Property Buying Costs in Spain: Who Pays What?

🇪🇸 Read the original in Spanish

Buying a property in Spain is one of the most significant financial and personal milestones in anyone's life, but it is also a complex process that often generates uncertainty, especially regarding the final bill. Beyond the sale price agreed with the seller, acquiring a property entails a series of outlays for taxes, notary, registry, and management fees that can significantly increase the total cost of the transaction. In this guide prepared by the legal experts at AbogadoAI, we break down with technical precision and informative clarity who must pay each expense according to current Spanish legislation, the deadlines you must respect, and how to calculate the real budget to avoid last-minute financial surprises.

The Legal Framework: Who is Obliged to Pay Each Expense?

To understand the distribution of expenses in a property sale, we must primarily look to the Spanish Código Civil (Civil Code), which establishes the general substantive rules, without prejudice to private agreements that the parties (buyer and seller) may reach and the specific tax regulations of each Comunidad Autónoma (Autonomous Community/Region).

The essential reference article is *Article 1455 of the Código Civil***, which establishes a default distribution criterion if the parties do not agree otherwise:

• The expenses of executing the deeds (the original deed or matriz in the notary's office) will be borne by the seller.
• The expenses of the first copy of the deed and other costs subsequent to the sale (registration in the Registro de la Propiedad [Property Registry], taxes, etc.) will be borne by the buyer.

However, in the commercial and residential practice of our country, it is absolutely common and legal to agree that the buyer assumes all of the deed-related expenses (except for the municipal capital gains tax, for which the taxpayer by law is always the seller in the case of a transfer for valuable consideration).

It is essential to point out that, although the transaction takes place within the residential sector, the Ley 12/2023, de 24 de mayo, por el derecho a la vivienda (Housing Right Act) and the Ley 29/1994, de 24 de noviembre, de Arrendamientos Urbanos (LAU - Urban Leasing Act) mainly regulate rental contracts and public housing policy. Therefore, the weight of regulating pure property sales still falls on the Código Civil, mortgage legislation, and state and regional tax regulations.

Breakdown of Expenses and Taxes: Buyer vs. Seller

Below, we analyze in detail each of the economic concepts involved in the transaction and who is legally and contractually responsible for their payment.

1. Notary Fees

Notary fees (called aranceles [tariffs]) are regulated by the State through a Royal Decree, which means that all notaries in Spain charge exactly the same for the same service, although they can apply a maximum discount of 10%.

• Who pays? According to the Código Civil, the costs of the original deed correspond to the seller and the copies to the buyer. However, in 95% of property sales, it is agreed that the buyer assumes 100% of this cost.
• Estimated amount: It usually ranges between 600 € and 1,200 €, depending on the price of the property, the number of pages in the document, and whether or not there is an associated mortgage.

2. Property Registry Fees

Registering the deed of sale in the Registro de la Propiedad is a voluntary step but practically mandatory to enjoy legal security against third parties, and it is an indispensable requirement if a mortgage is requested.

• Who pays? It always corresponds to the buyer, as they are the party most interested in having the property officially registered in their name.
• Estimated amount: Like notaries, registrars charge according to tariffs approved by the Government. The cost usually ranges between 400 € and 800 €.

3. Gestoría Fees

The gestoría (administrative agency) is the private entity responsible for processing the payment of the corresponding taxes and presenting the documents to the Registro de la Propiedad for final registration.

• Who pays? The buyer, who is the one hiring their processing services. If there is a mortgage, the gestoría is usually imposed by the banking entity to ensure that the mortgage guarantee is correctly registered.
• Estimated amount: This is not regulated by law. It usually ranges from 250 € to 500 € per file.

4. The Tax Bill: Taxes on the Sale

Taxation is the most expensive part of the transaction and varies radically depending on whether it is a brand-new property or a second-hand one.

#### A) New Build Properties (First Deliveries)

• IVA (Impuesto sobre el Valor Añadido - Value Added Tax): The buyer must pay a general rate of 10% on the deeded sale price. In the case of social housing (VPO - Viviendas de Protección Oficial), this rate can be reduced to 4% depending on the Autonomous Community.
• AJD (Impuesto sobre Actos Jurídicos Documentados - Stamp Duty): This regional tax levies the signing of the notarial document. The tax rate varies depending on the Autonomous Community, generally ranging between 0,5% and 1,5% of the purchase price. It is paid entirely by the buyer.

#### B) Second-Hand Properties (Second and Subsequent Transfers)

• ITP (Impuesto sobre Transmisiones Patrimoniales - Property Transfer Tax): No IVA is paid. Instead, the buyer must pay ITP to the tax agency of their Autonomous Community. The general rate ranges between 6% and 10% of the Valor de Referencia de Catastro (Cadastral Reference Value), or the purchase value if it is higher. Reduced rates (between 3% and 5%) exist for vulnerable groups, young people, large families, or people with disabilities in most regions.

#### C) The Seller's Tax: The IIVTNU or "Plusvalía Municipal"

• This tax (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) levies the increase in value experienced by the land on which the property sits during the years the seller has owned it.
• Who pays? By law, the taxpayer (sujeto pasivo) is the seller. Any agreement forcing the buyer to pay the plusvalía municipal in a transaction between a professional and a consumer is considered an abusive clause and is null and void by law.

What if There is a Mortgage? The Distribution After the Real Estate Credit Agreements Act

If you need to request a mortgage loan to acquire the property, you should know that the rules of the game changed radically in favor of the consumer after the entry into force of the Ley 5/2019, de 15 de marzo, reguladora de los contratos de crédito inmobiliario (Real Estate Credit Agreements Act).

Currently, the distribution of mortgage setup expenses is configured as follows:

• Expenses assumed by the BANK:
• The Notary fees for the mortgage loan deed.
• The registration fees in the Registro de la Propiedad.
• The fees of the Gestoría responsible for processing the mortgage.
• The Stamp Duty (AJD) of the mortgage.
• Expenses assumed by the BUYER (Client):
• The property appraisal (tasación): This is mandatory to determine the guarantee value of the property. Its cost ranges between 300 € and 600 € and is valid for 6 months.
• Their own copy of the mortgage deed (if requested).
• The opening fee (comisión de apertura) of the loan (if the bank applies it contractually).

Practical Steps Step-by-Step

To ensure the transaction is carried out with full legal and financial guarantees, we recommend following this chronological itinerary:

1. Financial viability study and request for a nota simple: Before handing over any deposit, request a Nota Simple Informativa (land registry extract) from the Registro de la Propiedad to check who the real owner of the property is and if it is free of charges (previous mortgages, liens, or easements).
2. Signing of the arras contract: This is a private contract (contrato de arras) where the buyer and seller commit to carrying out the sale within a specified period, with the buyer delivering a deposit (usually 10% of the sale price). The distribution of notary expenses must be expressly agreed upon here.
3. Property appraisal: If you need a mortgage, hire an appraisal company approved by the Banco de España (Bank of Spain) to find out the official value of the property.
4. Provision of funds: A few days before signing at the notary, the gestoría will ask you to deposit an amount of money (provisión de fondos) into an escrow account to cover the taxes and fees of the sale. This amount is usually around 10% or 12% of the property price if it is second-hand.
5. Signing of the public deed before a Notary: The keys are handed over and the remaining price is paid via a certified bank check or OMF transfer. The Notary reads and authorizes the public deed of sale (and the mortgage deed, if applicable).
6. Tax settlement and registry filing: Within a maximum period of 30 business days from the signing, the gestoría will present the tax self-assessment (ITP or IVA/AJD) and register the property in your name at the Registro de la Propiedad.
7. Final settlement of the provision of funds: Months later, the gestoría will hand over the original deeds, the original invoices from the notary, registrar, and manager, and will refund any remaining money from the initial provisión de fondos.

Practical Examples with Real Figures

To clearly visualize the economic impact of these concepts, let us analyze two common sale scenarios in Spain.

Example 1: Javier buys a second-hand flat in Madrid for 200,000 € (without a mortgage)

Javier has saved enough to buy a second-hand flat in the Comunidad de Madrid directly, without needing to request a loan from the bank. The agreed price is 200,000 €.

• Sale price: 200,000 €
• Property Transfer Tax (ITP): In Madrid, the general rate is 6%. Therefore: 200,000 € x 6% = 12,000 €.
• Notary (estimated): 750 €.
• Property Registry (estimated): 450 €.
• Gestoría (estimated): 300 €.
• Total transaction cost for Javier: 200,000 € + 12,000 € + 750 € + 450 € + 300 € = 213,500 €.
• Note: The seller of the flat will have to pay the municipal plusvalía tax and the IRPF (personal income tax) for the capital gain obtained on their own account.

