You have found the right property, agreed a price, and then the real question lands – what taxes do buyers pay in Spain? It is one of the first things overseas buyers ask us, and rightly so, because the tax bill depends on what you are buying, whether it is a resale or a new-build, and in some cases which region the property is in. Get this clear early, and budgeting becomes far less stressful.
For most buyers, the main taxes fall into one of two categories. If you are buying a resale property, you will usually pay transfer tax. If you are buying a brand-new property from a developer, you will usually pay VAT and stamp duty instead. The detail matters, because the difference can be significant.
What taxes do buyers pay in Spain on a resale property?
When you buy a resale home in Spain, the usual tax is ITP, which stands for Impuesto sobre Transmisiones Patrimoniales. In plain English, that is property transfer tax. This is paid by the buyer, not the seller, and it is normally calculated as a percentage of the purchase price or the fiscal value used by the tax authorities, depending on which is higher.
In Andalusia, where many of our buyers focus their search, ITP is currently charged at a flat 7% in standard cases. That means if you buy a resale property for 300,000 euros, you would normally expect to pay 21,000 euros in transfer tax.
That said, tax rules can change, and rates are set by the autonomous region. If you are looking beyond Andalusia, the percentage may differ. This is one reason why it is worth checking the latest position before you commit, particularly if you are comparing homes in different parts of Spain.
There is another point buyers sometimes miss. The tax office may look at a reference value for the property rather than relying only on the agreed purchase price. If the official value is higher than the amount on the contract, your tax could be based on that higher figure. It does not happen in every case, but it is a good example of why a clear cost breakdown from your lawyer matters.
What taxes do buyers pay in Spain on a new-build?
If you are buying a new-build property from a developer, the tax structure is different. Instead of ITP, buyers generally pay VAT, known in Spain as IVA, plus stamp duty, known as AJD.
VAT on most new residential property purchases is 10% of the purchase price. So if you buy a new-build flat for 300,000 euros, the VAT would usually be 30,000 euros.
On top of that, there is stamp duty. In Andalusia, AJD is currently 1.2% in standard residential transactions, although this can vary depending on the type of property and any regional measures in force at the time. Using the same 300,000 euro example, stamp duty would usually add 3,600 euros.
This means the total tax on a new-build can often be higher than on a resale property. That does not make new-builds a poor choice – far from it. Many buyers prefer them for modern layouts, energy efficiency, warranties and payment structures during construction. It simply means the upfront buying costs need to be budgeted properly.
The key difference between resale and new-build taxes
This is the simple version. On a resale purchase, buyers usually pay ITP. On a new-build purchase, buyers usually pay IVA and AJD. You do not generally pay all three on the same transaction.
That sounds straightforward, but there are grey areas. For example, some properties feel new because they have never been lived in, but if the legal status is not classed as a first transfer from the developer, the tax treatment may follow resale rules. That is another reason legal checks are not just paperwork – they directly affect what you pay.
Other property buying costs to budget for
When people ask what taxes do buyers pay in Spain, they often mean total buying costs. Taxes are the biggest item, but they are not the only cost.
You should also allow for legal fees, notary fees, land registry fees and, if you are using a mortgage, bank-related costs such as valuation fees. Exact figures vary, but many buyers use a rough guide of 10% to 14% on top of the purchase price to cover taxes and associated purchase costs. For a resale in Andalusia, the total often sits towards the lower end of that range. For a new-build, it is often higher because of VAT.
This is where careful planning helps. A buyer with a 350,000 euro budget may not actually have 350,000 euros available for the property price itself. If part of that budget needs to cover taxes and fees, the realistic purchase price may need to be lower.
Do non-residents pay different purchase taxes?
This is a common concern for British and international buyers, especially since many are purchasing a holiday home or future retirement property rather than moving to Spain immediately. The reassuring news is that the main purchase taxes are not usually higher just because you are a non-resident.
If you buy the same type of property in the same region at the same price, the purchase tax generally follows the property and the transaction type, not your nationality. In other words, a British buyer and a Spanish buyer purchasing similar homes in Andalusia would usually face the same ITP, IVA or AJD rules.
Where non-resident status becomes more relevant is after completion. You may have annual taxes to consider, such as non-resident income tax and local property taxes. Those are separate from the taxes paid when you buy, but they should still be part of your overall planning.
When are these taxes paid?
Purchase taxes in Spain are not something you sort out months later. They are usually dealt with shortly after completion, with your lawyer handling submission and payment within the legal deadline. In practice, the funds are typically collected and prepared as part of the completion process so there are no surprises.
For buyers, that means the money must be available when you complete. It is not enough to have your deposit and the balance of the purchase price. You also need the tax amount and the related purchase costs ready to go.
Can buyers reduce the tax they pay?
Sometimes there are reduced rates or special conditions, but buyers should be cautious about assuming they will qualify. Tax reliefs can apply in certain cases, such as specific age groups, disability status, social housing or family circumstances, but they are tightly defined and vary by region.
For most overseas buyers purchasing a second home, holiday property or investment property, the standard rates are the ones to work from. If a reduced rate may apply, your lawyer should confirm it in writing before you exchange or complete.
It is also worth being realistic about bargain hunting through under-declaring the price. That is not a route sensible buyers should go near. Spanish tax authorities are well aware of market values, and problems can follow if the declared price does not reflect reality.
Why the region matters
Spain does not apply one single property purchase tax rate across the whole country. The broad tax framework is national, but autonomous communities can set or adjust certain rates. That is why the same buyer might face different costs in Andalusia than in Valencia, Catalonia or the Balearics.
For buyers considering the Costa del Sol, that regional clarity is useful. Whether you are looking in Estepona, Manilva, Casares, Sabinillas or La Duquesa, the Andalusian tax rules are the starting point. Even so, rates can change over time, and individual transactions can have quirks, so current advice always matters more than old forum posts or a friend’s experience from five years ago.
A practical example
Let’s say you are choosing between two properties at 400,000 euros. One is a resale townhouse and the other is a new-build flat.
On the resale, using the current Andalusian ITP rate of 7%, the purchase tax would usually be 28,000 euros.
On the new-build, VAT at 10% would be 40,000 euros, and stamp duty at 1.2% would add 4,800 euros. That brings the tax total to 44,800 euros.
That does not automatically mean the resale is the better buy. The new-build may offer stronger rental appeal, lower maintenance, better energy performance or a staged payment plan during construction. But if you are comparing options purely on affordability, the tax difference is substantial.
For many buyers, the best approach is to work backwards from your all-in budget, not just the asking price. That keeps your search grounded in what is genuinely achievable and helps avoid last-minute compromises.
Buying in Spain should feel exciting, not murky. Once you understand which tax applies to which type of property, the process becomes much easier to manage. And if you are unsure, ask for the full cost picture before you reserve – it is one of the simplest ways to protect both your budget and your peace of mind.
