A €400,000 Costa del Sol property does not usually mean a €400,000 cheque. Whether you are choosing a resale flat in Estepona, a townhouse near San Pedro or a newly built villa, Spanish property purchase costs need to sit alongside the agreed price from the moment you start viewing. For most buyers, allowing roughly 10% to 15% above the purchase price is a sensible starting point, but the right figure depends chiefly on whether the home is a resale or a new build, and whether you are using a mortgage.
The largest costs are taxes. The rest - legal work, notary and Land Registry charges, valuations and banking arrangements - are smaller individually, but still deserve a clear place in your budget. Getting the figures right before making an offer gives you confidence and reduces the risk of a last-minute shortfall before completion.
Spanish property purchase costs at a glance
In Andalucía, a resale purchase is normally subject to Property Transfer Tax, known as ITP. The general rate is currently 7% of the declared purchase value. A new-build property bought from a developer is treated differently: buyers generally pay 10% VAT, known in Spain as IVA, plus 1.2% stamp duty, known as AJD.
Those are the headline figures, but they are not the complete buying budget. Legal fees, notary and registration charges, mortgage-related costs and practical transfer expenses still apply. Tax rates and rules can change, and a particular transaction may have features that affect the calculation, so your independent Spanish lawyer should confirm the position before you commit.
Resale homes: ITP is the main tax
For an existing home being sold by a private owner, ITP is usually the biggest additional expense. On a €300,000 resale property, 7% ITP would be €21,000. On a €500,000 purchase, it would be €35,000.
This applies across the market, from a holiday flat in La Cala or Manilva to a Marbella villa. The tax is generally paid after the title deed is signed, within the prescribed deadline, and your lawyer or appointed gestor can arrange the filing. Do not confuse the tax with your deposit: the deposit is part of the agreed purchase price, whereas ITP is an extra cost.
New builds: VAT and stamp duty
When buying a brand-new property directly from a developer, VAT normally replaces ITP. For residential property, VAT is generally 10%, with AJD at 1.2% in Andalucía. Together, this creates a tax allowance of 11.2%.
A €400,000 new-build home, for example, would usually carry €40,000 in VAT and €4,800 in AJD. Check carefully whether the developer's advertised price is stated before or after VAT, especially when comparing new developments with resale homes. A new build may offer modern energy efficiency, warranties and lower early maintenance needs, but its upfront tax bill is normally higher than the equivalent resale purchase.
The professional costs around your purchase
A good purchase is not just a matter of signing the deed. Your lawyer's role is to check ownership, planning status, debts, community matters, licences where relevant, and the contract terms. This is particularly valuable for overseas buyers who cannot easily handle local paperwork or attend every meeting in person.
Independent legal fees commonly sit around 1% of the purchase price plus VAT, although some firms use a fixed fee or a sliding scale. Ask what is included. A lower quoted fee may not cover obtaining your NIE number, arranging a power of attorney, tax representation, utility changes or post-completion registrations.
Notary and Land Registry charges are regulated and vary with the transaction. As a working allowance, many buyers set aside around €1,000 to €2,000 for a typical purchase, although higher-value or more complex deeds can cost more. The notary witnesses the signing of the public deed, while the Land Registry records your ownership. Both are essential stages, not optional extras.
You may also see a gestor fee. A gestor is an administrative professional who can process tax payments and registrations. In some cases the lawyer handles this work within their fee; in others, it is charged separately. Request an itemised estimate so every party's role is clear.
Mortgage, currency and bank costs
If you are financing your Costa del Sol home with a Spanish mortgage, build in the cost of the valuation. This is typically paid by the borrower and is often a few hundred euros, depending on the property and lender. A lender may also charge an opening commission, although this is not universal.
Spanish mortgage rules generally place several formalisation costs on the lender, including the mortgage deed's stamp duty and certain notary, registry and administration costs linked to the mortgage itself. That does not remove your purchase taxes or your own legal fees, and it does not mean every bank offer is identical. Compare the mortgage's interest rate, term, arrangement fees, early repayment terms and required insurance products rather than looking only at the monthly payment.
For UK and other non-euro buyers, the currency exchange can make a material difference. A movement in the pound-to-euro rate between reservation and completion can change the sterling cost of the property by thousands. Bank transfer charges and exchange-provider fees are comparatively small, but the exchange rate itself deserves planning. Establish how and when funds will be converted before you sign a contract with fixed euro deadlines.
Costs that are easy to overlook
Some expenses are not compulsory in every transaction, but they are worth considering before you set your maximum offer. A survey is not a legal requirement in Spain, yet it can be a wise precaution for an older home, a property that has been extensively renovated, or a villa with a pool, retaining walls or large grounds. Your lawyer's checks and a building survey serve different purposes.
You will need an NIE number to buy property in Spain. The application fee is modest, but using a professional to arrange it, or granting power of attorney if you cannot travel, adds to the total. Home insurance may be required by a mortgage lender and is sensible from completion day. For a holiday home, include set-up costs for utilities, internet, furnishing and security if the property will be empty for periods of the year.
Community fees are another point to investigate before purchase. They are not a completion cost in the same sense as tax, but they affect your annual ownership budget. Ask for the latest community accounts, current fees, planned works and confirmation that the seller is up to date. A beachfront development with gardens, pools, lifts and 24-hour security may suit your lifestyle perfectly, but it will usually cost more to run than a simple village property.
Estate agency commission is commonly paid by the seller in standard Costa del Sol residential sales. Still, confirm this in writing before proceeding, particularly if you have engaged a buying agent or are considering an off-market opportunity where a separate buyer-side fee could apply.
A practical budget example
Suppose you buy a €400,000 resale home in Andalucía without a mortgage. ITP at 7% is €28,000. If legal fees are 1% plus VAT, that is €4,840. Allowing approximately €1,500 for notary and registry charges brings the estimated transaction costs to around €34,340, before any survey, NIE assistance, currency costs or optional services.
For a €400,000 new build, the tax calculation changes. VAT at 10% is €40,000 and AJD at 1.2% is €4,800. Add the same illustrative legal fee and €1,500 allowance for notary and registration, and the total is approximately €51,140 before extras. These examples are useful for planning, not a substitute for a tailored cost sheet.
Do not treat the reservation payment as an extra charge
After finding the right home, buyers often pay a reservation amount to take it off the market, followed by a deposit under a private purchase contract. The amount and timing vary, though a 10% deposit is common. Provided the contract is correctly structured, these payments form part of the property price due at completion.
What matters is understanding the conditions attached to them. Before paying, ensure your lawyer has reviewed the reservation document or contract, confirmed who holds the money, and explained what happens if either side cannot complete. This is one area where quick decisions should still be properly protected.
A well-prepared budget leaves room for the property you want and the professional support that helps you buy it safely. Before you make an offer, ask Best in Spain for a realistic local cost outline and appoint an independent lawyer early - then you can focus on choosing the home under the sun that genuinely fits your plans.