One of the first questions we hear before a Spanish purchase is simply: "How much money do I need in total?" The answer depends on whether you buy a resale or a new-build property, and whether you take a mortgage. In Andalusia, resale homes carry a transfer tax, while new-builds carry VAT plus stamp duty, and the difference between the two is significant.
In this article we use a €420,000 two-bedroom flat in Estepona to show the costs in both cases. Tax rates are the Andalusian rules in force in 2026; fees are indicative estimates.
Resale property: 7% transfer tax (ITP)
When you buy an existing home from a private seller in Andalusia, you pay a flat 7% transfer tax (Impuesto de Transmisiones Patrimoniales, ITP). Andalusia introduced this single rate in 2021, replacing the earlier banded 8–10% system, and it still applies today.
One detail matters: the tax base is not always the contract price. Since 2022, Spain also uses a reference value set by the Cadastre (valor de referencia). If that value is higher than the price, it generally becomes the base for the tax. This rarely causes trouble, but if you have negotiated a sharp discount, ask your lawyer to check it in advance.
New-build: 10% IVA and 1.2% AJD
If you buy a new home directly from the developer, you don't pay ITP. Instead you pay:
- 10% IVA (Spanish VAT) on residential property, invoiced by the developer and paid along with the instalments;
- 1.2% AJD (Actos Jurídicos Documentados, stamp duty) in Andalusia, on the notarial deed.
The 10% IVA rate covers the home plus parking spaces (typically up to two) and a storage room sold together with it. If you buy a parking space separately, or a building plot, 21% IVA generally applies.
Fees: notary, land registry, lawyer
Notary and land registry fees in Spain follow official scales (Royal Decree 1426/1989 for notaries, 1427/1989 for registries). They rise with the price, though not in a straight line. For a purchase of around €400,000, as a guide:
- notary: approx. €800–1,200;
- land registry: approx. €500–900;
- independent lawyer: a common market fee is about 1% of the price, plus 21% IVA;
- admin agency (gestoría), translations, certified copies: a few hundred euros.
These are estimates; your notary and lawyer will quote exact figures beforehand.
The full example: a €420,000 flat in Estepona
| Item | Resale | New-build |
|---|---|---|
| Price | €420,000 | €420,000 |
| ITP 7% | €29,400 | n/a |
| IVA 10% | n/a | €42,000 |
| AJD 1.2% | n/a | €5,040 |
| Notary (estimate) | €800–1,200 | €800–1,200 |
| Land registry (estimate) | €500–900 | €500–900 |
| Lawyer, 1% + 21% IVA | €5,082 | €5,082 |
| Other admin (estimate) | €300–600 | €300–600 |
| Total costs | approx. €36,100–37,200 | approx. €53,700–54,800 |
| As a share of the price | approx. 8.6–8.9% | approx. 12.8–13.1% |
| Total outlay | approx. €456,100–457,200 | approx. €473,700–474,800 |
Indicative calculation, not a quote. Excludes mortgage, furnishing and currency exchange.
What does the example show? On a resale home, around nine tenths of the buying costs are transfer tax and the lawyer's fee; notary and registry are small by comparison. On a new-build, the 10% IVA dominates, and because it is paid with each instalment, part of the money is tied up months before completion.
A larger example: a €1.2 million villa
The percentages are similar at higher prices, but the absolute sums become serious money. For a €1,200,000 villa, as a guide:
| Item | Resale villa | New-build villa |
|---|---|---|
| ITP 7% | €84,000 | n/a |
| IVA 10% | n/a | €120,000 |
| AJD 1.2% | n/a | €14,400 |
| Notary and land registry (estimate) | €2,400–3,500 | €2,400–3,500 |
| Lawyer, 1% + 21% IVA | €14,520 | €14,520 |
| Other admin (estimate) | €300–600 | €300–600 |
| Total costs | approx. €101,200–102,600 | approx. €151,600–153,000 |
On larger transactions, lawyers often charge a fixed or banded fee rather than 1% of the price, so agree this up front. If you buy a plot rather than a finished villa and build on it, the plot usually carries 21% IVA and construction costs carry VAT too, so the calculation is entirely different.
Contingency: on top of the items above, it is sensible to keep a reserve of 1–2% of the price for small repairs around handover, furnishing and unexpected fees.
If you take a mortgage
Since Spain's 2019 mortgage law (Ley 5/2019), the bank pays the notary fee for the mortgage deed, the land registry entry, the admin agency and the AJD linked to the loan. As the borrower you typically pay the valuation (tasación), usually a few hundred euros, and your own copies. An arrangement fee (comisión de apertura) may apply but is often negotiable. More in our article on non-resident mortgages.
What people tend to forget
- Currency exchange and transfers. Converting forints to euros, the difference between banks' rates is noticeable on several hundred thousand euros. Get quotes in advance.
- Furniture and fittings. New-builds often come with only the kitchen and bathrooms finished. Furnishing a two-bedroom flat is a real line item.
- Utility connections and transfers. Small fees, but they add up.
- The first year of ownership. Community fees, IBI, insurance and, as a non-resident, the annual Spanish tax return.
- Settling up at completion. On a mid-year purchase, IBI and community fees are often split pro rata. Your lawyer also checks that the seller owes nothing to the community, because such debts can stay attached to the property.
- An inventory of furniture. If furniture and equipment are included, attach an itemised list to the contract, so there is no argument at handover about what stays.
| Annual item (first year) | What it is |
|---|---|
| IBI (local property tax) | cadastral value multiplied by the municipal rate |
| Rubbish collection charge | municipal charge, usually yearly |
| Community fees | depend on the complex's services (pool, gardens, concierge) |
| Insurance | buildings, contents and liability |
| Non-resident income tax | due even if you never let the property; see our tax guide |
When is each item paid?
- Reservation deposit and arras: part of the price, paid up front.
- IVA on a new-build: with each instalment of the developer's payment schedule.
- ITP or AJD: after signing, within the legal deadline; your lawyer handles it.
- Notary and registry: around the signing and after registration.
- Lawyer: as agreed, usually partly up front and partly on completion.
In practice, buyers set aside the amount for taxes and fees before completion, and the lawyer pays from it and settles up afterwards.
Always compare total outlay, never asking prices. That is often where the new-build versus resale decision is really made.
If you like, we will prepare an itemised cost calculation for the properties you shortlist, together with our local legal partner. Our Costa del Sol page also has a quick calculator, or ask us for a personal estimate.
This article is general information and not tax or legal advice. Rates can change; for any specific purchase, have a professional do the numbers.
Frequently asked questions
Does everyone pay 7% ITP in Andalusia?
As a non-resident buyer, yes, that is the general rate. Andalusia offers reductions to certain local groups (young first-time buyers, for example), but these are tied to residence and do not apply to a holiday home.
Can the fees be negotiated?
Notary and registry fees follow official scales. The lawyer's fee and any bank arrangement fee are a matter of agreement, so get them in writing up front.
Can I reclaim the IVA on a new home?
Not as a private individual buying for your own use or for holiday letting. The IVA is a final cost of the purchase.
How much of my own money do I need with a mortgage?
As a non-resident, Spanish banks typically lend 60–70% of the price. You fund the rest plus all buying costs yourself, so for a €420,000 resale flat, plan on roughly €162,000 to €205,000 of your own money.
What is the reference value, and how do I find it?
Since 2022, Spain's Cadastre sets a reference value (valor de referencia) for every property, which can be looked up on the Cadastre's online service. If it is higher than the price, it generally becomes the ITP base. Your lawyer checks it before the arras, so there are no surprises when the tax is paid.
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Dr. Gősi Georgina is Monvero's legal advisor. She looks after contracts, legal due diligence and the legal side of tax questions. This article is for general information; for advice on your own situation, get in touch.
