The main costs of purchasing and mortgaging a property in Spain

When you are buying a house in Spain and a mortgage is approved, the bank provides an estimate of the main costs and fees that you will have to pay for the property transaction. Since the new mortgage law came into place in 2019, the banks cover most of the mortgage costs.

In general terms, we recommend clients to set aside between 10% and 14% of the purchase price for the transaction costs. These percentages include the costs explained below.

Main costs explained

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If you purchase a newbuild it is subject to VAT, known as IVA in Spain. VAT is 10% of the purchase price for the newly built residential properties and 21% for commercial properties, plots of land and garages.

If you purchase a pre-owned property, the purchase is subject to property transfer tax (ITP - Impuesto de Transmisiones Patrimoniales). In this case, the tax ranges between 6% and 11% and varies depending on the purchase price and also on the region.

In addition, Stamp Duty (Impuesto sobre Actos Jurídicos Documentados) must also be paid which is between 1% and 1.5% of the purchase price, depending on the region.

For the mortgage the stamp duty applies but this is paid for by the banks.

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For the purchase, the notary and registration fees are covered by the customer and range between 0.10 and 0.50% of the purchase price.

For the mortgage, the notary and registration fees are paid for by the bank.

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The administration fee is charged for handling the payment of the taxes and the registration of the property in the property land registry. This fee is usually between 400 and 650 euros for the property purchase.

For the mortgage the same administration fee is applied but is paid for by the bank.

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A survey or valuation is called a “tasación” in Spain. All valuations for mortgage purposes are regulated by the Bank of Spain and carried out by professional surveyors to ensure that the property can be legally mortgaged. The cost of the valuation depends on the property and the Lionsgate Capital team can help coordinate the valuation for you.

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When arranging a mortgage, it is common for the lender to charge an opening or arrangement fee for setting up the mortgage, especially as the banks cover all the costs (taxes, notary and registry) associated to the mortgage. The fee is usually between 1% and 2% of the mortgage amount.

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Depending on the bank, you may be obliged to take out life insurance or home insurance as a condition for the granting of the mortgage or to obtain a better interest rate.

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An early repayment fee is charged if you decide to cancel part or all the mortgage during the term of the mortgage.

Since June 2019, the new mortgage law establishes that early repayment penalties only apply when the bank incurs a loss at the time of cancelation. The maximum penalty is 0.25% for the first 3 years or 0.15% for the first 5 years and 0% thereafter when there is a variable interest rate. With a fixed interest rate, the maximum penalty is 2% for the first 10 years and 1.50% thereafter.

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At Lionsgate Capital, we are committed to saving our clients an average of 10% or more over the term of the mortgage as well as saving each client substantial time, effort and headaches. We offer a free first call or meeting and work on a success fee of 1% of the mortgage with a minimum fee of €4,500. Our fees are VAT exempt, and if we are not successful we do not get paid, therefore it is a win-win for all!

What would be the total costs of buying a house in Spain?

The total costs to be assumed for the purchase of a property in Spain vary depending on the purchase price of the property. Since the new mortgage law came into place in 2019, the purchase costs are paid for by the buyer whilst most of the mortgage costs are paid for by the banks.

Below are some examples of the transaction costs related to the purchase of a property in Spain. These costs are only an approximation, and they may vary depending on where in Spain the property is located.

Please scroll to view the complete table

Purchase Price
675.000 €
1.000.000 € 1.500.000 € 2.000.000 €
4.000.000 €
Notary
1.600 €
1.800 €
2.200 €
2.400 €
3.000 €
Land Registry
1.100 €
1.600 €
1.900 €
2.200 €
3.300 €
Taxes
57.500 €
90.000 €
145.000 €
200.000 €
420.000 €
Administrative Costs
450 €
500 €
550€ 
600 €
650 €
TOTAL
60.650 €  
93.900 € 
149.650 € 
205.200 € 
426.950 € 

The bank covers all mortgage costs except for the property valuation and arrangement fee

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