How to buy property in Spain in 2018


For citizens of the European Union.

With Cases and Example Calculations in Barcelona, Mallorca and Ibiza


Table of Contents:


Intro. Why do you need this guide to buy property in Spain, Mallorca and Ibiza?

  1. Before Buying Real Estate in Spain.

    1. Before searching for property
    2. Start searching process
    3. Set search alerts
    4. Get area insights for properties you like
    5. Visit area and properties
    6. On visit: Request. Examine. Ask
  2. Found a home to buy in Spain? About signing an agreement.

    1. Before signing a Real Estate Purchase Agreement (Due Diligence)
    2. Signing the Real Estate Contract
  3. Property Taxes and Costs to be Paid while Buying Real Estate in Spain.

    1. Costs and types of taxes for property buyers in Spain
    2. Costs of owning property in Spain



Intro. Why do you need this guide to buy property in Spain, Mallorca, and Ibiza?

We conducted multiple interviews with second and holiday home buyers from the UK, US, Switzerland, and Germany. And realized that all of them have problems in finding and purchasing prime properties abroad. Combined with uncertainty connected to the new country, the merry idea of buying a holiday property to enjoy the sunny side of life often becomes a true torture for many.

Each and every holiday home buyer confirmed that having a document with a checklist and explanation of each step would massively save their time and money. This is why this guide was created and it aims to help you choose the right property in the right location, to assist you during the whole property purchasing process and to remind you what and to whom you should pay after the dream home is yours.

This real estate buyer’s guide is very complete, so the process of buying and owning property in Spain might seem to be complex, but keep in mind that in most steps your buyer’s agent or lawyer is very experienced and will assist you to make the process more smooth and seamless for you.

Indeed, the process of buying property in Spain is highly standardized and professionalized.

We wish you all the best in this exciting journey and hope you enjoy reading further.


A. Before Buying Real Estate in Spain.


a. Before searching for a property

Finding your dream home is the first important milestone which requires a huge investment of your time to research the area, contact real estate agencies, deciding with whom to work, going for viewings and researching further information on the chosen property. In just 60% of cases real estate agencies speak your native language (wait, what about the remaining 40%) and 70+% have never seen before what they are selling, because they just listed the properties.

This means you as a buyer need to be precise in your search. Therefore more and more buyers nowadays are choosing a buyer’s agent, who does all the “dirty and time consuming job” for them based on their wishes and doesn’t cost anything for the buyer because there is the fee split between the real estate agent’s fee with the buyer’s agent. This work starts from area research, over choosing a real estate agency to work with to finally accompanying the home buying and support afterwards. Most buyers are unfortunately not aware that real estate agencies are mandated by the seller and so in consulting a buyer there is a conflict of interest – it is hard to be impartial, when being paid by the seller.

As for the search, first you need to set your budget and make it clear for yourself how much you want to spend on your dream home (including all fees and costs). Second, for what you want to spend this – means set your criteria for location and size of your property. Be very precise and scrupulous about your criteria, because location and size are the main drivers of value.

The more detailed and clear you have it for yourself, the more efficient the search process will be. This increases the chance, that you find your dream home and you buy what you want to buy and not what a seller wants to sell to you.


b. Start searching process

Now you are ready with setting your budget, criteria for location and property, and activating multiple search alerts. Congratulations! Now the fun part of the searching process starts.

First, collect information on the area on the web or from offline resources. You can spend days and months reading different versions of this or that region guides.
To save your time, you can read the neighbourhood guides we created for you at and get a full overview of each region and village in the Balearic Islands.

Searching for properties is the most challenging part because you can waste not only your time but also your money. According to our research as for 2015 on 10,000+ unique properties in Mallorca, which are on the market for sale at different real estate agencies:

in 10% of cases prices vary by 28% (!) in average;
in 16% of cases bedroom data varies by 1 in average;
in 25% of cases bathroom data varies by 2 in average;
in 28% of cases built surface data varies by 6% in average;
in 39% of cases plot surface data varies by 136 sq.m;
in 83% of cases terrace surface differs by 8% in average.

