Thinking of buying property in Andalusia, Spain? Beyond the property price, you’ll encounter several other costs. Here’s a simplified overview of what to expect.
The good news: if you work with a real estate agency like Meester Estate, the seller covers the agent’s fees, making this a safe and efficient way to purchase.
In this blog we will break down the costs into one-time payments, ongoing expenses, and taxes.
One-Time Costs When Buying
1. Transfer Tax (for resale properties)
For second-hand properties, buyers pay the Property Transfer Tax (ITP). In Andalusia, the rate is 7%.
- Example: A €500,000 property will incur €35,000 in ITP.
This tax must be paid within 30 days of signing the deeds.
2. VAT and Stamp Duty (for new properties)
When buying directly from a developer:
- VAT: 10% of the purchase price.
- Stamp Duty: 1.2% (reduced from 1.5%).
Example: A €200,000 property would cost €20,000 in VAT and €2,400 in stamp duty.
3. Notary Fees
A notary ensures legal ownership transfer and prepares the title deeds.
- Cost: Around €1,000 for properties under €500,000.
4. Land Registry Fees
Register your ownership at the local Land Registry Office.
- Typical cost: €700-800 per entry. Properties with extras like a garage may require multiple entries but often get discounts.
5. Legal Fees
Cover contract reviews and negotiations. Please ask us for lawyer recommendations.
- Cost: ~1% of the property price + VAT.
6. Banking Costs
Includes mortgage setup fees, currency exchange costs (if applicable), and cheque fees (usually 0.5% of the cheque value).
Ongoing Costs After Purchase
1. Local Property Tax (IBI)
Based on the cadastral value (lower than market value).
- Example: For a €300,000 property, expect ~€700 annually.
2. Community Fees
Cover shared space maintenance in developments.
- Typical cost: €200/month (€2,400/year) for mid-range properties. Upscale developments may charge more.
3. Capital Gains Tax (CGT)
Applies to rental income or profits from the property.
- EU/EEA residents pay 19%.
- Non-EU/EEA residents pay 26%.
Example: Renting for six months earning €7,000 incurs €1,330 in CGT.
4. Wealth Tax
Andalusia does not levy this on most properties but has a progressive tax for properties valued at €2,000,000 or more.
5. Plusvalía Tax (When Selling)
This tax is based on the property’s increased value since purchase. The amount varies by city and cadastral value.
Example Breakdown
Buying a €500,000 property as an EU citizen (not rented):
- Transfer Tax (ITP): €35,000
- Notary Fees: ~€1,000
- Land Registry Fees: ~€800
- Legal Fees: ~€5,000 (1% + VAT)
Total (approx.): €41,800
Final Thoughts
Understanding the costs of property ownership in Andalusia helps avoid surprises. While fees vary by property type and location, the guidelines above give you a solid foundation. Work with legal and our real estate experts at Meester Estate to ensure a smooth and transparent process.
