Buying a home involves more than the purchase price. At Promocat, we want you to be fully informed about all associated costs so you can plan your investment properly.
Main Taxes
VAT or Transfer Tax: Which Applies?
The tax you pay depends on whether you buy a new-build or resale property:
New-build Property (VAT):
- 10% of the purchase price for a main residence
- 21% for a second home or luxury property (over 450 sq m)
- Additional: stamp duty (AJD) between 0.5% and 1.5%
Resale Property (Transfer Tax):
- Varies by autonomous community
- Between 6% and 11% of the purchase value
- Madrid: 6%
- Catalonia: 10%
- Andalusia: 7%
Notary and Land Registry Costs
Notary
Costs regulated by official tariff:
- Property of €100,000: approximately €600-850
- Property of €200,000: approximately €850-1,200
- Property of €500,000: approximately €1,500-2,000
Land Registry
Similar to notary costs, between €400 and €1,500 depending on property value.
Conveyancing Fees
Although optional, it is highly recommended. A gestoría handles:
- Document processing
- Land registry registration
- Tax settlement
- Typical cost: €300-600
Property Valuation
Mandatory if you apply for a mortgage:
- Cost: €250-500
- Carried out by an official valuer
- Valid for the bank
Mortgage Costs (if applicable)
Arrangement fee: 0.5% – 1% of the loan amount
Valuation: €250-500
Bank conveyancing: €300-600
Buildings insurance: Mandatory, €200-500 per year
Life insurance: Recommended, varies by age and loan amount
Other Costs to Consider
Municipal capital gains tax: When buying from heirs or by gift
Owners’ association: Monthly fee for flats or developments
IBI (property tax): Annual, varies by municipality
Utilities: Water, electricity and gas connection
Removal and renovations: If required
Practical Example
For a resale property of €250,000 in Madrid:
- Transfer tax (6%): €15,000
- Notary: €900
- Land registry: €700
- Conveyancing: €450
- Total costs: approximately €17,050 (6.8%)
If you also take out an 80% mortgage (€200,000):
- Arrangement fee (1%): €2,000
- Valuation: €350
- Bank conveyancing: €450
- Additional total: €2,800
- Grand total: €19,850 (7.9%)
Promocat Tips
1. Budget 10-12% of the purchase price for additional costs
2. Compare mortgage offers — costs can vary significantly
3. Negotiate with the seller on some minor costs
4. Consult experts to optimise your tax position
Our Comprehensive Service
At Promocat, we support you throughout the process:
- Personalised tax advice
- Accurate cost calculator
- Contact with trusted gestorías
- Negotiation with banks
- Full documentation management
Have questions about purchase costs? Request a free consultation with our advisers and get a detailed breakdown for your specific case.