Understanding Property Taxes Costa Blanca is essential before buying a home in Spain. If you’re purchasing a resale property, you’ll normally pay 10% Property Transfer Tax (ITP) in the Valencian Community, with 11% applying to the portion of the purchase price above €1 million. If you’re buying a new-build property, you’ll typically pay 10% VAT (IVA) plus 1.5% Stamp Duty (AJD). In addition to taxes, buyers should budget for legal fees, notary fees, Land Registry fees and any mortgage-related costs. As a general rule, allowing 12–14% above the purchase price will comfortably cover the majority of buying expenses.
Property Buying Costs at a Glance
| Cost | Resale Property | New-Build Property |
|---|---|---|
| Property Tax | 10% ITP* | 10% VAT (IVA) |
| Stamp Duty | Not applicable | 1.5% AJD |
| Legal Fees | Approximately 1–1.5% | Approximately 1–1.5% |
| Notary Fees | €600–€1,200 | €600–€1,200 |
| Land Registry | €400–€800 | €400–€800 |
| Recommended Buying Budget | 12–13% | 13–14% |
*For properties in the Valencian Community, the standard ITP rate is 10%, with 11% applying to the portion of the purchase price above €1 million.
Why Understanding Property Taxes on the Costa Blanca Matters
Buying a property on the Costa Blanca is one of life’s most exciting investments. Whether you’re searching for a holiday apartment overlooking the Mediterranean, a villa for retirement, or an investment property with rental potential, understanding the true cost of buying is just as important as finding the right home.
Many overseas buyers focus solely on the purchase price and are surprised to discover there are additional taxes and professional fees to pay before they receive the keys.
The good news is that Spain’s property buying process is transparent, and once you understand the costs involved, it’s straightforward to budget accurately.
At Costa Blanca Sales, we believe buyers should know exactly what to expect before making an offer, allowing you to purchase with complete confidence.
Property Transfer Tax (ITP) – Buying a Resale Property
If you’re buying a property that has previously been owned, you’ll usually pay Property Transfer Tax, known in Spain as Impuesto de Transmisiones Patrimoniales (ITP).
Within the Valencian Community, which includes the Costa Blanca, the current rates are:
- 10% of the purchase price for properties up to €1 million
- 11% on the portion of the purchase price above €1 million
The tax is paid by the buyer after signing the Title Deed (Escritura) before the notary and must be settled within the required legal timeframe.
For most buyers purchasing resale apartments, townhouses or villas, ITP represents the largest additional expense after the purchase price itself.
VAT (IVA) & Stamp Duty (AJD) – Buying a New-Build Property
If you’re purchasing a brand-new property directly from a developer, Property Transfer Tax does not apply.
Instead, buyers pay:
- 10% VAT (IVA)
- 1.5% Stamp Duty (AJD) in the Valencian Community
These taxes are payable by the buyer when the purchase is completed before the notary.
Although buying a new-build property involves a different tax structure, the overall buying costs remain broadly comparable to purchasing a resale home once all associated fees are included.
Notary Fees
Every property purchase in Spain must be completed before a Spanish Notary Public.
The notary acts as an independent public official who verifies the identities of everyone involved, confirms the legality of the transaction and witnesses the signing of the Title Deed.
The Consejo General Del Notariado can give you further information on the Notary and what they do.
Typical notary fees range from:
€600–€1,200
The exact amount depends on the property’s purchase price and the complexity of the transaction.
Land Registry Fees
Following completion, your ownership must be officially registered with the Spanish Land Registry (Registro de la Propiedad).
Registration provides legal protection by recording you as the property’s official owner.
Typical Land Registry fees range between:
€400–€800
Again, the final amount depends largely on the property’s value.
Legal Fees
Although Spanish law doesn’t require you to appoint an independent lawyer, doing so is one of the smartest decisions you can make.
An experienced property lawyer will:
- Carry out all legal due diligence
- Confirm legal ownership
- Check for outstanding debts or charges
- Verify planning permissions where applicable
- Review contracts before signing
- Arrange payment of taxes
- Register your ownership after completion
For overseas buyers, choosing a solicitor who speaks your language can make the process significantly easier and ensures every document is fully explained before you sign.
Legal fees are typically:
1–1.5% of the purchase price (plus VAT where applicable).
Mortgage Costs
If you’re purchasing with a Spanish mortgage, there may be additional costs depending on your lender.
These can include:
- Property valuation fees
- Mortgage administration fees
- Bank arrangement charges (where applicable)
- Mortgage documentation costs
Every lender has slightly different pricing, so it’s always worth requesting a complete breakdown before applying.
Ongoing Property Costs After You Buy
Buying costs are only part of the overall financial picture.
Once you’ve completed your purchase, you’ll also need to budget for ongoing ownership costs.
