Taxes and Costs When Buying a Property in Andalucia, Spain

When purchasing a property in Spain, it’s important to understand that taxes and associated costs vary depending on whether you’re buying a newly built property from a developer or a resale property. Below is a breakdown of the current tax structure and typical costs for each case.

New property from a developer:

VAT (IVA – Impuesto sobre el Valor Añadido)
For residential properties (apartments, villas, townhouses), VAT is charged at 10% of the purchase price. For plots of land and commercial premises, the VAT rate is 21%. This tax is paid by the buyer, and it also applies to any deposits or staged payments made before completion.

Stamp Duty (AJD – Actos Jurídicos Documentados)
In Andalusia, the current rate of stamp duty is 1.2% of the purchase price. This is also paid by the buyer at the time of signing the public deed of sale (escritura).

Resale property:

If you are buying a pre-owned property, the applicable tax is:

Transfer Tax (ITP – Impuesto sobre Transmisiones Patrimoniales)
In Andalusia, the current ITP rate for resale properties is a flat 7% of the declared purchase price, regardless of the property’s value. This tax is paid by the buyer and must be settled within 30 working days of signing the title deed before a notary.

Note: Tax rates can vary slightly in other autonomous communities. Special reductions may apply for eligible groups such as large families, disabled buyers, or young buyers purchasing their first home.

Additional costs for both new and resales properties:

Legal Fees:
While hiring a lawyer is not mandatory, it is highly recommended. A qualified lawyer will handle legal due diligence, contract reviews, and ensure a smooth and secure transaction. Legal fees are typically around 1% of the purchase price, plus 21% VAT.

Mortgage-Related Costs:
If you are financing your purchase with a Spanish mortgage, consider the following costs:

Property valuation:
Required by the lender, typically costs between €250 and €500.

Mortgage arrangement fees:
Usually between 0.5% and 1% of the mortgage amount, depending on the bank and financial products involved.

Additional costs:

These may include notary, registration, and legal expenses related to the mortgage setup. In general, mortgage-related costs range from 2.5% to 3% of the loan amount.

Notary and Land Registry Fees

These fees are based on a sliding scale depending on the purchase price, the number of documents involved, and property characteristics. As a general guideline, notary and registry fees combined represent approximately 0.5% to 1% of the purchase price.

Plusvalía Municipal (Local Capital Gains Tax)

This is a local tax levied by the town hall on the increase in land value since the last sale. It is typically paid by the seller, unless agreed otherwise. The exact amount depends on the length of ownership and municipal rates. A lawyer or tax advisor can provide a reliable estimate once the property details are reviewed.