What does that mean for you? Because there is almost no exclusivity on the real estate market, in order to get accurate information, you need to check all real estate agencies for every listed property. Also due to the huge number of real estate agencies, sellers don’t manage to update all listings when property prices change. In other cases, real estate agencies don’t have direct contact to the property seller hence information might be incorrect.
Save your time and money, check, a prime property marketplace for second home buyers. We compare 1000s of property offers and analyze the price development in each area, so with one click you can get a market overview and decide what real estate agency to contact.

Collect information on a property from as many sources as possible, compare and benchmark prices per square meter in the area, look at the price dynamics and based on this data you can with a high level of confidence make your investment decision. Remember that real estate is one of the best opportunities to multiply your wealth by just making wise decisions on the area and type of property.

And as the last step of your search process, no matter if you do the whole process with a buyer’s agent or without, it’s only you who should choose a property to visit and buy.


c. Set search alerts

In order to be always in the loop and keep yourself updated, set multiple and targeted search alerts with email notifications. So every time when a new suitable property is listed somewhere in the market, you will be instantly notified. Keep in mind that many buyers are seeking for a dream home and great deals, therefore, use of technology is a strong advantage to find new properties before other (buyers) do. Thus, you need to use classifieds, marketplaces and other real estate websites.

But be attentive when you receive the first alerts: check for relevancy of the information received, if it suits all your requirements provided or you received a random selection of properties which are far away from what you are really looking for.


d. Get area insights for properties you like

We mentioned before that you need to do research on the location. Let us go a bit into details what information you need to look at while choosing the neighbourhood.

Look at the infrastructure around the property:

    1. how far is it from the airport?
    2. is it an area with upscale restaurants, golf and yacht clubs, tiny beaches and boutique hotels or there are more pubs, clubs, large beaches and hotels?
    3. what kind of buildings are typical for the neighbourhood: Bauhaus villas, typical fincas, or high rise apartment buildings?
    4. how developed the area’s healthcare is: what hospitals and clinics are around?
    5. how many supermarkets are there and how far are they?
    6. if you have kids, check how far are international colleges;
    7. what facilities to practice your hobbies and do your favourite sports are around?

Then check for the climate in this area:

    1. days of sunshine a year and per month;
    2. days of rain per month;
    3. prevailing winds, how cold or warm, dry or rainy, clean or dusty – each type of wind influences your well-being in a different way;
    4. average air and water temperature during the year;
    5. the sun position plays a very important role, especially during the winter months, as it influences the humidity level in a property.

Development of the area is important in case your second home is considered as an investment which you might be planning to sell in some years to make a surplus revenue. You need to check what are the plans of the local government on the area development so that in some years a huge hotel construction doesn’t start right in front of your windows. Keep in mind to always check the current noise level and constructions around the area. Just imagine you come to your dream home to have some rest and there are ongoing constructions in the neighbourhood and you cannot even do anything against it, because it is all legal and you missed checking it as part of the area research.

Community and neighbourhood are quite important to feel as at home. Choose carefully if you want to live among peers of your nationality or in a totally mixed international community.

Hobby relevance is essential for you to get an idea what you can do in that area. Mallorca offers a big range of different activities for every type of person of every age and gender.

And last but not the least – the beaches. Check types of beaches, how close / far they are from your area, when they are full of tourists, if they are; how secure they are and what nationality prevails on the beach of your choice.

All the above-mentioned points are interconnected and important for you to combine and chose what suits you best so that you can feel safe and at home no matter how long you are in your property.


e. Visit area and properties

After selecting properties to see and getting area insights of them, it’s time to visit them. But before buying a ticket to Mallorca, choose a season and weather for your visit. You need to be sure that you will be able to check everything you planned so that those few days of rain which are on Mallorca don’t spoil your first visit and don’t leave you a wrong impression. Don’t forget to request actual and real property pictures from real estate agents, so you see what you can expect from visiting the properties.

After you’ve done all this, go the area you liked most to stay there longer. Talk to local people and neighbours around to feel and see by yourself everything in order to make the right decision.


f. On Visit: Request. Examine. Ask.

