Buying a home in Spain is an exciting milestone, but as I quickly discovered, it’s also full of hidden costs and regional tax differences that can catch you off guard.

When I started looking to buy, I assumed taxes and expenses would be fairly uniform across Spain—but that couldn’t be further from the truth.

Here’s what I learned from my own experience and research while navigating Spain’s real estate market.

Property Price and Location Impact

One of the first things I learned is that beyond the property price itself, location also affects taxes and administrative fees. Each autonomous community has its own property transfer tax rate (ITP), and even notary and registry fees can be higher in some regions than in others. Knowing these differences upfront can help set realistic expectations.

For example, when I started looking at properties in Madrid, I found that a mid-range apartment in the city center would cost anywhere from €400,000 to €600,000, whereas a similar property in Valencia or Alicante might be around €200,000 to €350,000.

The price difference was staggering but made sense; it is the same principle everywhere in the world: the more demand, the higher the price, but it didn’t stop there—taxes, agency fees, and even mortgage terms varied greatly depending on the region.

Taxes on Property Purchases

One of the biggest financial shocks for me was the amount of taxes involved in buying a property. I initially assumed that taxes would be similar across Spain, but they vary significantly depending on whether the property is a new build or a resale.

For resale homes, you pay the ITP (Property Transfer Tax), which ranges from 6% to 10% of the purchase price depending on the autonomous community.

How ITP Can Impact Your Purchase

Let’s say you’re buying a €300,000 property. Depending on the region, your ITP bill could be:

Madrid (6%) → €18,000 tax bill
Catalonia (10%) → €30,000 tax bill (€12,000 more than Madrid!)
Balearic Islands (Up to 13%) → €39,000 tax bill

That’s a €21,000 difference just based on location! When I realized this, I became much more selective about where to buy.

💰 Property Transfer Tax (ITP) Rates by Region (2025)

📌 Low Tax Regions (6-6.5%): Madrid, Navarra, Canary Islands
📌 Mid Tax Regions (7-8%): Andalusia, La Rioja, Basque Country, Murcia, Galicia
📌 High Tax Regions (9-13%): Catalonia, Balearic Islands, Valencia, Castilla-La Mancha, Cantabria

Real Cost Breakdown: Buying in Madrid vs. Catalonia

To illustrate how much tax rates can impact your total purchase cost, let’s compare buying a property in Madrid versus Catalonia.

If you're purchasing a €400,000 resale property, the tax you’ll pay varies drastically depending on the region. Here's a side-by-side comparison:

    Property Tax Comparison
    


    Real Cost Breakdown: Buying in Madrid vs. Catalonia
    
        
            Region
            Property Price
            Property Transfer Tax (ITP)
            Total Estimated Closing Costs (12-15%)
            Final Cost
        

            Madrid (6%)
            €400,000
            €24,000
            €48,000 - €60,000
            €472,000 - €484,000
        

            Catalonia (10%)
            €400,000
            €40,000
            €48,000 - €60,000
            €488,000 - €500,000
        

            Balearic Islands (Up to 13%)
            €400,000
            €52,000
            €48,000 - €60,000
            €500,000 - €512,000
        

By purchasing in Madrid instead of Catalonia, you could save €16,000 on taxes alone—and over €28,000 compared to the Balearic Islands. These savings could be put toward renovations, furnishings, or even reducing your mortgage costs.

Madrid (6% ITP) → €24,000 property transfer tax
Catalonia (10% ITP) → €40,000 property transfer tax (€16,000 more than Madrid!)
Balearic Islands (Up to 13% ITP) → €52,000 property transfer tax (€28,000 more than Madrid!)

Now, let’s factor in closing costs, which range from 12-15% of the purchase price. In Madrid, you might pay an additional €48,000-€60,000, whereas in Catalonia, the same costs could be significantly higher due to tax variations.

This means that by simply choosing Madrid over Catalonia, you could save over €20,000-30,000 in taxes and fees on the same property price. This was one of the key lessons I learned while researching where to buy in Spain.

Additional Costs for New-Build Properties

For new builds, instead of ITP, buyers pay IVA (Value Added Tax) at 10%, plus AJD (Stamp Duty), which ranges from 0.5% to 2%. This means that a brand-new €400,000 apartment would come with at least an extra €40,000 in IVA alone.

I also discovered that garages and storage units (trasteros) are often not included in the price of new-build apartments. I had initially assumed that when a developer quoted a price for a property, it included all the essentials, but that wasn’t the case.

For example, a new-build apartment priced at €400,000 in Madrid might not include parking or storage, which means you’d need to pay extra:

Garage space: €15,000 - €30,000
Storage unit (trastero): €5,000 - €10,000

These amounts also attract 10% IVA, adding another €2,000 - €4,000 to the cost. If you don’t account for these extra expenses in your budget, you might end up needing to compromise on location or property features.

Notary and Registration Fees

Every property purchase in Spain must be signed before a notary, and then the deed must be registered under your name. These legal steps add extra costs:

Notary Fees: 0.5% - 1% of the purchase price
Land Registry Fees: €400 - €1,000

For my potential €400,000 home, notary and registry fees added €4,000 to €5,000 to my total expenses. These fees are non-negotiable and must be factored into your overall budget.

Real Estate Fees

Unlike in some other countries, in Spain, some real estate agencies charge both buyers and sellers. I quickly learned to ask upfront about agency fees, as some agencies, like Tecnocasa and La Casa, charge buyers between 2% and 5% of the property price. On a €400,000 home, this could mean an extra €8,000 to €20,000 just in agency fees!

However, not all agencies charge buyers. Some work exclusively on a commission from the seller, so I made sure to clarify this before engaging with any agency.

Mortgage related Cost

Since I planned to take out a mortgage, I also had to factor in additional expenses:

Property Valuation (Tasación): €300 - €600, required by the bank before approving a loan.
Mortgage Arrangement Fee: 0.5% - 1.5% of the mortgage amount, which on a €300,000 mortgage could mean an extra €1,500 - €4,500.
Home Insurance: Many banks require homeowners to take out an insurance policy, costing €250 - €600 per year.

Some banks offered lower mortgage interest rates if I bundled additional services like life insurance, but this needed careful evaluation to ensure it was a cost-effective option.

Energy Certificate (Required for Older Properties by 2030)

By 2030, all resale properties will need an energy certificate (Certificado Energético) to be sold or purchased. The cost of obtaining this certificate varies:

Small apartments: €100 - €200
Medium apartments: €200 - €350
Large homes: €350 - €500

Although it might seem like a minor cost, properties with poor energy ratings could face lower demand or require expensive renovations to improve efficiency.

Other Unexpected Costs

Several additional costs took me by surprise during my research:

Administrative Agency Fees (Gestoría): Many buyers hire a gestor to handle paperwork, costing €300 - €600.
Utility Connection Fees: For new builds, setting up electricity, water, and internet may require deposits or connection fees, adding another €100 - €500.
Moving Costs: Hiring movers ranges from €500 to €2,000, depending on the size of the move.

Looking back, my biggest takeaway is that the real cost of buying a home is much higher than the listing price. If I had only considered the purchase price, I would have severely underestimated my total budget.

For my potential €400,000 home, these were the true costs I needed to consider: