It’s no secret that property prices in Spain are more affordable than they are in places like the UK and the US. But the true cost of buying goes beyond the asking price. Here’s what you need to budget for to avoid costly surprises…

Buying a home in Spain offers more than just better weather and a relaxed pace of life – it can also be far more affordable. But before you start picturing yourself on that sunny terrace, it’s essential to get a clear view of the full costs involved. From taxes and legal fees to currency exchange and utilities, there are several expenses you’ll need to plan for upfront.

In this guide, we give you a realistic breakdown of what you can expect to pay, explain how costs can vary depending on location and property type and show you how smart planning can save you thousands.

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Table of contents

• Spanish property purchase costs
• Property valuation and surveys
• Currency risk and transfer fees
• Bank charges and mortgage-related fees
• Utilities and service connections
• How to reduce the overall cost of buying

Spanish property purchase costs

As a general rule, budget an extra 10-15% on top of the property’s price. These additional costs include various taxes, professional fees and administrative charges. Some are fixed or regulated, while others can vary based on region or your negotiation skills.

As a general rule, budget an extra 10-15% on top of the property’s price

Transfer tax (ITP)

If you’re buying a resale home, you’ll pay ITP. This ranges from 6% to 10% depending on the region. For example, in Valencia (which covers the Costa Blanca) it’s 10%, while the Canary Islands offer a more favourable rate at 6.5%.

VAT (IVA)

For new build homes, IVA of 10% replaces ITP. It applies to off-plan or newly completed properties purchased directly from developers.

Stamp duty (AJD)

This is a separate tax for notarising the property deed. It ranges from 0.75% in the Canary Islands to 1.5% in Valencia.

Notary and legal fees

Notary fees are regulated and linked to the property’s value. Legal fees are around 1 to 2%, but it’s worth hiring a bilingual, independent solicitor for a smooth process.

Estate agent fees

These are typically included in the sale price and paid by the seller, although in rare cases they may be shared.

Property valuation and surveys

If you’re applying for a mortgage, a valuation by a lender-approved appraiser is compulsory. This usually costs between €200 and €600. Even if you’re buying outright, it’s still a good idea to get a valuation to ensure the asking price is realistic.

Additionally, you may choose to commission a private survey to check for structural issues or renovation needs. In older homes or rural fincas, this can be an excellent investment and often provides valuable leverage for negotiating the price.

Remember, surveys are optional in Spain, unlike in the UK, but they can prevent costly surprises.

You may choose to hire a surveyor for added peace of mind

Currency risk and transfer fees

One of the most overlooked buying costs is currency transfer. Exchange rate movements between agreeing a price and completing can change the amount you pay in your home currency – sometimes dramatically.

For example, a €250,000 property could cost £10,000 more or less depending on when you exchange. That’s why many buyers use a forward contract from a currency specialist like Smart Currency Exchange. It locks in your rate for up to 12 months, protecting your budget.

Using a dedicated currency provider can also reduce your transaction costs, offering better rates than banks and typically zero transfer fees. This is especially important for large sums, such as your deposit and final balance.

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Bank charges and mortgage-related fees

If you’re financing your home with a Spanish mortgage, you’ll need to account for:

• Mortgage arrangement fees: typically 1-2% of the loan amount
• Opening commission: often around 0.5-2%
• Bank valuation fee: between €200 and €600
• Other admin fees: document handling, insurance and translation (if applicable)

Most of these fees can be negotiated with the bank or broker. Some lenders also offer bundled services which may reduce individual charges.

Note that Spain’s mortgage market has become more transparent in recent years, and lenders are now required to disclose all terms upfront under the new EU mortgage credit directive.

Utilities and service connections

At completion, you’ll need to register or transfer water, electricity and possibly gas contracts into your name. If services are already active, this is a simple administrative process. If not, connection fees will apply and vary by supplier and region.

Some buyers also install broadband, air conditioning or security systems after purchase, so be sure to budget for those as post-sale expenses.

Shopping around for electricity and internet providers can lead to long-term savings – many areas now offer fibre-optic internet (ideal if you’re working remotely or managing the property from abroad).

How to reduce the overall cost of buying

There’s no avoiding taxes or legal fees, but there are ways to bring down your total spend:

• Choose a lower-tax region: for example, the Canary Islands’ ITP is 3.5% cheaper than in Valencia or the Balearics.
• Negotiate the purchase price: most Spanish sellers expect offers below asking price – especially if the property has been on the market for a while.
• Fix your exchange rate: protect your budget with a forward contract early in the buying process.
• Get a good lawyer: paying a little more for excellent legal advice can save you thousands in future issues.
• Buy wisely: some resale homes come fully furnished or with lower community fees than newer developments – ask your agent to highlight these options.

Also consider running costs post-purchase – such as IBI property tax, rubbish collection fees and community charges – which vary significantly by location and property type.

Final thoughts

Buying property in Spain doesn’t have to come with budget shocks. With expert guidance and a solid understanding of the buying costs, you’ll be in a great position to make confident decisions and avoid unnecessary surprises. Knowledge truly is power – especially when it comes to realising your overseas dream safely and affordably.

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