Now it’s time to visit the property. On visit we recommend you to request from the agents the following information:

    1. General plans of the property with description of the house utilities (water, gas and heating systems) if available;
    2. Short description of the property, facilities and services, if available;
    3. Short description of materials which were used to build the property

Second, examine the property’s physical features. Ask for information on:

    1. duration and direction of the sun; which side is windy; all at different times of the year;
    2. isolation of windows to be protected from sun and the wind during each season;
    3. the amount of light the property gets in winter;
    4. humidity in winter, look at the walls (also cellar and shady places);
    5. date of last property reconstruction;
    6. age of electrical and water installations;
    7. water supply – is it communal or private delivery by trucks;
    8. noise level; etc.

Third, ask the seller or real estate agent if he/ she is also there to answer all your questions about the property and neighbourhood, which come later on to your mind. Do ask the real estate agents about the details of pre- and post- buying process and do talk to neighbours to understand who will surround you and your family during your stay.

Summing up all above written, the searching process is all about: search, compare, request, examine and ask. You can contact a buyer’s agent whenever you need, you can instruct a surveyor for a professional detailed report or you can do everything by yourself, which is in any case less advisable – keep in mind the statistic numbers which might lead you to waste a lot of time and money.



B. Found a home to buy in Spain? About signing an agreement.


a. Before signing a Real Estate Purchase Agreement (Due Diligence)

After a detailed searching process, after all the questions you’ve asked and information you’ve requested, you feel better informed but it’s still not enough to buy a property and here the legal part comes into play.

Request and examine the following information from the owner(s):

    1. whom the property belongs to and who are its owner(s);
    2. If there are any open invoices, open liens or burdens (e.g. mortgages or injunctions) which might affect the property;
    3. If there are any lessees or tenants existing;
    4. If any tenant’s association dues or property taxes are owed on it;
    5. what type of taxes apply in your case;
    6. what are the costs of buying and owning this property;
    7. calculate the annual costs (taxes, community fees, insurance, etc.) and divide it between buyer and seller for the year of purchase.

In case you do not have a buyer’s agent/ lawyer you should receive most of above information from the local property registry (registro de la propiedad) in the region where the property is registered. You can contact any property registry in Spain and apply for information in person, via fax, post or e-mail.

Land registry information can be requested on the web page of the Land and Mercantile Registars’ Association of Spain or if you need a land registry extract in English – use the international web page. If you request online, online payment is also accepted. Once the Extract is done, it will be sent to your email address. Moreover, at the association consumer service you can find out to which local registry the property belongs and apply there directly.

Note, that registry information can be received in the following two forms:

    1. An uncertified note (nota simple): this document only provides information for you personally and cannot be used as a legal document to proof non-existence of burdens and liens. It gives a description of the home, location, area, any property appertaining to it, who shares building ownership, mortgages and its liabilities, interests and costs, any injunctions, if there are possible lawsuits where the property can be involved, all tax-related encumbrances and how the land has been classified: “rustico”, “urbano” or “urbanizable”. If you need to know anything specific, please, include it in the application, so that the Land Registry could provide it to you. See a sample of Nota Simple.
    2. Certificate of ownership and burdens: this document is a public document signed by a registrar and can be used in court and other legal proceedings to prove absence or presence of liens. It contains all information which was described in the uncertified note, but everything is explained in more details.

Other complementary documentation should be provided by the seller, such as:

    • authorised copy of the seller’s’ deed of purchase;
    • tax receipt which proves that all property taxes are paid;
    • certificate from the president or secretary of the property tenants, informing that there are no any association dues;
    • formal statement in a deed, stating that there are no leases on the property;

Before the final purchase (here the notary) you should arrange:

