Hidden costs when buying property in Spain: What to consider in advance.

Buying property in Spain requires not only considering the cost of the property itself but also understanding all additional expenses. Many of these costs may come as a surprise if you are not prepared in advance. In this article, we will take a detailed look at the hidden costs that may arise when purchasing and owning property in Spain.

Main Hidden Costs When Buying Property

1. Taxes

We have already covered the main taxes (property transfer tax or VAT for new builds), but there are additional charges that you should be aware of:

• Stamp Duty (AJD): Usually applies to new builds and ranges from 0.5% to 1.5% of the property price.
• Property Tax (IBI): An annual tax calculated based on the cadastral value of the property.

Example: For a property with a cadastral value of €100,000, the IBI tax may range from €400 to €1,100 per year.

2. Notary Fees

All property transactions in Spain must be formalized by a notary. Notary fees depend on the property price and range from €600 to €1,500. These services are subject to VAT (21%), increasing the total cost.

3. Property Registration

Once the contract is signed, the property must be registered in the Property Registry (Registro de la Propiedad). This confirms your ownership rights and protects against potential legal disputes.

Registration cost: Between €300 and €600.

4. Legal Services

To ensure a safe transaction, hiring a lawyer is recommended. A lawyer will:

• Verify the legal status of the property.
• Ensure there are no debts or encumbrances.
• Assist with document preparation.

Lawyer's fees: Between €250 and €1,000, depending on the complexity of the transaction.

5. Real Estate Agency Fees

In most cases, real estate agency fees are covered by the seller, but there are exceptions:

• If you hire a real estate agent to find a property and manage the transaction, the commission may be 3–5% of the property price.
• In some cases, buyers agree on a fixed fee for the agent’s services.

Additional Hidden Costs

1. Translator

If you do not speak Spanish, you may need a translator to assist during the notary appointment and translate key documents.

Translator cost: Between €300 and €500.

2. Utility Bills

After purchasing the property, you will start paying for utilities, such as:

• Water, gas, electricity.
• Maintenance of common areas (if the property is in a building or residential complex).

Tip: Check the estimated monthly utility costs before purchasing, as they can vary significantly depending on the type of property.

3. Property Maintenance

Particularly important for owners of villas and standalone houses:

• Repairs and general maintenance.
• Garden, pool, and communal area upkeep.

4. Community Fees

If you buy a property in a residential complex or an apartment building, you will be required to pay regular community fees (comunidad de propietarios). These fees cover:

• Elevator maintenance.
• Cleaning of common areas.
• Pool, garden, and security services.

Example: Community fees can range from €50 to €300 per month, depending on the complex's infrastructure.

5. Utility Connection and Account Transfer Fees

After buying a property, you may need to transfer utility accounts (electricity, gas, water) into your name or activate new services. This may involve paying:

• Connection deposits.
• Administrative transfer fees.

Example Cost Breakdown for a €300,000 Apartment in Valencia

Useful Tips

• Plan Your Budget in Advance: Allocate an additional 10–15% of the property price for hidden costs.
• Check All Fees: Understand taxes, utility costs, and community fees before signing the contract.
• Seek Professional Advice: A lawyer and real estate agent can help navigate legal aspects and avoid risks.
• Keep All Receipts: Paid taxes and fees may be necessary for tax declarations.

Conclusion

Hidden costs when buying property in Spain can significantly increase the total cost of the transaction. Understanding these expenses and planning your budget accordingly can help avoid unpleasant surprises. If you are ready to buy property, take all these costs into account and consult with professionals in advance. Happy buying!