There will of course be costs associated with owning a property in Spain. Some of these will be maintenance costs, such as cleaning, repairing, reforming, utility bills, rubbish collection, and so on, but apart from these general costs , there are a number of costs in the form of taxes and fees that property owners in Spain face.

Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI)

A local tax on the ownership of property in Spain, irrespective of whether the owner is a resident or not. Calculated on the basis of the valor catastral (an administrative value that is usually lower than the market value, sometimes considerably so).Set by the town hall, the tax rate goes from 0.4% – 1.1% of the valor catastral depending on the Spanish region.

Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR)

Non-residents who own property in Spain have to pay an annual income tax that varies according to whether the property is rented out or not.

Not rented out
Non-resident property owners who do not rent out their property and who do not have any other source of income in Spain pay income tax based on the value of their property. The tax rate is fixed as 25% of 2% of the valor catastral of the property, i.e.

The tax on a property with a valor catastral of 200,000€ would be as follows:
Property value for tax purposes = 200,000€
Taxable base (2%) = 4,000€
Tax (25%) = 1,000€

Rented out
If non-residents rent out their property and receive an income in exchange, they are obliged by law to declare this income and pay taxes on it. The taxable base and the tax rate will be determined by the laws as they apply to each person’s particular circumstances (taking into account the double taxation treaty – if any – between Spain and the country of origin of the non-resident). In many cases non-residents simply pay a flat rate of 25% of the gross income they earn from their property in Spain.

Residents in Spain will have to pay the income tax based on their income earned during the year. The tax rate depends on the level of income.

Community Fees

Owners of property that is part of any development, building, or complex in which common zones are shared with other owners are by law obliged to be members of the community of owners, know as the Comunidad de Propietarios. This will entail paying community fees for the upkeep of the common areas, and any other services that the community vote for. The fees will vary according to the magnitude of the common areas, the costs of maintaining them, and the services that the community vote for. A budget for annual community expenses is approved by majority vote of all owners (or representatives) who are present at the annual general meeting of the Comunidad de Propietarios.


Household insurance will vary according to the circumstances of the owner and the type of property. However it should be born in mind as a cost that all property owners will face.


It is necessary for you to open up a bank account in Spain in order to complete on a house purchase.

Since the 2008 financial crisis, the Spanish authorities have brought in additional banking regulations. For customers with day-to-day banking needs (rather than investment or business accounts) this primarily shows as increased security when opening an account. However, the process is still easy and more straightforward than in many other European countries.

Choosing a bank in Spain

Spain has over 170 financial institutions, most of which offer accounts for daily use (paying bills, receiving salaries and so on). These are split into two types: CAJAS and BANCOS.

BANCOS, like most banks in other countries, are privately owned or public limited companies and are more likely to be national chains and major banks include.

Banco de Sabadell  (website in 6 languages, including English)

Banco Popular  (Spanish only)

Santander  (Spanish only, do not expect to transfer an account from another country easily)

BBVA  (Spanish only)

La Caixa (Spanish)

 CAJAS are state owned, and are often very local. Some have just a few branches while others are spread across a large area. They tend to be more socially and ethically aware, investing in local infrastructure and other projects

Catalunya Caixa and Bankia (a partly nationalised conglomerate made from joining a number of regional cajas) provide their website in English.

Bank charges and fees in Spain

Most banks charge an annual fee for administration of a current account (cuenta corriente). This is typically 15–30€. There are often additional charges for credit (tarjeta de crédito) and debit cards (tarjeta de débito); additional account holders; savings accounts (cuenta de ahorros) and other items like cheque/check books. Expect to also pay a number of small fees, such as a charge of 0.50–3€ for withdrawals from other banks’ ATMs.

Documents for opening a bank account

To open a non-resident account in Spain you will need proof of identity – your passport and N.I.E

You will also need to show the address of the property you are buying or renting – rental or purchase contract or the PADRON from the town hall

and some funds

We are happy to go with you and help you through the process of opening an account as part of our service to you

You are strongly advised to hire a lawyer to help you during the buying process. Your lawyer drafts and reviews contracts on your behalf and can explain all the legal and administrative issues you face. Your lawyer should also carry out any necessary due diligence (checking ownership claim of the seller, charges on the property, permits, etc.) and arrange all the required documents to complete the process (property registration, tax payments, etc)

If you do not have a Spanish solicitor or Asesoria, we can recommend a reputable local one for you, who speaks English.

As a buyer of property in Spain there are a number of costs and taxes over and above the property price that you will have to pay and it is important to be clear from the outset the real costs you will face when you buy property in Spain

Depending upon whether you are buying a new property from a developer, or a resale property from a private individual, you will either have to pay VAT & Stamp Duty, or a transfer tax. The different cases are explained below, along with the other costs and taxes that are common to both cases

Buying a New Build Property from a Developer or Bank

  • VAT & Stamp Duty (IVA & Actos Jurídicos Documentados – AJD)

These taxes apply for residential properties being sold for the first time (never previously occupied), or for commercial properties and plots of land. This is a national tax, so VAT is the same wherever the property is located

At present VAT (known as IVA in Spain) is 10% on the purchase price of residential properties (villa, apartment, etc), and 21% for commercial properties and plots of land

The Stamp duty (known as AJD) is 1% of the price of the purchase, but may be dearer in some regions

Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, such deposit will be subject to VAT at the moment of payment of this deposit

Buying a RESALE from a Private Individual

  • Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP)

This tax applies if it is not the first time a property is bought, and is paid by the buyer. Stamp duty is included in this tax and you must pay this tax before the Escritura (title deed) can be registered in your name

The Transfer Tax rate is decided by the autonomous region where the property is located, and they can choose to apply the general rate, or their own rate

The general (national) rule of ITP is 7%, but many regions charge higher local rates

Income Tax Provision When Buying From Non-residents

If the seller is not a Spanish resident, 3% of the purchase price has to be withheld and paid to the tax authorities

Other Costs

  • Notary Expenses

Notary expenses are always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale.The Notary’s fees can vary between 450€ to 1000€ but average at 1% of the declared value of the property

  • Property Registry Fees
    The registry fees are based on the registered value of the property, and are usually about 1% of the purchase price declared in the deeds, although in some regions they are considerably lower. The fees are paid by the buyer
  • Plus Valia Tax (Capital Gains Tax)
    This is a tax relating to the property, and it is calculated and applied by the local Town Hall in respect of the increase in the value of the land since it was last sold. This tax is normally paid for by the vendor
  • Agency Fees

Estate agency fees or commissions are paid to the agent by the seller. Agents charge between 2% and 15% of the sale price and you may be asked to contribute to the cost if more than one agent is used. As a rule, the cost is built into the sale price

  • Legal Fees

A lawyer – Abogado in Spanish – will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1- 1.5% of the purchase price

  • Mortgage costs

If you choose to buy with a mortgage then this will incur several additional costs. First there will be the property valuation that the mortgage provider will require before granting the mortgage. This is paid for the by the buyer and can cost around 500€. Then there will be the costs of the mortgage itself. This varies according to the  provider, and even according to the particular branch. However there is usually some kind of opening fee of around 1% of the value of the mortgage. Finally a  mortgage will increase the Notary expenses

  • Money Transfer Costs

To pay for the property, you will more than likely need to write a banker’s cheque or  make a money transfer. In order to do that, you will need to open an account in a  Spanish bank and transfer money from the bank in your country. The cost of  transferring the money can go up to 0,4% of the amount transferred. The banker’s cheque will most likely cost 0,5% of its amount. Currency Exchange companies offer a more competitive rate for transfers than banks and we can put you in touch with some we have used in the past

In Summary, allow for up to 15% of the purchase price in taxes and other costs


The N.I.E Number is a tax identification number in Spain, formally the Número de Identidad de Extranjero. The Spanish government links the N.I.E number to various other departments such as Social Security and residency and all foreigners are required by law to obtain an N.I.E number for the purchase or sale of real estate, vehicle and boats, or in order to work or study. You will also need one to obtain a Padron from the town hall and to register with a doctor, to open a bank account or have a contract for electricity and telephone services and for most credit card purchases.

Spanish people have an equivalent but it is called a D.N.I number.

In theory, you have to renew the NI..E every three months. In reality, you just renew it as and when you need to have an up to date one

Application for an N.I.E is quite straight forward, and we can help you with this for a low charge of 35€ per person, plus the cost of the application which is around 10€.

Once we have helped you find your ideal property or building plot, you will be asked to pay a €6,000 deposit to reserve the property for you whilst the paperwork is being checked. The deposit is held by the agent or solicitor and is always refundable if there are legality issues which cannot be resolved at or before the time of purchase. However, should you pull out of the deal for any other reason, your deposit is forfeited under Spanish law

Once the paperwork has been checked and you have been given the green light to go ahead by your solicitor, we move to the Compra-Venta (Purchase Contract)

The contract will be drawn up by our legal representative, and will show details of the property, the agreed price and a proposed completion date. The reservation deposit is increased to 10% of the purchase price and once you sign the contract and pay the balance of the deposit, the contract is legally binding for all parties. The deposit is paid to the seller.

On completion day, the sale is completed in front of a Notary and the balance of the purchase price is paid. If you pull out of the deal after signing the Compra-Venta and before the sale completes, your deposit is forfeited as allowed for by Spanish law

In addition to comparing the home to your minimum requirement and wish lists, you may want to consider the following:

  • Is there enough room for both the present and the future?
  • Are there enough bedrooms and bathrooms?
  • Is the home structurally sound?
  • Do the mechanical systems and appliances work?
  • Is the yard big enough?
  • Do you like the floor plan?
  • Will your furniture fit in the space? Is there enough storage space?
  • Imagine the home in good weather and bad – will you be happy with it year round?

Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

You can find out by asking yourself some questions:

  • Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
  • Do I have a good record of paying my bills?
  • Do I have money saved for a down payment?
  • Do I have few outstanding debts, like car payments?
  • Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.