Example 2: Sofía buys a new build flat in Valencia for 250,000 € (with an 80% mortgage)

Sofía acquires a brand-new flat from a developer in the Comunidad Valenciana for 250,000 €. To do this, she requests a mortgage of 200,000 € (80% of the purchase value).

• Sale price: 250,000 €
• IVA (10%): 250,000 € x 10% = 25,000 €.
• AJD on the sale (1.5% in C. Valenciana): 250,000 € x 1.5% = 3,750 €.
• Notary for the sale (estimated): 850 €.
• Property Registry for the sale (estimated): 500 €.
• Gestoría for the sale (estimated): 350 €.
• Property appraisal (assumed by Sofía): 400 €.
• The expenses of the mortgage deed (mortgage notary, mortgage registry, mortgage gestoría, and mortgage AJD tax) are paid entirely by her bank.
• Total transaction cost for Sofía: 250,000 € + 25,000 € + 3,750 € + 850 € + 500 € + 350 € + 400 € = 280,850 €.
• Sofía will need to contribute 80,850 € from her own savings (the 50,000 € not financed by the bank plus the 30,850 € of associated expenses).

Mistakes You Must Avoid

• Not calculating the expense cushion beforehand: The most common mistake is only having the money equivalent to the property deposit (usually the 20% that banks do not finance). You must always have an additional cushion of between 10% and 12% of the property value to cover the taxes and fees described.
• Ignoring the Cadastral Reference Value: Since January 1, 2022, the taxable base for ITP is not the price you pay for the property, but the Valor de Referencia determined by the Dirección General del Catastro (General Directorate of the Cadastre). If you buy a flat for 150,000 € but its cadastral Reference Value is 180,000 €, the tax authority will demand tax payment based on 180,000 €. Always check this before signing the arras.
• Agreeing by contract that the buyer pays the Plusvalía Municipal: If you buy from a developer or a real estate company, any clause forcing you to pay the plusvalía municipal or the cancellation costs of the seller's previous mortgage is illegal. Do not sign contracts with these abusive clauses without first reviewing them with a legal expert.
• Not requesting the refund of the provision of funds: After the property is registered, the gestoría must hand over the detailed original invoices and the remaining balance of the provisión de fondos. Demand this breakdown; sometimes months pass and gestorías forget to settle the remaining balances in favor of the buyer.

Frequently Asked Questions (FAQ)

Who pays the Property Tax (IBI) in the year of the sale?

According to the jurisprudence of the Tribunal Supremo (Supreme Court), the IBI (Impuesto sobre Bienes Inmuebles) must be split between buyer and seller in proportion to the time each has owned the property during the calendar year (unless otherwise agreed). The taxpayer listed on January 1 at the Town Hall is the seller, who receives the full bill, but they have the right to pass on the proportional part for the remaining months of the year to the buyer.

What happens if the seller has an outstanding mortgage on the property I am going to buy?

The expenses for the financial and registry cancellation of the seller's previous mortgage (cancellation fees, notary, registry, and gestoría to release the charge) correspond exclusively to the seller. The property must be transferred to the buyer completely "free of charges".

Do I have the right to choose the notary before whom to sign the deed?

Yes, as a buyer you have the constitutional and legal right to freely choose the notary before whom the public deed of sale will be authorized, especially if you are the one assuming most of the processing costs or if you are taking out bank financing.

Are there tax deductions for young people buying their first home?

Yes, the vast majority of Autonomous Communities offer reduced ITP rates (which can drop from the general 8-10% rate down to 3% or 5%) for young people under 30, 32, or 35 years old (depending on the region) who acquire their primary residence, provided they do not exceed certain annual income limits.

In Summary

• The buyer must reserve between 10% and 12% of the property price to cover the expenses and taxes associated with the sale.
• The main taxes are IVA (10%) and AJD for new properties, or ITP (6% to 10%) for second-hand properties.
• The seller has the legal obligation to pay the Plusvalía Municipal tax and the cancellation costs of their previous mortgage.
• If you request a mortgage, the bank is obliged by law to assume the notary, registry, gestoría, and tax (AJD) costs of the loan; you will only pay for the appraisal.
• It is essential to check the Valor de Referencia de Catastro of the property before signing to avoid complementary tax assessments from the tax authority.

General legal information, not personalised legal advice. For your specific situation, ask your question for free at AbogadoAI — answers grounded in Spanish law (BOE), in English.

This is general information, not legal advice. Verify on the BOE or consult a lawyer for your specific case.