The Example's Assumption: A €300,000 Resale Apartment
As explained on the page on buying property in Madrid, a foreign buyer needs an NIE number for any property transaction. In this example, an Iranian buyer, whether resident or non-resident in Spain, purchases a resale (not newly built) apartment for €300,000 in Madrid. Because the property is resale, the transfer tax (ITP) applies instead of VAT (IVA).
| Cost | Rate or Approximate Amount | Amount for This Example |
|---|---|---|
| Property purchase price | — | €300,000 |
| Transfer tax on a resale property (ITP in Madrid) | 6% of the property price | €18,000 |
| Notary fee (Notario) | Official tiered scale, approximately 0.4% of the property price | Approx. €1,200 |
| Land registry fee (Registro de la Propiedad) | Official tiered scale, approximately 0.25% to 0.3% of the property price | Approx. €800 |
| Gestoría fee (handling administrative procedures) | Approximate flat amount | Approx. €400 |
| Lawyer and legal advisor fee | Approximately 1% of the property price | Approx. €3,000 |
| Total extra costs | Approximately 7.8% of the property price | Approx. €23,400 |
| Total cost of the purchase (property price + extra costs) | — | Approx. €323,400 |
The notary and land registry fees are calculated on an official tiered scale, and the percentage they represent usually decreases as the property price rises. The lawyer's fee also varies depending on the case's complexity and the law firm chosen. Before signing the deposit contract, request a precise estimate from your advisor.
The Difference with a Newly Built Property
If this same €300,000 apartment were newly built (bought directly from the developer) instead of resale, VAT (IVA) of 10% would apply instead of the 6% transfer tax — that is, €30,000 instead of €18,000 — in addition to the stamp duty on legal documents (AJD), which also applies to this type of transaction in some cases. For this reason, the overall cost of buying a newly built property is usually closer to the upper end of the 10 to 13 percent range.
Annual Costs after Purchase
In addition to the one-off purchase costs, non-resident owners in Spain must pay annual non-resident income tax (IRNR) based on the property's cadastral value; this cost is not included in the calculation above and should be budgeted for separately every year.
When planning your finances, it is advisable to set aside at least 8 to 9 percent of the property price for extra costs, rather than this example's exact 7.8%, to cover fluctuations in fees or unforeseen expenses.
Frequently Asked Questions
Are these costs the same for every type of property?
No. This calculation is for a resale property. For a newly built property, VAT (IVA) of 10% applies instead of ITP, which increases the overall cost.
Can any of these costs be avoided?
The transfer tax and the notary and land registry fees are mandatory. The lawyer's and gestoría's fees are not legally required, but skipping them increases the legal risk of the transaction.
Do these amounts differ in other Spanish cities?
Yes. The transfer tax rate is set separately by each autonomous region and can range from 6% in Madrid to over 10% in some other regions.