Buying Property In Spain: The Taxes 

Buying Property In Spain: The Taxes 

When you’re buying a property in Spain, taxes are an important cost that it’s easy to forget to factor in when you’re totalling up your budget. The additional costs accrued by taxes can usually be up to around about 8% for resale and 10% for a new build property, however, we generally advise buyers to budget between 13% - 14% overall and this will include land registry fees, notary, solisitosrs fees. These additional costs can vary depending on the region. 

Of course, nobody enjoys calculating tax (and paying it even less so!) which is why we’ve created this convenient guide to the tax on buying property in Spain, so you can stay one step ahead of the game and ensure that you’re not blindsided by unexpected expenditure. 

The fundamentals of Spanish property tax 
 

The amount of tax you pay when you buy a property in Spain and the way it all works varies depending on the type of property you purchase - specifically, whether you choose to purchase a resale property or a brand-new home. Let’s take a look at the differences between the two and how this can impact your expenses. 

When a property is referred to as ‘new’, it typically means that the home hasn’t been lived in by anyone prior to you, and is generally sold on by the property developer themself rather than a current homeowner. 

In the case of a new property purchase, the value-added tax usually comes to around 10% of the price of purchasing the property. In addition, legal documentation tax comes to 1.5% of the property's cost. Added together, therefore, you can expect to pay around 11.5% of the original price of the property in tax. 

What about resale properties? This one is a little more complicated. ‘Resale’ means that you aren’t the property’s first buyer, and that someone has bought it from the developer prior to yourself. This doesn’t just refer to previous tenants; it can also mean homes that have been bought out by institutions such as banks, for example. 

There is only one tax when you’re buying a resale property in Spain. This is named ‘transfer tax’, and in this area, it's 8% on property price.

For example, in the Costa Del Sol, you can expect to pay 8% of tax if your property costs as much as €400,000, 9% for up to €700,000 and 10% for over €700,000. This means that resale properties generally work out cheaper than new builds in terms of taxes. 

Bear in mind, however, that you can also expect to pay transfer tax on things other than property, such as garage space. This can reach up to 10% if your garage space costs over €50,000, 9% for spots up to €50,000 and 8% for spots up to €30,000. 

Other added costs
 

As mentioned above, when you buy a property in Spain, taxes aren’t the only added expense. There are a few other less expensive service fees that you will need to pay to keep the process running smoothly. This can include legal and notary fees, land registry fees and others. To find out more about this, read our full guide to the costs of buying a property in Spain here. 

The importance of choosing a reliable estate agent 
 

Choosing the right estate agent is key to making sure that your property hunt runs smoothly. Mercers are here to help you every step of the way, and we’re more than pleased to answer any questions regarding taxes or any further property fees. Get in touch with our friendly team today.