Buying property in Spain can be an attractive proposition for overseas buyers, whether you are looking for a holiday home, permanent residence, investment property or a luxury property on the Costa del Sol.
However, the advertised purchase price is not the total amount you will need to budget.
Taxes, legal fees, notary and Land Registry costs, mortgage expenses and other purchase-related costs can add a significant amount to the price of the property. The exact amount depends on where you are buying, whether the property is new or resale, and your individual circumstances.
For buyers considering Marbella property for sale, Estepona, Benahavís, Casares, Manilva or other areas of the Costa del Sol, understanding these costs before beginning your property search is an important part of establishing a realistic budget.
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How Much Extra Should You Budget?
As a general planning figure, buyers should allow additional funds above the purchase price for taxes and transaction costs.
The amount varies according to the property and location, but current guidance commonly places total additional purchase costs in the region of 8–13%, with the exact figure depending particularly on whether you are buying a new-build or resale property and the tax rules in the relevant autonomous community.
This means that a buyer looking at a €1 million property should not automatically assume that €1 million is the required budget.
The actual cash requirement could be substantially higher.
Before making an offer, it is therefore sensible to establish the likely total acquisition cost rather than looking only at the property’s advertised price.
The Main Costs of Buying Property in Spain
The main costs can include:
- Property Transfer Tax (ITP) on qualifying resale properties
- VAT (IVA) on qualifying new-build properties
- Stamp Duty (AJD)
- Notary fees
- Land Registry fees
- Independent legal fees
- Mortgage-related costs where applicable
- Currency exchange costs for international buyers
- Property valuation and other professional costs where applicable
Not every purchase will incur every cost, and some costs depend on the structure of the transaction.
Buying a New-Build Property in Spain
One of the most important distinctions is whether you are buying a new property directly from a developer or purchasing a resale property.
A qualifying new residential property purchased from a developer is generally subject to 10% VAT (IVA).
In Andalucía, the purchase of a new home is also generally subject to Stamp Duty (AJD).
For buyers specifically considering new and off-plan property in Marbella, the tax treatment and payment schedule should be understood before reserving a property.
For a €1 million new-build property, 10% VAT alone would represent €100,000.
Stamp Duty and the other transaction costs would be additional.
Example: €1 Million New-Build
| Cost | Example |
|---|---|
| Property price | €1,000,000 |
| VAT at 10% | €100,000 |
| AJD at 1.2% in Andalucía | €12,000 |
| Legal, notary and registration costs | Additional |
| Total | More than €1,112,000 |
This is an illustration rather than a quotation. The precise calculation should be confirmed for the individual property and transaction.
Buying a Resale Property
A resale property is generally subject to Property Transfer Tax (ITP) rather than VAT.
ITP is administered by the autonomous communities, meaning the applicable rate depends on where the property is located.
In Andalucía, the current general ITP rate for qualifying property transactions is 7%. There are specific reduced rates and conditions for certain transactions, so buyers should obtain professional advice rather than assuming that the general rate applies to every purchase.
Example: €1 Million Resale Property in Andalucía
Using the general 7% ITP rate as a simple illustration:
| Cost | Example |
|---|---|
| Property price | €1,000,000 |
| ITP at 7% | €70,000 |
| Legal, notary and registration costs | Additional |
| Total | More than €1,070,000 |
Again, this is an illustration only.
The difference between new-build and resale taxation can therefore be significant, and it should be incorporated into your property budget before comparing properties.
New-Build vs Resale: Why the Difference Matters
The tax treatment is one reason why comparing a €1 million new-build with a €1 million resale property purely on headline price can be misleading.
For a qualifying new-build:
Purchase price + VAT + AJD + other costs
For a resale:
Purchase price + ITP + other costs
The tax difference can amount to tens of thousands of euros on higher-value properties.
For buyers looking at luxury property in Marbella and the wider Costa del Sol, this becomes particularly relevant because properties can easily be priced at €1 million, €2 million or considerably more.
What About Legal Fees?
Using an independent Spanish property lawyer is an important consideration, particularly for international buyers.
Your lawyer can carry out legal due diligence and review matters such as:
- Property ownership
- Title information
- Existing charges or debts
- Planning and building documentation
- Licences
- Community matters
- Outstanding taxes or charges
- Contracts and reservation agreements
- The purchase deed
Legal fees vary according to the lawyer and complexity of the transaction.
The important point is that legal advice should be treated as part of the acquisition budget rather than an unexpected expense at the end of the process.
Notary and Land Registry Costs
The purchase process also involves official documentation and registration.
The notary formalises the public deed, while the Land Registry records the ownership.
These costs are generally much smaller than the principal purchase taxes, but they still need to be included in the overall budget.
For a high-value property, it is sensible to obtain a complete cost estimate before committing to the purchase.
Buying with a Mortgage
If you are financing the purchase, there can be additional costs associated with obtaining a mortgage.
