Buying a house in Spain, specifically on the sunny Costa del Sol, is a dream of many. Whether it is a second residence for overwintering, a holiday house near golf courses or a permanent move to Estepona - the beautiful coastal region has something for everyone. But what are the real costs when buying a house in Spain? What additional costs are involved in buying a property? In this article, we list all the costs involved in buying a Spanish home so that you are perfectly prepared for your investment.

Purchase costs for a house in Spain

If you are buying a house in the Costa del Sol (located in Andalusia), you should consider the following costs on top of the purchase price. The costs below for your home purchase in Spain are essential to include in your budget.

For new-build homes:

• 10% VAT (IVA in Spanish)
• 1.2% Stamp duty (AJD - Impuesto de Actos Jurídicos Documentados)

For existing homes:

• 7% Transfer tax (ITP - Impuesto de Transmisiones Patrimoniales)

Additional costs for each purchase

In addition to the taxes mentioned above, there are other costs to consider:

• Notary fees: about 0.5% of the purchase price
• Registration in the land register: about 0.4% of the purchase price
• Lawyer fees: 1-1.5% of the purchase price (strongly recommended to ensure legal certainty)
• NIE numberr (tax identification number for foreigners): about €150 per person
• Power of attorney for attorney: approximately €150 if you cannot attend all steps in person

Total cost of buying a house in Spain in figures

As a rule of thumb, you can count on about 10-12% extra cost on top of the purchase price for an existing home and about 12-14% for a new home on the Costa del Sol. This total cost buying house in Spain is higher than in Belgium or the Netherlands, but on the other hand, the base price of property is often more attractive.

Concrete example: €500,000 home

* Percentages for the region of Andalucia.

Financing via mortgage

If you want to finance a property through a mortgage, keep the following points in mind:

• Spanish banks typically finance up to 60-70% of the purchase price for non-residents
• Valuation fee: €300-600
• Possible opening cost for mortgage: 0-2% of borrowed amount
• Additional notary and land registry fees for the mortgage deed

For a 60% mortgage on a €500,000 property (i.e. €300,000), there will be about €7,500-€10,000 in additional costs.

Annual cost after purchase

After purchasing your property on the Costa del Sol you should also take into account annual fees and/or taxes such as:

• IBI (property tax), about 0.4-1.1% of cadastral value
• A contribution for rubbish collection/processing
• Community charges
• An income tax for non-residents (limited to around 0.2% for non-rented properties)
• And insurance

If you want to rent out your property, also take into account the cost of rental licences.

Why choose a property on the Costa del Sol?

Despite this costenn have 5 good reasons to investing in real estate on the Costa del Sol:

1. Stable property appreciation (16.87% increase in Estepona between 2023-2024)
2. High rental yield (4-6% in luxury segment)
3. Excellent climate with 325 sunny days a year
4. Excellent infrastructure and facilities
5. Convenient lifestyle with opportunities for golfing and other outdoor activities

Conclusion: the real costs when buying a house in Spain

Good preparation is important in all financial decisions, including the purchase of a house in Spain. Those purchase costs are considerable, we won't be flippant about that, but with the right guidance, everything is 100% transparent and you won't encounter any unpleasant surprises. By the way, don't forget the emotional aspect of buying a dream home and how many great times you will have on the Costa del Sol.

Whether you opts for a new-build home or an existing property, in Estepona or elsewhere on the Costa del Sol, make sure you are well informed and let experts guide you With local knowledge of the Spanish property market such as Alness.