    1. Apply for a NIE (Número de Identificación de Extranjero) number: it is used for confirming your identification if you wish to carry out any fiscal function such as opening a bank account, buying a property, car, boat, etc. It is the identification number in Spain for both: EU and non-EU citizens. In order to apply for NIE number, you need to go to the Spanish national police station personally, or it can also be done through a solicitor (abogado); to do so you must give the solicitor your power of attorney (POA) with your passport or a notarized copy of the passport. You cannot enter into a contract for supply of electricity, water or a telephone line without giving your NIE number together with your bank details because these services will only accept clients whose bills are paid automatically from a bank. So it is important to take care of it on your first visit and plan up to 14 days for receiving it;
    2. Bank account: you need to pay all services through your Spanish bank account. Right after getting your NIE, it is highly recommended that you open a bank account. There are leading banks with branches all over Mallorca like Banca March, Banco de Sabadell, Banco Santander, BMN – Banco Mare Nostrum, Barclays Bank, Caixabank, Deutsche Bank. Because of the number of foreign property buyers, the banks should serve you in your native language;
    3. Mortgage/ financing possibilities: this is one of the options which you can use while buying your home and if you go for it, keep in mind:
        1. before you apply to any bank for a loan, the bank will require from you to have the property registered to your name already. This happens simultaneously during the buying process: when you with the seller go to the notary to make your deed of sale, a representative from the bank also joins in person to turn the money over to the seller;
        2. while signing a mortgage loan agreement, always keep in mind the terms of consumer and user protection legislation on the subject of conditions that are not negotiable in such agreements;
        3. in case the property you want to buy carries already a mortgage, you don’t have to take seller’s place in the original mortgage loan. Ask to cancel the seller’s mortgage and you can apply to another financial institution which has a better offer for you;
        4. in case you agree to take the seller’s place and be subrogated to the loan, please make sure that you received a certificate from the seller issued by the lending bank to know how much of the loan has been covered and how much is still outstanding; do ask the bank that holds the mortgage for a better interest rate and better terms, you don’t have to accept everything the way it is. If the bank refuses, you can ask another bank with better terms and conditions to pay off the current mortgage and become your new creditor; moreover, by law these transaction are tax-free.

To sum up all above said on the Due Diligence part, our one advice will be to consult specialists (lawyers, buyer’s agents, etc.) to do the full and complete check. You can mandate a lawyer for 0.5-1.5% fee of the purchase price, for example. Remember, that if there are any houses built illegally on your land which you bought, the government can tear it down at any time, which happened e.g. with Antonio Banderas’ mansion in 2000. Do take the Due Diligence part seriously.


b. Signing the agreement

After you successfully finalised the Due Diligence and the decision to buy a property is made, it is time to sign the agreement and once you have done it, money is paid and keys are handed over, there is no way back. That’s why you need to be sure that the signing part fully corresponds to all legal requirements.

First, negotiate the price. Be creative, there are many ways how you can convince a real estate agent to agree on price negotiation or, if you have direct contact with the seller – even better, you can agree with the seller on a discount. But after receiving one discount – don’t give up. Depending on your survey, do re-negotiate the new price again. Take into account how long the property is on sale, how urgent the seller needs to sell it and other factors that might help you in discount negotiations.

But also compare your offer to other listings and other prices: Be realistic in your expectation and do not scare the seller with an unrealistic offer. Do not forget, if the price is good, there are also many other buyers waiting for opportunities. If you achieve a level of satisfaction with the price, close the deal, close it fast!

Second, you will need to pay a down payment. Usually, it’s 10% from the final price, but it’s not a must. The down payment should be followed by a simple contract until the public deed of purchase is issued. It’s a contract of intentions where the seller expresses his/ her interest to sell to the buyer and the buyer to buy the property. In Spain such agreement is called “Contrato de Arras”, where usually, if the buyer cancels the deal, he/ she loses the down payment, if the seller drops out of the contract – he/ she has to pay the double.

In case of a mortgage, after the down payment is done and there is a “Contrato de Arras” in place, the bank will send its appraiser (tasador) who evaluates the property and only after the appraiser’s valuation the bank can pre-confirm the loan.

Even if you are not going for a mortgage deal, you anyways can use services of an appraiser to know what is the market value of the property. But keep in mind, this is the bank value that often does not value characteristics like “sea view”, “location”, “architect” etc. as the market does.

Third step after down payment: it’s time to close the deal with the agreement and you should know that there are two types of agreements existing:

    1. it can be concluded in a private document, which means no notary was involved. This option is possible only in case when you don’t have a mortgage loan. This form is less recommended, because if you decide to register your property in the property registry, you will need a notarial deed. A private document after signing can be notarised but this should be the mutual will.
    2. On the other side, a notarial deed form is most recommended, because it’s a public document authorised by a public notary and after all notarial check and identifications, the document obtains authenticity which will serve always as a proof of sale. The notary should be chosen by the party which will be paying the notary fees (normally the buyer).

