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Buying a property in Spain: These are the taxes and fees you must pay in 2023
Homebuyers need to factor in other costs and expenses when purchasing a property in Spain
Finding that perfect home in Spain is just the start of a journey that can be both thrilling and overwhelming, especially for expats packing up and moving from the UK to embark on a new life in the sun.
It goes without saying that the house-buying process varies between countries, and in addition to the cost of the bricks and mortar, purchasers in Spain must factor in a number of other costs and expenses, such as property tax and additional mortgage fees.
Banks in Spain ordinarily finance 80% of the value of the property, if the property is to be used as your main residence. This means buyers must have saved at least 20% of the value to secure the loan. But in order to go ahead wih the transaction, there are other expenses and property taxes in Spain that must be paid.
On top of the 20% deposit, experts recommend having an additional 10 to 12% available to cover the cost of the notary, registry and taxes. Even those lucky enough to be able to purchase outright will need to pay these compulsory expenses, although they do differ depending on whether you are buying a new or pre-owned home.
Here's a breakdown of approximate cost of the taxes and fees that must be paid when buying a property in Spain in 2023:
The notary
Irrespective of whether the property is a new-build or not, the notary is one expense that must be factored. Basically, notaries in Spain are the equivalent of a solicitor when buying in the UK and their fees are regulated by the Spanish Government. This is good news in that they all charge the same.
Prices range between 600 and 875 euros for granting the public deed of sale, depending on the price of the property: the greater the value, the higher the fee.
Land registry
Once the deeds have been granted by the notary, they must be registered, which costs between 400 and 700 euros, fixed fees set by the State.
Other property taxes
Again, the cost of Spanish taxes depends on the value of the home and whether it's new or not.
Taxes are typically higher in the case of new-builds as they are subject to VAT, known as IVA in Spain, which in 2023, equates to 10% of the property value. This tax is lower in the Canary Islands, at 7% and is known as the IGIC-Indirect General Canary Islands Tax. In the case of public subsidised housing, VAT may be 4%, but differs between each Autonomous Community and the type of social housing.
New home buyers must also pay the Documented Legal Acts tax (IAJD, also often known simply as AJD). This is like stamp duty in Spain, only applies to new builds and varies between Autonomous Communities.
Documented Legal Acts tax costs by region are as follows (as of 2023)
- Andalucía: 1.2%
- Aragón: 1.5%;
- Asturias: 1.2%
- The Balearic Islands: 1.2%
- The Canary Islands: 0.75%
- Cantabria: 1.5%
- Castilla-La Mancha: 1.5%
- Castilla y León: 1.5%
- Catalonia: 1.5%
- Ceuta: 0.5%
- Madrid: 0.75%
- Valencia: 1.5%
- Extremadura: 1.5%
- Galicia: 1.5%
- La Rioja: 1.0%
- Melilla. 0.5%
- Murcia: 1.5%
- Navarra: 0.5%
- The Basque Country: 0.0%
Property Transfer Tax (ITP) is a compulsory expense when buying a pre-owned home in Spain and a rate of 6 and 10% is usually applied, although it depends on the Autonomous Community. See below for ITP's in different communities,
- Andalucía: 8.0%
- Aragón: 8.0%
- Asturias: 8.0%
- The Balearic Islands: 8,0%
- The Canary Islands: 6.5%
- Cantabria: 10.0%
- Castilla-La Mancha: 9.0%
- Castilla y León: 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%
- Navarra: 6.0%
- The Basque Country: 4.0%
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