The Two Tax Regimes: Resale vs New-Build
The taxes you pay when buying property in Spain depend primarily on whether the property is a resale (second-hand) or a new-build purchased directly from a developer. The difference is significant — resale properties are subject to transfer tax, while new-builds attract VAT and stamp duty.
Tax rates are set by Spain's autonomous communities and can change. The figures below reflect rates as of early 2025. Always confirm current rates with a tax advisor or gestoría before budgeting.
Taxes on Resale Properties
Property Transfer Tax (ITP)
When you buy a resale property, you pay Impuesto de Transmisiones Patrimoniales (ITP) instead of VAT. The rate varies by region:
| Region | Standard ITP Rate | Notes |
|---|---|---|
| Andalusia (incl. Costa del Sol) | 7% | Flat rate since 2021 reform |
| Madrid | 6% | Flat rate — one of the lowest in Spain |
| Catalonia | 10% | Higher rate; surcharge on properties over €1M |
| Valencia | 10% | Reduced to 8% for first homes under certain conditions |
| Balearic Islands | 8–13% | Progressive scale based on purchase price |
| Canary Islands | 6.5% | Canaries use IGIC system, not mainland IVA/ITP |
| Murcia | 8% | Standard rate |
Some regions offer reduced ITP rates for specific buyer categories — for example, buyers under 35, large families (familia numerosa), or people with a disability above 33%. These reductions can lower the rate by 1–4 percentage points. Ask your lawyer whether you qualify.
As a practical example: buying a resale apartment in Marbella for €300,000 means paying €21,000 in ITP at Andalusia's 7% rate.
Taxes on New-Build Properties
VAT (IVA)
Purchasing a new property from a developer attracts IVA (Value Added Tax) instead of ITP. The standard rate is 10% of the purchase price. In the Canary Islands, the equivalent is IGIC at 7%.
Stamp Duty (AJD)
In addition to IVA, new-build buyers pay Actos Jurídicos Documentados (AJD) — stamp duty on the public deed. Rates vary by region, typically 1–1.5% of the purchase price. In Andalusia, AJD is 1.2%.
Example: a new villa in Estepona priced at €500,000 would incur €50,000 in IVA plus €6,000 in AJD (1.2%) — totalling €56,000 in taxes alone.
Legal and Administrative Fees
| Fee | Typical Cost | What It Covers |
|---|---|---|
| Notary fees | €600–1,500 | Preparation and signing of the public deed (escritura). Set by official tariff based on property value. |
| Land Registry fees | €400–1,000 | Registration of the property in your name at the Registro de la Propiedad. |
| Lawyer fees | 1% of purchase price, or €1,500–3,000 fixed | Due diligence, contract review, tax filing, and representation at the notary. |
| Gestoría fees | €300–500 | Administrative processing — tax filings, utility transfers, registration follow-up. Sometimes included in lawyer fees. |
Mortgage-Related Costs
If you're financing the purchase with a Spanish mortgage, there are additional costs:
- Property valuation (tasación): €300–600, paid by the buyer
- Mortgage arrangement fee: 0.5–1% of the loan amount (some banks waive this)
- Notary and registry fees for the mortgage deed: paid by the bank since the 2019 mortgage law
- Insurance: most banks require home insurance and may push life insurance as a condition for better rates
Total Cost Summary
Here's what a €300,000 purchase looks like with all costs included:
| Cost Item | Resale (€300,000) | New-Build (€300,000) |
|---|---|---|
| Transfer Tax (ITP) / VAT (IVA) | €21,000 (7% Andalusia) | €30,000 (10% IVA) |
| Stamp Duty (AJD) | — | €3,600 (1.2% Andalusia) |
| Notary fees | €1,000 | €1,000 |
| Land Registry | €700 | €700 |
| Lawyer fees | €3,000 | €3,000 |
| Total additional costs | €25,700 (~8.6%) | €38,300 (~12.8%) |
These figures are for Andalusia. In regions with higher ITP rates (Catalonia at 10%, Valencia at 10%), the resale total would be higher. For a deeper look at costs that often catch buyers off guard, see our article on hidden costs when buying property in Spain.