The purchase tax, and why the region decides it
Spain does not have one property purchase tax. Each autonomous region sets its own, and the gap between the cheapest and the dearest is wide enough to change what you can afford. Buying the same €400,000 resale flat in Madrid or in the Valencia Region is a difference of €12,000 in tax alone.
The other half of the answer is the property itself. Resale property is charged transfer tax, set regionally. New build — bought from the developer, first transfer — is charged VAT instead, which is national, plus regional stamp duty on the deed.
| Region | Resale (transfer tax) | New build | Stamp duty |
|---|---|---|---|
| Madrid | 6% | 10% VAT | 0.75% |
| Canary Islands | 6.5% | 7% IGIC | 1% |
| Andalusia | 7% | 10% VAT | 1.2% |
| Valencia Region | 9%, or 11% above €1,000,000 | 10% VAT | 1.4% |
Reduced rates exist in every region — for young buyers, large families, buyers with a recognised disability. They are worth checking and they are never automatic: each carries conditions, and almost all of them require the property to be your main home, which rules out a holiday purchase.
The costs that are not tax
These are far smaller than the tax and far more predictable. They barely move with the price of the property.
- Notary, for the deed of sale: €600 to €1,100
- Land Registry, to register you as owner: €400 to €700
- Paperwork agent, if you use one to settle the tax and register: €300 to €500
- Valuation, obligatory if you are borrowing: €300 to €500
Add legal fees if you instruct a lawyer, which a non-resident buyer generally should. Estate agency commission is paid by the seller in Spain, not by you.
A worked example
Two purchases at the same price, in two regions, one resale and one new build. Tax is exact; the rest is the midpoint of the ranges above.
| €300,000 resale, Andalusia | €300,000 new build, Canary Islands | |
|---|---|---|
| Purchase tax | 7% — €21,000 | 7% IGIC — €21,000 |
| Stamp duty | not applicable | 1% — €3,000 |
| Notary, registry, agent | ≈ €1,800 | ≈ €1,800 |
| Valuation | ≈ €400 | ≈ €400 |
| Total on top of price | ≈ €23,200 (7.7%) | ≈ €26,200 (8.7%) |
Run the same two in the Valencia Region and the resale figure rises by roughly €6,000; run them in Madrid and it falls by €3,000. The property has not changed.
Three things buyers get wrong
In rough order of how much they cost.
- Budgeting from a rate they read for a different region. There is no national figure to fall back on.
- Assuming the tax is calculated on the price agreed. The tax office works from its own reference value, and where that is higher than the price, the higher figure wins.
- Treating a reduced rate as a discount already secured. Every one of them has conditions, and they are checked after completion, not before.
Frequently asked questions
How much should I budget on top of the price?
Between 8% and 12%. The region and whether the property is new or resale decide where you fall inside that; the fixed costs barely move.
Is new build cheaper or dearer than resale?
In tax terms, generally dearer on the mainland: 10% VAT plus stamp duty against a transfer tax of 6% to 9%. In the Canary Islands it is the other way round, because IGIC is 7%.
Who pays the estate agent?
The seller. Commission is not added to the buyer's costs in Spain, unlike in several other European markets.
Do I pay more tax as a non-resident?
Not on the purchase. Transfer tax, VAT and stamp duty do not depend on where you live. Where residence does matter is in what you pay annually afterwards, and in how much a bank will lend you.
The first assessment is free and carries no obligation.