Buying a house in Spain can be a both exciting and daunting for many reasons, especially for expats who are moving abroad and buying property in Spain for the first time. The process also varies between countries and is likely to be different in some or many ways compared to where you are from. As well as the price of the property, remember that you will also need to factor in other costs and expenses. So, if you’re planning on buying a house in Spain, let’s look at the taxes and fees for 2021.
When buying a property in Spain, a mortgage is not the only major expense involved in the process and you’ll have to do your calculations to make sure you don’t across any unexpected surprises. Banks in Spain generally finance 80% of the value of the property you wish to purchase (if the property will be used as your main residence), meaning that you need to have 20% of the property value in order to pay a deposit. But this is not all: there are a range of other expenses and taxes that must be taken into account and paid to formalise the operation before you can become the owner of your new home in Spain.
Between the valuation of the property, the notary, registry and the corresponding taxes, experts recommend having savings of between 10% and 12%, depending on where the property is located and its price. These percentages are on top of the 20% you need for the mortgage deposit. Take note that if you don’t require a mortage, you still need to pay these additional fees. All of these are compulsory expenses that revolve around the purchase of a home, although the total amount to be paid will depend on whether you are buying a new or pre-owned home, where you are buying the property and the amount involved. Here is a summary of what each one consists of and the approximate price/value in 2021:
Buying a property: additional costs
The notary
One expense to consider when buying any house in Spain, both new or used, is the notary’s office. Notaries in Spain do the job that a solicitor tends to do when you buy a house in the UK, and their fees, called tariffs, are regulated by the State, meaning that they all charge the same for identical services. In the case of granting the public deed of sale, prices are between 600 and 875 euros, depending on the price of the property. For example, for a 100,000 euro flat you would pay approximately 850 euros, while for a 250,000 euro flat you would have to pay around 1,000 euros.
The Land Registry
It also costs money to register the deeds that have been signed by the notary. Again, these fees are fixed by regulations and depend directly on the price of the property, although they are usually between 400 and 650 euros.
Taxes
The buyer of a home must also keep some extra money aside to pay taxes, although the amount will depend on the price of the home and whether it is new or second-hand.
If you buy a brand new home in Spain, then you will have to pay more in terms of taxes, the most important being VAT (IVA in Spanish). In 2021, VAT will amount to 10% of the property price. In other words, it would mean 10,000 euros in the case of a 100,000 euro home and 25,000 in a 250,000 euro home. It is worth noting that in the Canary Islands, VAT in the case of buying property is only 6.5% (this is the IGIC-Indirect General Canary Islands Tax). In the case of public housing, VAT may be 4%, but this varies depending on the Autonomous Region and the type of social housing in question.
A second tax must be added to the VAT in the case of buying a new home in Spain: the Documented Legal Acts tax (IAJD, also often known simply as AJD). This tax is still paid by the buyer and the amount also depends on each Autonomous Community. Note that these taxes do not apply to previously owned homes.
Taxes to be paid when buying a new home in Spain
| Autonomous Community | AJD | VAT |
| Andalucía | 1.5% | 10.0% |
| Aragón | 1.5% | 10.0% |
| Asturias | 1.5% | 10.0% |
| The Balearic Islands | 0,5% | 10.0% |
| The Canary Islands | 1.0% | 6.5% |
| Cantabria | 2.0% | 10.0% |
| Castile-La Mancha | 1.5% | 10.0% |
| Castile and Leon | 1.5% | 10.0% |
| Catalonia | 2.0% | 10.0% |
| Ceuta | 0.5% | 10.0% |
| Madrid | 0.75% | 10.0% |
| Valencia | 2.0% | 10.0% |
| Extremadura | 2.0% | 10.0% |
| Galicia | 1.5% | 10.0% |
| La Rioja | 1.0% | 10.0% |
| Melilla | 0.5% | 10.0% |
| Murcia | 1.5% | 10.0% |
| Navarre | 0.5% | 10.0% |
| The Basque Country | 0.5% | 10.0% |
For pre-owned homes the most important tax is the Property Transfer Tax (ITP). In this case, the amount depends on the percentage applied to the registered price and the autonomous community in which the house is located, although as a general rule, a rate of between 6% and 10% is applied. The following rates are currently applied in 2021:
Taxes to be paid when buying a pre-owned home in Spain
| Autonomous Community | ITP |
| Andalucía | 8.0% |
| Aragón | 8.0% |
| Asturias | 8.0% |
| The Balearic Islands | 8,0% |
| The Canary Islands | 6.5% |
| Cantabria | 10.0% |
| Castile-La Mancha | 9.0% |
| Castile and Leon | 8.0% |
| Catalonia | 10.0% |
| Ceuta | 6.0% |
| Madrid | 6.0% |
| Valencia | 10.0% |
| Extremadura | 8.0% |
| Galicia | 10.0% |
| La Rioja | 7.0% |
| Melilla | 6.0% |
| Murcia | 8.0% |
| Navarre | 6.0% |
| The Basque Country | 7.0% |
It should be noted that for VPOs (subsidised housing), large families, people with disabilities and young people there are often lower rates. For example, in Madrid, large families who buy an independent home will pay 4% of the registered price as a tax on the property, provided that the home they buy is their main residence.
An advisor
The only optional expense of buying a home is getting a “gestor”, someone who will be able to process tax settlements and carry out other paperwork. Hiring an advisor like this may be particularly usefulfor expats who don’t speak Spanish. They don’t have specific fees, and they are usually only contracted when a mortgage is opened to purchase the property with an approximate cost of 300 euros.
Additional mortgage costs in Spain
All of the above taxes and fees are aplicable whether you need to take out a mortgage or not. If you plan to purchase property in Spain by means of a mortgage, then beware that there may be some additional charges that you weren’t expecting.
The valuation of the property
If the buyer is going to apply for a mortgage, then he or she will have to pay an appraiser to value the property. This is often facilitated by the bank and after this property valuation, then the bank will know what percentage of financing it can provide. As mentioned, banks in Spain lend an amount equivalent to 80% of the purchase price or appraisal value, although some are managing to finance 90-100% of the purchase price, usually settling on the lowest. In 2021, the valuation will cost between 250 and 600 euros depending on the company carrying out the process, the type of property and its valuation. Some, but not all, banks will cover these costs. Once the valuation is complete, it is valid for 6 months from the date of issue.
Opening fee
Some banks may charge you a fee to either open an account or take out a mortgage and this fee can be up to 2% of the capital loaned, as agreed with the financial institution. However, there are many banks that do not apply this penalty. Note that in order to take out certain mortgages, banks may also require you to take out home or life insurance as well.