These can include:
- Property valuation
- Mortgage-related administration
- Banking costs
- Insurance
- Currency conversion costs for international buyers
- Potential mortgage arrangement fees, depending on the lender and product
Mortgage requirements also vary between Spanish residents and non-residents.
International buyers should establish their likely borrowing capacity before seriously considering properties, particularly when purchasing at the upper end of the market.
Don’t Forget Currency Exchange
For buyers purchasing from outside the eurozone, exchange rates can have a surprisingly large effect on the final cost.
For example, someone buying a €1.5 million property using sterling is exposed to movements in the EUR/GBP exchange rate.
A relatively small currency movement can represent a substantial difference in the sterling cost of the property.
This is one reason why international buyers should consider the purchase price, taxes and other costs together when calculating their real budget.
How Much Cash Do You Actually Need?
Suppose you are considering a €1 million property.
Your budget should not simply be:
€1,000,000
It should instead consider:
€1,000,000 purchase price
+ purchase taxes
+ legal fees
+ notary and registration costs
+ financing costs, if applicable
+ currency costs, if applicable
= total acquisition budget
The same principle becomes even more important with a €2 million or €3 million property because a percentage-based tax can represent a very substantial amount.
Ocyan Luxury Villas Estepona
What About Ongoing Costs After Completion?
Buying the property is only the beginning.
Once you own a property in Spain, you may also have ongoing costs such as:
- IBI (local property tax)
- Community fees
- Insurance
- Utilities
- Maintenance
- Pool and garden maintenance
- Security
- Property management
- Repairs and refurbishment
- Rental management, if applicable
Luxury developments can also have significant community or service charges, particularly where they provide extensive facilities, security, landscaping, pools, gyms or concierge services.
These costs should be assessed before buying rather than after completion.
Buying a Property in Marbella and the Costa del Sol
For buyers looking at Marbella and the wider Costa del Sol, the overall acquisition cost should be considered alongside the property’s location and characteristics.
The Costa del Sol property market covers a wide range of locations and property types, from luxury apartments in Marbella to new developments in Estepona, Casares and Manilva.
A €1.5 million apartment in a new development may have a very different cost structure from a €1.5 million resale villa.
Likewise, two properties with identical asking prices can have very different ongoing costs.
When comparing properties, buyers should therefore consider:
Purchase price
+ acquisition taxes
+ transaction costs
+ annual ownership costs
+ expected maintenance
This provides a much more realistic picture of the cost of ownership.
New-Build and Off-Plan Properties
New-build and off-plan properties can also have a different payment structure from completed resale properties.
Rather than paying the entire purchase price at completion, an off-plan development may require staged payments during construction.
A typical structure could involve:
- Reservation payment
- Initial deposit
- Further staged payments
- Final balance on completion
The exact payment schedule is determined by the developer and individual development.
Buyers should therefore assess both the total purchase price and the timing of the payments.
This is particularly important if you are buying an off-plan property several years before completion.
For example, Property Wealth’s current Costa del Sol new-build and off-plan selection includes developments across Marbella and the wider region.
What Should Buyers Check Before Making an Offer?
Before committing to a property, it is worth establishing:
- The agreed purchase price
- The applicable purchase tax
- Whether VAT or ITP applies
- Any applicable AJD
- Estimated legal fees
- Notary and Land Registry costs
- Mortgage costs, if applicable
- Community/service charges
- Annual property taxes
- Expected maintenance costs
- Currency exchange implications
- The complete payment schedule for off-plan property
The objective is to understand the property’s total cost of acquisition and ownership, rather than simply its advertised price.
Property Wealth’s Assessment
At Property Wealth, we believe the purchase price is only one part of evaluating a Spanish property.
A property should also be assessed in terms of its location, specification, development quality, running costs, payment structure and long-term suitability for the buyer.
This becomes particularly important in the luxury and new-build markets, where two properties at similar prices can offer very different propositions.
For international buyers, understanding the complete financial commitment before reserving a property is particularly important.
A well-priced property can look very different once taxes, acquisition costs and ongoing ownership expenses are taken into account.
Final Thoughts
Buying property in Spain is relatively straightforward when the process is properly planned, but buyers should avoid focusing exclusively on the advertised purchase price.
The biggest additional cost is often the purchase tax, and the applicable tax treatment depends on factors including whether the property is new or resale and where it is located.
For buyers in Andalucía, the applicable tax treatment should be confirmed for the individual transaction before committing to a purchase.
The sensible approach is therefore to establish the total acquisition cost before making an offer.
For higher-value properties, this can make a substantial difference to the amount of capital required.
If you are considering property in Marbella, Costa del Sol villas, or property further west in Casares and the Finca Cortesín area, Property Wealth can help you compare properties based on more than just their asking price.
properties based on more than just their asking price.
