The price of a home is not the cost of a home. Buyers who budget only to the asking figure are the ones who feel ambushed at completion. Here is the shape of it, honestly, with the caveat that rates and reliefs change and your lawyer or tax adviser must confirm your own position.
Costs at purchase
Resale purchases attract transfer tax; new-build purchases from a developer attract VAT plus stamp duty instead. On top of either sit notary fees, land registry fees and legal fees.
The practical planning rule most buyers use is to set aside a meaningful allowance above the purchase price for these combined costs, and to have your lawyer quantify it precisely for the specific property before you sign anything.
- Transfer tax on resale, or VAT plus stamp duty on new build
- Notary and land registry fees
- Independent legal fees
- Mortgage arrangement and valuation costs, if borrowing
Annual running costs
Once you own, the recurring items are municipal property tax, rubbish collection, community fees where applicable, utilities, insurance and, for non-residents, an annual non-resident tax return.
Community fees vary enormously and are worth scrutinising. A gated estate with security, gardens and pools costs materially more to run than a small building, and that difference is permanent.
When you sell
Sellers face capital gains tax on any profit and the municipal plusvalía on the increase in land value. Non-resident sellers also have a percentage of the sale price retained at completion and applied against their tax liability.
Keeping every invoice for improvement works matters here, because qualifying costs can affect the gain calculation. Most sellers who lose money on this simply did not keep the paperwork.
Why we do not publish a single percentage
Because it would be wrong for most readers. Rates differ by region, by property type, by whether the seller is resident, and by reliefs that change. Any adviser quoting one universal figure is simplifying at your expense.
We would rather give you the structure, then have your lawyer put real numbers against your actual purchase.
Are purchase costs higher on new build or resale?
They are calculated differently. New build carries VAT plus stamp duty; resale carries transfer tax. Which works out higher depends on the property and current rates, so it should be modelled case by case.
Do non-residents pay annual tax on a Spanish home they do not rent out?
Non-resident owners are generally required to file an annual return even where the property is not let. Your tax adviser will confirm what applies to you.
What is plusvalía?
A municipal tax on the increase in the value of the land, payable on sale. It is separate from capital gains tax.
Every property answers these questions differently.
Send us the property you are considering and we will help you understand the true all-in figure.
Ask for a cost breakdown