Investing in Spanish real estate? Keep in mind these costs

For years you have been spinning your nickel and finally you are ready to make your dream come true: a house on the Spanish costas. Every piggy bank has been slaughtered and you have collected and pulled inside out all those socks of change that you have kept under your mattress for years. In short: you’ve done your homework and determined your budget down to the last penny.

Then you will also know how much you have to spend on that dream home under the Spanish sun. But make sure that during your search, you don’t just look at the price of the property, but also keep the other costs in mind. Because even though the purchase price is obviously the most significant cost, there are also many small additional costs that can add up to a hefty sum.

In this blog post, we list those additional costs and give you an indication of the amounts or percentages you should expect to pay. Note that these only serve to give you an idea. Depending on the circumstances and your background, the amounts and percentages may vary. It is therefore crucial to seek legal and tax advice in advance, especially if you are an entrepreneur. This way you will not encounter any unpleasant surprises.

One-time costs

Anyone buying a home in Spain, be it as a second residence or with the idea of moving, should count 12 to 14 percent on top of the purchase price. For your own peace of mind, maybe take 15 percent; it calculates a little easier. The final percentage depends primarily on the choice between an existing home (1) versus a new construction project (2).

(1) Registration tax

Ofte Impuesto sobre Transmisiones Patrimoniales Onerosas (ITP), a tax levied by the region on the purchase of an existing home. When you, the buyer, sign the purchase deed, you must pay this registration tax within the month. The percentage depends on region to region and in practice is between eight and ten percent.


(2) VAT

In Spanish: IVA. If you buy a new home, which has never been lived in before, you will pay VAT on its purchase. This is a national tax, which is the same everywhere in Spain: ten percent. The Canary Islands are the only exception. There the IGIC, Impuesto General Indirecto Canario, applies, which is only 4.5 percent. In both cases, the buyer is responsible for payment. Note: On commercial properties and pieces of land, you pay 21 percent VAT.

And further:

>>Attorney fees.

You are not obliged to use a lawyer or consultant when purchasing property in Spain, but it is highly recommended. His or her help is golden. A lawyer will draft and review contracts, explain complex legal and administrative issues to you in human language, and make sure there are no skeletons in the closet. In particular, he or she checks the claim of ownership, permits and any charges still attached to the residence. Finally, an attorney will also take care of the necessary documents to complete the process, such as property registration and payment of taxes, so you can squeeze the keys to your dream home into your fists as soon as possible.

The cost of a lawyer depends somewhat on the complexity of your case. Expect one to one and a half percent of the purchase price. Usually you can also agree on a lump sum in advance so you know where you stand. The minimum amount is often around 2,500 euros.

Gold Estates has a privileged partnership with Baker Tilly, a Belgian company that takes on the role of lawyer and tax and legal advisor. So at Gold Estates, you’re not just buying from Belgians. You will also be fully guided by Belgians, through the tangle of Spanish bureaucracy. A must, especially for those who are not fluent in the language. With three local offices, Baker Tilly knows the Spanish costas like no other and works along the entire coastal region, from Dénia to Estepona.

>>Notary fees.

These amount to about two percent. Included in this are the costs for registration in the land register and the stamp duty (orte Impuesto sobre Actos Juridicos Documentados, AJD). The latter you must pay before signing the notarial deed.

>>Mortgage Costs.

Those who want to buy with a Spanish mortgage must take into account several additional costs. First, you are paying for the cost of estimating the value of the residence. This can amount to up to 500 euros. Don’t forget the cost of the mortgage itself.


First of all, as an owner, you obviously pay for utilities such as electricity, gas and water. You will also pay for garbage collection and take out the necessary insurance. Those who share things with other owners, such as a garden, a pool or a corridor, automatically become members of the Comunidad de Propietarios, the community of owners. And consequently contributes to the maintenance and repair of those common areas.


Anyone who thought they could escape taxes in Spain…. unfortunately peanut butter, you are out for the trouble. Because in addition to those costs, per month, quarter or year, in Spain you also make your contribution through taxes. Specifically, a Belgian resident who owns a home in Spain pays the following taxes annually:

(1) Property tax.

Ofte Impuesto sobre Bienes Inmeubles (IBI). This municipal tax varies from location to location and is calculated on the cadastral value(valor cadastral) of your residence.

(2) Income tax for non-residents.

Ofte Impuesto sobre renta de no residentes. Non-residents should – on their own initiative! – modelo 210 complete and submit. This is a tax on income associated with your residence. Specifically, there are two possibilities:

>>You rent.

In this case, you pay a percentage tax on the net rental income. If you charge no or too little rent, the tax is calculated based on a market rent. The tax rate for residents is 19 percent, for non-residents 24 percent. However, you can deduct some costs. The declaration is made on a quarterly basis.

>>You are not renting.

Then you pay 19 percent on a taxable basis of 1.1 or two percent of the cadastral value. The two percent base applies to residential properties whose cadastral value has not been revised in the last ten years.

(3) Wealth tax.

Ofte Impuesto sobre el patrimonio. Non-residents pay only on their Spanish property and assets. In other words, the property they own in Spain and the money held in a Spanish account, for example to pay for utilities. Each region independently determines the rate and exemptions. The estate tax is personal, meaning that each owner enjoys exemptions individually. As a result, the amount can vary greatly depending on whether you are buying alone or with several people.

Hopefully, this overview will shed some light on the darkness, without scaring. It may seem like a lot of work now, but know that you are not alone. We will guide you from start to finish and make sure you always know where you stand.



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