These may include:
- Annual IBI (local property tax)
- Basura (rubbish collection tax)
- Community fees (if applicable)
- Electricity
- Water
- Internet
- Home insurance
- Non-resident income tax (where applicable)
- Wealth tax (where applicable)
The exact annual costs vary depending on the property’s size, location and whether it’s part of a community or resort development.
Before completing your purchase, it’s always advisable to ask for details of the property’s current annual running costs.
Example Buying Costs
One of the easiest ways to understand Property Taxes Costa Blanca is by looking at real examples.
Example 1 – Buying a €250,000 Resale Property
| Item | Estimated Cost |
|---|---|
| Purchase Price | €250,000 |
| Property Transfer Tax (10%) | €25,000 |
| Legal Fees (Approx.) | €2,750 |
| Notary Fees | €900 |
| Land Registry | €600 |
| Estimated Total Purchase Cost | €279,250 |
Example 2 – Buying a €350,000 New-Build Property
| Item | Estimated Cost |
|---|---|
| Purchase Price | €350,000 |
| VAT (10%) | €35,000 |
| Stamp Duty (1.5%) | €5,250 |
| Legal Fees (Approx.) | €3,850 |
| Notary & Registry | €1,600 |
| Estimated Total Purchase Cost | €395,700 |
These examples are for illustration only. Actual costs vary depending on the property, financing arrangements and professional fees.
Common Mistakes Buyers Make
After helping hundreds of international buyers purchase property on the Costa Blanca, we’ve found that the same mistakes appear time and again.
Avoid these common pitfalls:
- Assuming the asking price includes taxes.
- Forgetting to budget for legal and registration fees.
- Confusing VAT with Property Transfer Tax.
- Not using an independent property lawyer.
- Overlooking annual ownership costs such as IBI and community fees.
- Failing to budget for mortgage-related expenses.
- Not requesting a full breakdown of buying costs before making an offer.
Planning ahead makes the buying process considerably smoother.
How Much Should You Budget?
One of the most common questions buyers ask is:
“How much extra should I allow when buying property on the Costa Blanca?”
As a practical guide:
Resale Property
Budget approximately 12–13% above the agreed purchase price.
New-Build Property
Budget approximately 13–14% above the agreed purchase price.
This should comfortably cover:
- Property taxes
- Legal fees
- Notary fees
- Land Registry fees
- Administrative costs
Having this additional budget available means you’ll be fully prepared when it’s time to complete your purchase.
Why Buy Through Costa Blanca Sales?
Buying property overseas should be exciting, not stressful.
At Costa Blanca Sales, we help buyers navigate every stage of the purchase process, from finding the right property to understanding taxes, legal requirements and ongoing ownership costs.
We work alongside trusted independent lawyers, mortgage specialists and experienced professionals to ensure your purchase is handled efficiently, transparently and with complete peace of mind.
Whether you’re buying your first holiday home, relocating permanently or investing in Spanish property, we’re here to help you make informed decisions from your first enquiry through to collecting the keys. If you are ready to move forward you can see our full range of properties for sale, and we can start your journey.
If you’d like further information on how to buy on the Costa Blanca you can check out our handy buying guide.
Final Thoughts
Understanding Property Taxes Costa Blanca is an essential part of buying property in Spain. While the buying process involves several taxes and professional fees, knowing what to expect allows you to budget accurately and move forward with confidence.
By working with experienced local professionals, getting the best expert tips for buying on the Costa Blanca, and allowing for the full cost of purchasing, not just the asking price, you’ll avoid unexpected surprises and enjoy a smoother buying experience from start to finish.
If you’re considering buying property on the Costa Blanca, the team at Costa Blanca Sales is here to guide you every step of the way.
Frequently Asked Questions About Property Taxes Costa Blanca
How much are property taxes when buying on the Costa Blanca?
For resale properties, buyers generally pay 10% Property Transfer Tax (ITP) in the Valencian Community, with 11% applying to the portion of the purchase price above €1 million. New-build properties are normally subject to 10% VAT (IVA) plus 1.5% Stamp Duty (AJD).
Do I pay VAT when buying a resale property?
No. VAT is only payable when purchasing a new-build property directly from a developer. Resale properties are normally subject to Property Transfer Tax instead.
How much should I budget for buying costs in Spain?
As a general guide, buyers should allow an additional 12–14% above the agreed purchase price to cover taxes, legal fees, notary fees, Land Registry charges and associated buying costs.
Is it compulsory to use a lawyer when buying property in Spain?
No, but it is highly recommended. An independent property lawyer protects your interests, carries out legal checks and ensures the transaction is completed correctly.
What ongoing costs will I pay after buying a property?
Depending on the property, you may pay annual IBI (local property tax), community fees, rubbish collection charges, utilities, home insurance and, where applicable, non-resident income tax or wealth tax.
Can Costa Blanca Sales help me understand the buying costs?
Yes. We guide buyers through the complete purchasing process, explain every cost involved and work with trusted independent legal professionals to help make buying property on the Costa Blanca straightforward, transparent and stress-free.
