice from someone you trust the work will be done for you and all that remains is to relax and enjoy your new home in Spain.

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