After signing the agreement you should register the deed at the local office of the property registry. Sometimes, you can ask the Notary to send the note to the registry that the deed has been signed, but it’s better you do it by yourself (or by your buyer’s agent/ lawyer) so that you have the guarantees of your ownership. Usually, the costs are around 0.4% of the first 6010 Euros, going down to 0.02% for over 6,010,121 Euros.

Additionally to notarial deed it is important to mention that you need to obtain Escritura, a Title Deed which is a public document that certifies the change of legal ownership and is registered at the Property Register. It contains a brief descriptions of the property, the details of the owners and all information on costs and payments including mortgages and other payments. This escritura is also legally binding regarding the official size and form of the construction.


C. Property Taxes and Costs to be Paid while Buying Real Estate in Spain.


a. Costs and types of taxes for property buyers in Spain

Being a property buyer in Spain, you will deal with different costs and taxes additionally to the property price to be paid. Many buyers look only at the sale price and taxes, but there are more costs involved such as the notary, real estate agents, property registry and other which we will try to explain to you to calculate your full costs. Remember, don’t pay with cash, use bank cheques.

Before starting an overview on taxes which you will need to pay, it is important to mention that obligatory taxes, depend on what type of property you are buying: either VAT & Stamp Duty for new built from a developer or bank (new property) or transfer tax for resale from a private individual (second hand property). Below, we described the two different cases including other common costs and taxes.

Fees to pay when buying a Spanish property may include the following:

    1. Purchase Price Paid to the Seller
    2. VAT & Stamp Duty Taxes for New Build House, Commercial Property or Plot
    3. Transfer Tax for Resale, Previously Owned Property
    4. Income Tax provisions / Vendor’s Capital Gains tax for non-resident seller
    5. Who pays Real Estate and Buyer’s agents’ fees?
    6. Notary Fees
    7. Lawyer Fees (optional)
    8. Deed Registration Fee
    9. Banking Fees and NIE number
    10. Surveyor’s Fee (optional)
    11. Administrative Agents (optional)


    1. Purchase Price Paid to the Seller

      First in the list is, of course, the seller. You pay a down payment and then the final price. Don’t forget to extract the paid amount from the price you have to pay when you sign the final agreement. Normally the transaction is executed in several bank cheques, for the seller, buyer & real estate agents, lawyer, notary (including all taxes).

    2. VAT & Stamp Duty Taxes for New Build House, Commercial Property, Plot

      *VAT in Spain is called IVA.
      **Stamp Duty is “Actos Jurídicos Documentados” or AJD.If you are buying a residential property which is sold for the first time (new property – was not previously occupied), or commercial property or plot of land you have to pay value added tax (VAT). VAT is a national tax, and is calculated according to the property location (Canaries are exception, with their own indirect rate of VAT). Currently (2015) VAT is 10% on the purchase price of a residential property (apartment, finca, villa, etc.), and 21% for a commercial property or plot of land (including garages). VAT is called in the Canaries as IGIC (Impuesto General Indirecto Canario) and is at 4.5%.Additionally to VAT, you have to pay Stamp Duty (known as AJD) to the autonomous community (region), which is about 1% of the price of the purchase, and goes up or down in some regions, so it ranges between 0.1% – 1,5% of the selling price. In the Balearic Islands, it is currently at 1.2%, in Catalonia at 1.5% and in The Canaries at 1%.If you do the purchase on your own you have to fill in an official tax self-settlement form and deposit the sum into the exchequer’s bank account – if you work with a buyer’s agent / lawyer, they will help you to handle this in your name.Examples VAT & Stamp Duty (IVA y Actos Jurídicos Documentados – AJD):

