Spanish property costs and taxes: VAT, ITP, IBI and community fees

Why you should calculate costs upfront

The purchase price of a Spanish property is only half the equation. Taxes and fees at purchase add 10-13% on top, and ownership brings recurring annual costs. Buyers who budget for both see their true net yield.

Taxes payable at purchase

New-build: 10% VAT (IVA) plus 1.2% AJD

For new-build property the developer charges 10% VAT (IVA) on the purchase price, plus stamp duty (AJD) at 1.2% in Andalusia. On a 300,000-euro apartment that is 30,000 euros VAT and 3,600 euros AJD.

Resale: ITP transfer tax

Resale property carries no VAT. Instead you pay ITP (Impuesto de Transmisiones Patrimoniales), a flat 7% of the purchase price in Andalusia. AJD does not apply to resales.

Other purchase costs

• •Notary fee: approx. 800-1,500 euros
• •Land registry: approx. 400-800 euros
• •Legal fees: 1-1.5% of purchase price
• •Mortgage costs if financing: valuation approx. 400 euros, arrangement fee 0-1%

Total: roughly 12-13% of the price for new-builds, 9-10% for resales.

Recurring annual costs

IBI: the local property tax

IBI (Impuesto sobre Bienes Inmuebles) is the annual municipal property tax, based on the cadastral value (valor catastral), which is typically well below market price. Rates on the Costa del Sol run 0.4-1.1% of cadastral value, so a 300,000-euro apartment usually pays 350-700 euros per year, billed once or in two instalments and payable by direct debit.

Comunidad: the community fee

The monthly comunidad de propietarios fee covers shared-area upkeep: pool, gardens, lifts, security, communal lighting and building insurance. Typical Costa del Sol ranges:

• •Simple apartment block with pool: 60-110 euros/month
• •Standard new-build with gardens and gym: 110-200 euros/month
• •Premium resort with concierge, spa and 24h security: 200-400 euros/month
• •Detached villa: little or no comunidad fee, but pool and garden maintenance runs 150-300 euros/month

Before buying, always request the community's annual budget and any planned special levies (derrama), as these can be sizeable one-off charges.

Utilities

Water, electricity and internet for a two-bedroom apartment average 90-160 euros per month, dropping to a fraction of that when empty, since standing charges continue. Air conditioning and pool heating can push summer and winter bills noticeably higher.

Refuse charge (basura)

The municipal waste collection charge runs 90-200 euros per year depending on the town and is billed separately from IBI.

Property insurance

Apartment insurance costs 200-400 euros per year; a villa runs 500-1,200 euros. Lenders require it when there is a mortgage.

Taxes during ownership

If you rent the property out

As an EU citizen you pay 19% tax on Spanish rental income and can deduct running costs (comunidad, IBI, insurance, management fees, depreciation, repairs) from the taxable base. Quarterly filing via Modelo 210 is required.

If you keep it for personal use: imputed income tax

Non-residents who keep a property for their own use still pay a nominal tax: Spain treats 1.1-2% of the cadastral value as imputed income and taxes it at 19%. On a 150,000-euro cadastral value that is roughly 310 euros per year.

Wealth tax (Impuesto sobre el Patrimonio)

Andalusia applies a near-total rebate on wealth tax, so most buyers pay nothing. The national solidarity tax only applies to portfolios above 3 million euros.

Worked example: 300,000-euro new-build in Estepona

• •One-off costs: VAT 30,000 euros, AJD 3,600 euros, notary and registry approx. 1,800 euros, legal approx. 3,600 euros. Total approx. 39,000 euros.
• •Annual costs: IBI approx. 500 euros, comunidad approx. 1,680 euros (140/month), insurance approx. 300 euros, refuse approx. 140 euros, utilities approx. 1,200 euros. Total approx. 3,820 euros.

If you rent it out, add management fees (15-25% of gross revenue for short-term lets), though rental income covers these.

What to check

Before signing, request the exact comunidad fee, the latest IBI bill and a nota simple extract to confirm there are no debts attached. In Spain unpaid charges follow the property, not the seller.

Next step

Request a personalised quote and within 24 hours we will send you Costa del Sol projects matching your budget, with a full cost and yield breakdown.