Costs of Buying Property
on the Costa del Sol
Budget accurately before you buy. A complete breakdown of every purchase cost, tax, and ongoing expense — so there are no surprises.
One-Time Costs at Purchase
Every cost you will pay at the point of purchase, expressed as a rate and an approximate amount.
| Cost Item | Rate | Notes |
|---|---|---|
| VAT (IVA) on new build | 10% | Applied to purchase price. Garage spaces attract 21% if purchased separately. |
| Stamp Duty (AJD) | 1.2% | Actos Jurídicos Documentados — paid on the purchase price when buying new build. |
| Notary fees | 0.1–0.5% | Varies with property value. Approx €800–€2,500 on a typical Costa del Sol purchase. |
| Land Registry fees | 0.1–0.3% | Registration of the title deed. Approx €400–€1,200 on a typical transaction. |
| Lawyer's fees | 1% | Typically 1% of purchase price + VAT. Non-negotiable for a safe purchase. |
| Mortgage arrangement fee | 1–1.5% | If using a mortgage. Some lenders charge a flat fee rather than a percentage. |
| Property valuation | €400–€800 | Required by the bank for mortgage purposes. Cost varies with property value. |
| Total (new build, no mortgage) | ~12.7% | Add 1–2% for mortgage costs if applicable |
Annual Running Costs After Purchase
Budget these recurring costs into your financial planning before you buy.
| Cost Item | Typical Annual Cost | Notes |
|---|---|---|
| IBI (annual property tax) | 0.4–1.1% | Of cadastral value (rateable value), which is typically much lower than market value. |
| Community fees | €800–€4,000/yr | Varies significantly by development. Luxury developments with pools, gyms, and 24/7 security sit at the upper end. |
| Basura (rubbish collection) | €80–€200/yr | Charged by the municipality. Often included in IBI. |
| Non-resident income tax (IRNR) | 2% or 19–24% | 2% of cadastral value if the property is unrented; or 19% of rental income for EU residents, 24% for non-EU. |
| Wealth tax (Impuesto de Patrimonio) | Varies by region | Andalusia has a 100% exemption for 2024. Subject to change — verify annually with your tax adviser. |
| Buildings insurance | €300–€1,200/yr | Required if you have a mortgage. Covers the structure only — contents insurance is separate. |
| Property management | 10–20% of rental income | If you use a management company for holiday lets or long-term rentals. |
Worked Example: €600,000 New Build Apartment
Costs FAQs
For a new build property in Andalusia, budget 13–15% of the purchase price in total costs. This covers VAT (10%), stamp duty (1.2%), notary and Land Registry fees (approximately 0.5%), and legal fees (approximately 1%). If you are taking a mortgage, add another 1–2% for arrangement fees and the valuation.
Yes. Resale properties are subject to Transfer Tax (ITP) rather than VAT. In Andalusia, ITP is currently 7% of the purchase price (reduced from 8% in 2021). You still pay stamp duty (AJD), notary, Land Registry, and legal fees on top, so total costs are similar at approximately 11–13% of purchase price.
Not if you are buying as a private individual for personal use or holiday letting. If you operate the property as a registered business providing holiday accommodation services (not just passive rental), there may be a case for VAT recovery — but this requires specialist advice and involves ongoing VAT filing obligations in Spain. This structure is only relevant for the most commercially active buyers.
On a typical Costa del Sol apartment (€500,000 purchase price), annual ongoing costs typically total €3,000–€8,000: IBI property tax (€600–€1,500), community fees (€1,500–€3,500), and non-resident income tax (€1,000–€3,000). Add buildings insurance and any property management fees if applicable.
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