        1. Newly Build Villa in Portals Nous, Mallorca, Balearic Islands: Purchase Price 2,000,000 Euros
          = VAT (2,000,000E*10%) + Stamp Duty (2,000,000E*1.2%) = 224,000 Euros
        2. Plot in Port d’Andratx, Mallorca, Balearic Islands: Purchase price 700,000 Euros
          = VAT (700,000E*21%) + Stamp Duty (700,000E*1.2%) = 155,400 Euros
        3. Supermarket in Barcelona: Purchase Price 2,500,000 Euros
          = VAT (2,500,000E*21%) + Stamp Duty (2,500,000E*1.5%) = 562,500 Euros
        4. Penthouse in Santa Cruz de Tenerife: Purchase Price 600,000 Euros
          = VAT (600,000E*4.5%) + Stamp Duty 600,000E*1%) = 33.000 Euros


    3. Transfer Tax for Resale, Previously Owned Property

      *Transfer Tax in Spain is Impuesto de Transmisión Patrimonial or ITP.If you are buying a second-hand property, so a resale property, you are free from paying VAT and Stamp Duty, but you have to pay transfer tax (ITP – Impuesto de Transmisión Patrimonial) to the autonomous community where the property is located. The amount is set by the autonomous community and starts in ranges between 6 and 8% and can go up to 10%. See examples below and refer to our Overview table “Impuesto de transmisiones patrimoniales (ITP) de la compra (segunda mano)” for the ITP rates in all Spanish regions.

        1. In Mallorca and all Balearic Islands the ITP range is (as in 2015):
          Amount payable on purchase price up to 400,000 Euros – 8%
          Amount payable from 400,001 to 600,000 – 9%
          Amount payable from 600,001 upward – 10%
        2. In Andalucia (Marbella) the ITP range is (as in 2015):
          Amount payable on purchase price up to 400,000 Euros – 8%
          Amount payable from 400,001 to 700,000 – 9%
          Amount payable from 700,001 upward – 10%
        3. In Catalunya (Barcelona) the ITP is (as in 2015) – 10%
        4. In Madrid the ITP is (as in 2015) – 6%

      Example ITP calculation for Mallorca (Balearic Islands):

      Resale Villa in Son Vida, Palma de Mallorca: Purchase Price 1,000,000 Euros
      – 8% on 400,000 Euros = 32,000 Euros
      – 9% on 200,000 Euros = 18,000 Euros
      – 10% on 400,000 Euros = 40,000 Euros
      IN TOTAL: 32,000 + 18,000 + 40,000 = 90,000 Euros

      The ITP value is calculated by the number of “escrituras” (property deeds), so if you buy a house for 1,000,000 Euros with 4 equal apartments and for each apartment is a separate escritura existing, you have 4 single ITP Transactions, each taxed 8% (4x on 250,000 Euros). In contrary if there is only one escritura for the entire house existing, the ITP is measured by the total value 1,000,000 Euros, so ITP goes up to 10% (see the calculation Villa in Son Vida).If you do the purchase on your own, remember, that as a buyer you should know the following information which you will need to pay the taxes:

      1. Place where you should submit the self-assessment form for transfer of the tax (if it’s a second-hand property) or stamp duties (if it’s a new property):
        • if the property is located in a provincial capital, you have to go to the tax bureau for the autonomous community (“Delegacion de Hacienda”).
        • if the property is located in a town which is not a provincial capital – go to the district settlement office which shares quarters with the property registry (“Oficina Liquidadora de Distrito”).
      2. You have one month from the date when the deed is issued to pay transfer tax and Stamp Duty.
      3. Only after paying these taxes you can register the property in the property registry.


