What does it cost to buy a home in Spain?

One-off costs at purchase

For a resale home in Andalusia you pay transfer tax, notary, registration and legal fees. For a new build you pay VAT and stamp duty instead.

• Transfer tax (ITP) on a resale home: 7 per cent of the price.
• New build: 10 per cent VAT (IVA) plus about 1.2 per cent stamp duty (AJD).
• Notary and land registry: together about 0.5–1.5 per cent.
• Lawyer: normally around 1 per cent plus VAT.
• Mortgage, if you borrow: valuation and bank fees, often 1–2 per cent of the loan.

Example: an apartment at EUR 360k

A resale apartment at EUR 360k means roughly EUR 25k in transfer tax, about EUR 3.5k in notary and registration and about EUR 4.5k in legal fees including VAT. You land near EUR 393k, some 9–10 per cent above the price. A new build in the same bracket adds around 12 per cent instead.

Annual running costs

Budget for the following every year as an owner. The community fee varies most — pool, gardens, lift and a manned gate all cost money.

• Property tax (IBI): about 0.4–1.1 per cent of rateable value, often EUR 350–1,300.
• Community fee: roughly EUR 110–400 per month depending on the complex.
• Utilities and internet: roughly EUR 130–270 per month with normal use.
• Home insurance: roughly EUR 250–700 per year.
• An annual Spanish tax return even without letting (modelo 210).

If you let the home

Short-term letting in Andalusia normally requires registration and a tourist licence number, and the community can restrict what is allowed. Rental income is taxed in Spain and also declared in Sweden, where you get credit for Spanish tax paid.

When you sell

On a sale you pay Spanish capital gains tax and the municipal land value tax, plusvalía. If you are not a Spanish resident, the buyer also withholds 3 per cent of the price as an advance on that tax.

Costs differ between towns

Taxes are the same across Andalusia, but running costs follow the home and the complex. An apartment in a large Nueva Andalucía complex with pool, gardens and gate has a higher community fee than a central two-bedroom in Fuengirola. Villas in Marbella and Nueva Andalucía also carry pool, garden and alarm costs. Estepona sits in between, with lots of new build and therefore lower maintenance in the early years.

How to keep running costs down

A few choices at purchase affect your annual cost more than anything you do later.

• Ask for the community budget and minutes before signing.
• Choose a complex with sensible services — every extra staffed function costs monthly.
• Check the IBI amount on last year's bill, not an estimate.
• Ask about the energy rating and whether windows and heat pump are replaced.
• Set up direct debit from a Spanish account to avoid late fees.