Purchase costs and taxes when buying property in Andalusia

The tax regime applicable to a purchase depends first on a simple criterion: is the property considered new (first transfer by the developer) or resale (second transfer or later)? For new build, the purchase is subject to VAT (IVA) at 10% of the price, plus AJD (Actos Jurídicos Documentados), a stamp duty on notarised deeds set at 1.2% in Andalusia. For resale property, the purchase falls under ITP (Impuesto de Transmisiones Patrimoniales), a regional transfer tax set at a flat 7% of the price in Andalusia, with no tiered bands under the current regional rules.

This difference largely explains the gap in total acquisition cost between buying new and buying resale, although new build often carries additional costs such as setting up the community of owners and higher initial service charges. The choice between new and resale should therefore never rest on the headline price alone, but on the total cost of acquisition.

Whether a property qualifies as new or resale can also depend on specific rules (time elapsed since first occupation, the identity of the seller), which should be checked by the lawyer before signing the arras deposit contract, since a mistaken tax classification can later lead to a reassessment payable by the buyer.

Beyond the main tax (ITP or VAT + AJD), several fixed or proportional fees are systematically added:

• Notary: fees follow an official scale and depend on the price and the length of the deed; expect roughly 0.2% to 0.5% of the price, decreasing as the value rises.
• Land registry (Registro de la Propiedad): registering the purchase, usually half to two-thirds of the notary cost, around 0.1% to 0.3% of the price.
• Lawyer: an independent lawyer acting for the buyer (strongly recommended, especially for non-residents) typically charges around 1% of the price net of tax, plus 21% VAT on the fee, with a common minimum of €2,500 to €3,500 on smaller transactions.
• Gestoría: this administrative agent handles tax filings and registration; the cost is modest, roughly €300 to €600.
• Bank and mortgage fees: account opening, international transfer, and if financing is used, arrangement fees, a mandatory valuation (tasación, about €300 to €600) and mortgage registration fees. Since the 2019 reform of the mortgage law, most taxes and fees linked to setting up the mortgage (mortgage AJD, mortgage notary, registry) fall on the bank, which reduced the cost for borrowers, but valuation and arrangement fees generally remain payable by the buyer, depending on the bank.

It is advisable to request a detailed written quote from each party involved (notary, lawyer, gestoría, bank) before signing anything, as pricing practices vary noticeably between firms, particularly for lawyer fees, which are not regulated. In practice, it is common for the buyer's agency and lawyer to prepare a projected cost breakdown together as soon as an offer is accepted, so that no surprises arise on the day the notarised deed (escritura) is signed.

Owning property in Andalusia generates annual charges that should be built into the long-term budget:

• IBI (Impuesto sobre Bienes Inmuebles), the local property tax, calculated on the cadastral value (valor catastral), which is usually well below market value; the rate varies by municipality.
• Basura tax, the household waste collection charge, billed separately by the town hall, typically €150 to €400 a year depending on the municipality and property type.
• Community fees (comunidad de propietarios), paid monthly, vary widely depending on the services provided (pool, gardens, security, concierge): from around €100 a month for a standard apartment block to over €1,000 for a luxury development with hotel-style services.
• Home insurance, compulsory if there is a mortgage and strongly advisable in any case, priced according to the value of the property and its contents.
• Non-resident income tax (IRNR, modelo 210): even without renting it out, a non-resident owner in Spain must declare an annual deemed rental income (imputación de renta inmobiliaria), calculated as a percentage of the cadastral value, and pay tax on it, generally at 19% for residents of the European Union, the European Economic Area and, under certain conditions, the United Kingdom, and 24% for residents of other countries. If the property is rented out, actual rental income replaces this deemed income and is taxed under specific rules, with expense deductions available only to EU/EEA residents.

Spain levies a regional wealth tax (Impuesto sobre el Patrimonio), with rules that vary by autonomous community. Since 2022, Andalusia has applied a 100% relief on this regional tax, meaning that an owner whose Spanish wealth is tax-attributed to Andalusia effectively pays no regional wealth tax, subject to filing the return and the usual exempt thresholds (main residence for residents, tax-free allowance for non-residents).

This regional relief does not, however, remove the national solidarity tax on large fortunes (Impuesto de Solidaridad de las Grandes Fortunas), introduced to stop regional reliefs from fully eliminating tax on the highest wealth levels. It applies to net worth above €3,000,000, with a mechanism that deducts any regional tax already paid, so that in Andalusia, where the regional relief is total, it is in practice this national tax that applies above the threshold. This point warrants individual review with a tax adviser, as it depends on the composition and valuation of the taxpayer's worldwide wealth, not only the Spanish property.

On resale, two distinct taxes apply to a non-resident seller. First, the capital gain realised (the difference between the sale price and the acquisition price, adjusted for costs and improvements) is taxed at 19%. Second, the buyer is legally required to withhold and pay to the tax authorities 3% of the sale price, as a payment on account of this tax owed by the non-resident seller; this withholding is then reconciled by the seller in their tax return, with any excess refunded if it exceeds the tax actually due.

In addition, the seller is liable for the plusvalía municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana), a local tax calculated on the increase in the cadastral land value since acquisition, not on the sale price. Since the 2021 reform, taxpayers can choose the more favourable calculation method, and the tax is not due if no cadastral gain can be shown. Its amount depends heavily on the municipality and the holding period, and should be estimated case by case before putting a property on the market.

Finally, the holding period can also interact with any bilateral tax treaty between Spain and the seller's country of residence, which may affect how the capital gain is taxed at home; a non-resident seller therefore benefits from planning these rules with tax advice on both sides, ideally before signing the deposit contract.