    4. Income Tax provisions / Vendor’s Capital Gains tax for non-resident seller

      When the seller is a non-resident, the buyer withholds 3% of the purchase price, which is paid directly to the tax authorities using the application form 211. In other case, tax authority has all rights to consider this property as the asset backing the capital gains tax liability of the seller.The tax in question is the vendor’s capital gains tax, which has to be declared in the vendor’s annual income tax returns (in Spain “La Renta”). In 2015 (August) the actual tax rate is 19.5% and from 2016 onwards 19%. Capital gains tax reclaim can be done, if the vendor believes he is owed a refund (that the tax liability is less than the 3% retention). The vendor then has three months from the date of sale to submit a final tax return (Form 210) along with which they either pay the extra tax due on the sale, or claim the refund due to them. This step should be done at a local tax office (“delegación de hacienda”). The vendor’s capital gains tax is calculated on the “net profit”, that is calculated as: Net Profit = New Purchase Price – Purchase Price – Purchase costs – Maintenance Costs (you should collect all receipts). In Mallorca the vendor’s capital gains tax liability is often greater than the 3% withhold. What happens? Depending upon the size of the liability, the Spanish tax authorities may try to come for it back at your home. The legal deadline for the tax authorities to take action is 4 years.Example vendor’s capital gains tax calculation in Mallorca (Balearic Islands):A person living in London sells a holiday villa in Son Vida, Palma de Mallorca for 1,000,000 Euros in November 2015. The buyer withholds 30,000 Euros and pays it to the tax office. The vendor originally bought the villa in 2007 for 400,000 Euros, paid 50,000 Euros purchasing costs and 200,000 to reform and maintain the villa. So the Net Profit is calculated as 1,000,000 Euros minus 650,000 Euros costs. The result is a capital gain of 350,000 Euros, and a capital gains tax of 68,250 Euros (19.5% in 2015). In this case the vendor will not be entitled a refund and may be pursued for another 38,250 Euros back home in London by the Spanish tax authorities..In case you need more consultation, let us know. If you work with a buyer’s agent/ lawyer, they will handle all of it in your name.

    5. Who pays Real Estate and Buyer’s agents’ fees?

      The fee of the real estate agent in Spain is paid by the seller who contracted him.In most cases, the real estate agent’s fee is 5% + 21% IVA = 6.05% of the purchase price, deducted from the sum the seller receives after the deal is closed at the notary.On the contrary, if the buyer hires the buyer’s agent to represent his interests, the buyer doesn’t have to pay any fee. This work is compensated by the fee split with the real estate agent.
      In this case real estate and buyer’s agents get 50% of the fee each:2.5% + 21% IVA = 3.025%.Whether a buyer uses a buyer’s agent or not, the seller still pays the same fee. The only person that wins when buyers are not represented is the real estate agent. Read more about it in the article “Listing Agent vs. Buyer Agent: Who Works for You?” on

    6. Notary Fees.  

      The notary charges fees for authorizing the deed of purchase and the mortgage loan deed. Usually, by law, the seller pays fees for authorisation of the deed and the buyer – only for copies of the deed. If you have another agreement with the seller, then you can change this rule. Notary fees are set by the government and amount depends on the notarial fees schedule from 0,1% for properties of 400,000 Euros or more around 0,4% for properties valued less than 100,000 Euros. In Mallorca, the fee usually ranges between 1000 Euro and 3.000 Euro. If a mortgage is used, then notary fees have to be paid on the mortgage deeds as well. As a guide count with 0.25% of the declared price of a property including mortgage deeds.

    7. Lawyer Fees (optional)

      If you decide to hire a lawyer for the Due Diligence, the market average fee is 0.5-1.5% and should be negotiated with your chosen law firm. Your lawyer will check property related any liabilities, debt, outstanding mortgages or loans, necessary building licenses, land registry entries, urbanistic infringements etc. Also, your lawyer will ensure the legal ownership change and check the title deed in your interest. Especially if you are a first-time buyer or you just want a smooth, hassle free transaction, we strongly advise working with a lawyer.

    8. Deed Registration Fee    

      The deed must be registered at the local office to guarantee that your property ownership rights are fully protected (on the original deed it is written which office corresponds to you). The charged fee is a standard – 0.4% for the first 6,010 Euros, going down to 0.02% for over 6,010,121 Euros).

    9. Banking Fees and NIE number    

      Monthly banking costs are around 20 Euros and the one time costs for obtaining the NIE number are around 200 Euros. After opening a bank account, you write a banker’s cheque which costs around 0.5% of its amount, but can be often discounted to 0.1% (1,000 Euros for a 1,000,000 Euros transaction) – talk to your bank! Moreover, when you will be transferring money from your home to a Spanish bank account, check for the fees as well. Because of the European SEPA bank transactions scheme these can be free of charge, but be warned that some banks might charge up to 0.1% of the amount which you transferred. In case you need more consultation, let us know. Mortgage / Financing costs (in case you chose the financing). All these costs depend on each service provider or bank / financial institution.

