Key takeaway: The purchase price is only part of the total investment. Buying costs in Spain typically add 9–13% on top, depending on whether you purchase a resale or new-build property.
Buying property on the Costa del Sol involves more than agreeing on a purchase price. Taxes, legal fees, notary costs, and ongoing ownership expenses all need to be factored into your budget from the beginning. Understanding the real cost upfront helps you avoid surprises and negotiate with confidence.
What are the buying costs for a resale property in Spain?
For resale properties in Andalucía, the largest cost is the Property Transfer Tax (ITP), currently set at 7%.
Additional costs include:
- Notary and Land Registry fees
- Legal representation
- Mortgage setup costs (if financing)
- Administrative expenses
In total, resale purchase costs are typically around 8.5%–9% plus approximately 3.000 € in fixed notary and registry fees.
Typical resale acquisition costs
| Cost Item | Estimated Cost |
|---|---|
| Transfer Tax (ITP) | 7% |
| Notary & Registry | ~3.000 € |
| Legal fees (standard) | 1.21% |
| Legal fees (Mojo Merit) | 1.089% |
| Mortgage costs | ~0.5% |
| Total estimated | ~8.6%–8.7% + 3.000 € |
What are the buying costs for a new-build property?
New-build purchases follow a different tax structure. Instead of ITP, buyers pay:
- 10% IVA (VAT)
- 1.2% AJD (Stamp Duty)
This means total acquisition costs are generally higher than resale properties.
Typical new-build acquisition costs
| Cost Item | Estimated Cost |
|---|---|
| IVA (VAT) | 10% |
| AJD (Stamp Duty) | 1.2% |
| Notary & Registry | ~3.000 € |
| Legal fees (standard) | 1.21% |
| Legal fees (Mojo Merit) | 1.089% |
| Mortgage costs | ~0.5% |
| Total estimated | ~12.8%–12.9% + 3.000 € |
What annual ownership costs should you expect?
Owning property on the Costa del Sol also comes with ongoing yearly expenses. These vary depending on the size of the property, urbanisation facilities, and usage.
Typical annual ownership costs
| Cost | Typical Range |
|---|---|
| IBI (Council Tax) | 500 €–1.500 € / year |
| Community Fees | 1.200 €–6.000 € / year |
| Home Insurance | 300 €–700 € / year |
| Utilities | 1.800 €–4.200 € / year |
Total annual ownership costs typically range between 3.800 € and 12.400 € per year.
What taxes do foreign owners pay in Spain?
Non-resident property owners in Spain are subject to annual tax obligations, even if the property is not rented out.
Main taxes include:
- Modelo 210 (Non-resident income tax)
- Rental income tax (if applicable)
- Plusvalía tax upon sale
EU/EEA residents are generally taxed at 19%, while non-EU residents are taxed at 24%.
If the property generates rental income, certain expenses may be deductible for EU/EEA residents.
Can you generate rental income from your property?
Yes — holiday rentals remain one of the strongest investment drivers on the Costa del Sol.
Prime locations can achieve gross rental yields of approximately 5–10%, depending on:
- location
- property type
- seasonality
- management quality
However, regulations have tightened in recent years.
Important rental rules in Andalucía
- Properties rented short term must hold a valid VFT licence
- Since April 2025, many apartment communities require a three-fifths owner approval
- Since July 2025, all short-term rental listings must display an official registration number
Understanding rental regulations before purchasing is essential, particularly for investment-focused buyers.