Costs and Taxes When Buying Property in Costa del Sol
A clear breakdown of all buying costs, taxes, and ongoing expenses for new build and off-plan property purchases in Spain.
All Costs and Taxes Questions(11)
What Are the Buying Costs for a New Build in Spain?
Buying costs for a new build in Spain typically add 12% to 15% on top of the purchase price, including 10% VAT, 1.5% AJD stamp duty, legal fees, notary and Land Registry costs.
What are the hidden costs of buying property in Spain?
The main costs buyers underestimate are the purchase taxes and fees (12 to 14 percent of the price), ongoing annual ownership costs, snagging and furnishing costs on a new build, and one-off setup costs like furniture, utility connections and a Spanish bank account.
What are the annual costs of owning property in Spain?
Annual property ownership costs in Spain typically include IBI (council tax), community fees, building insurance, utility standing charges, and imputed income tax for non-residents who do not rent out the property. Total annual costs on a 400,000 euro apartment commonly run at 5,000 to 10,000 euros per year.
What annual taxes do non-residents pay on property in Spain?
Non-residents pay three main annual taxes: (1) IRNR non-resident income tax on notional rental income — approximately €200–€800/year on a typical property; (2) IBI local council tax — typically €500–€3,000/year; and (3) Basura refuse collection tax — typically €150–€600/year.
How much tax do I pay on rental income from Spanish property?
Non-resident property owners in Spain pay a flat tax of 19 percent on rental income (EU/EEA nationals) or 24 percent (non-EU nationals). EU/EEA residents can deduct allowable expenses; non-EU non-residents are taxed on gross income. Rental income must be declared quarterly in Spain.
How much capital gains tax do I pay when selling property in Spain?
Capital gains tax (plusvalia nacional and CGT) applies when you sell property in Spain at a profit. For non-residents, the rate is 19 percent for EU/EEA nationals and 24 percent for non-EU nationals. Spanish residents pay between 19 and 28 percent on a sliding scale. There is also a separate local tax called plusvalia municipal.
Do I Pay VAT on a New Build in Spain?
Yes, new build properties in Spain are subject to 10% VAT (IVA). This replaces the Transfer Tax (ITP) that applies to resale properties.
How much are community fees on Costa del Sol properties?
Community fees on the Costa del Sol range from around 80 euros per month for a basic apartment to 600 euros or more per month for a luxury development with extensive amenities. The fee depends on the development size, facilities, and service level.
How much are legal fees when buying property in Spain?
Property conveyancing legal fees in Spain are typically 1 to 1.5 percent of the purchase price plus 21 percent VAT. On a 400,000 euro property, this is 4,000 to 6,000 euros plus VAT. Some lawyers charge fixed fees, which can be more cost-effective on higher-value purchases.
Do I pay VAT or transfer tax when buying a new build in Spain?
New builds from a developer are subject to 10% IVA (VAT). Resale properties bought from a private owner are subject to 7% ITP (Transfer Tax) in Andalusia. You pay one or the other — never both. The vendor determines which applies.
What is AJD stamp duty and how much is it in Spain?
AJD (Impuesto de Actos Juridicos Documentados) is a stamp duty charged on notarial documents in Spain. For new-build property purchases in Andalusia, the rate is 1.5 percent of the purchase price. It is paid at completion alongside VAT.
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