    10. Surveyor’s Fee (optional)

      A building survey in Spain is helpful for property buyers, where a chartered surveyor takes on the role of the buyer and inspects and reports on all matters that could affect the buyer’s equity and quality of enjoyment of the property. Chartered surveyors have a professional indemnity insurance so that if they make a mistake, there is a fund to recompense to you. The fees are in average around 1,000-2,000 Euros.

    11. Administrative Agents (optional)

      In case you contracted an administrative agent to support and do your paperwork, you should count with 1,000 – 2,000 Euros. The fees also depend on the administrative agent’s pricing itself. If you work with a buyer’s agent / lawyer it is included, they will handle this paperwork in your name.Last advice in this section:Make sure if the VAT (IVA) is included when you receive any price quotation, otherwise you will have to count more. In many cases VAT is only included in the final invoice, so try to re-ask or check by yourself.

b. Owning property costs in Spain

After figuring out how much it costs to buy a home, we need to look at how much it costs to own property in Spain. Of course, after buying a property you need to take care of its condition and for that think beforehand about maintenance costs such as swimming pool / garden and housing cleaning, reforming, utility bills, repairing, and other. Normally, it all depends on the service provider you engage and the size of your property (if you have a pool, big garden, etc.).

Additionally to these costs, you will have obligations to pay some taxes and fees as a property owner, these are:

    1. Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI) is a local tax on ownership in Spain which applies for residents and non-residents the same way. It is calculated at an administrative value (Valor Catastral) of the property which is usually much lower than the market value and its rate is between 0.4% – 1.2% varying from one Spanish region to another.
    2. Annual Wealth Tax (Impuesto Sobre Patrimonio) which is as well payable by both, residents and non-residents but not the same way. Residents pay wealth tax on their worldwide assets but have some tax-free allowances, while non-residents pay on their net assets within Spain. Non-residents should pay this tax (applying a rate of 0.2% to 2.5%) for the property and rights situated in Spain, with a minimum exemption of 700,000 €. As an example a Calvia villa with a value of 1,000,000 Euros will be taxed based on 300,000 Euros (700,000 exemption was deducted), so 729.55 Euros annually. On the contrary, a 650,000 Euros apartment in Portixol is tax exempted.
    3. Personal Income Tax (Impuesto Sobre la Renta de No Residentes – IRNR) is applicable for non-residents of Spain and differs if the property is rented out or not. The owners of not rented out properties and those who don’t have any income in Spain pay income tax which is calculated based on the value of their property. The rate is fixed and is calculated as 25% of 2% of the cadastral value of the property (remember the cadastral value is much lower than the actual market price). In case non-residents who rented out their property and receive income, will need to declare this income after deducting expenses from it and then pay taxes on it. The income tax rate is 19.5% in August 2015 (19% in 2016) of the net income (gross income – expenses) you earn from your property. However taxable base and the rate is determined separately in each case taking into account double taxation treaties.
    4. Community Fees have to be paid by owners of properties, when they are part of any development, building or complex where all owners share one common zone and by law have to be members of the community (Comunidad de Propietarios). The budget is always approved only by majority vote of all owners at the yearly general meetings of the community and fees depend on the size of your area, costs which needed to maintain it and services which needed to be hired. You should ask before buying about the community fees, as these can vary a lot.
    5. Utility fees such as Electricity, Water, Telephone and Heating usually are deductible from your bank account on a monthly basis and the costs should be comparable with other European countries.
    6. Insurance also needs to be taken care of. Fire insurance is obligatory by law if you take out a mortgage. Household Insurance will protect your home and furniture. Big operators are Axa Seguros, Liberty Seguros, Helvetia and others – get some offers to compare. In case you need more consultation, let us know, we are happy to help and introduce you.


Now the process of buying property in Spain should be much more transparent to you.
If you have further questions, do not hesitate to contact us!


We wish you all the best for a successful purchasing process.

Your Casafari Team



Additional sources:
GOV.UK: “How to buy property in Spain”
GOV.UK: “Living in Spain”
Rightmove Overseas: Overseas Buying Guide For Spain
Spain Buying Guide: Guide to Successfully Buying Property in Spain
Expatica: Buying a Spanish Property
Spanish Property Insight: Guide to buying property in Spain