The Real Costs of Buying a Property on the Costa del Sol

Buying a home on the Costa del Sol is the dream of thousands of foreigners every year. However, beyond the listing price, there are a series of additional costs that can increase the final investment by 10% to 15%.

At Paramount Homes, we believe in complete transparency. That’s why we’ve prepared this detailed guide with all the expenses you need to consider before taking the plunge.

1. Taxes When Buying Property on the Costa del Sol

Taxes represent the largest additional cost, and they vary depending on the type of property:

Resale Property
ITP (Transfer Tax): in Andalusia, between 7% and 10% of the purchase price, depending on the value.
Example: for a €300,000 property, ITP would be around €21,000.

New Build Property
VAT (Value Added Tax): 10% of the purchase price.
AJD (Stamp Duty): between 1% and 1.5%. Example: for a new-build property worth €300,000, the tax burden would be €33,000 – €34,500.

2. Notary and Land Registry Fees

• Notary: usually between €600 and €1,000, depending on the length of the deed.
• Land Registry: between €400 and €800, depending on the property price.

3. Lawyer’s Fees

Hiring an independent lawyer is essential to protect your interests.

• Average: 1% – 1.5% of the purchase price.
• Includes: contract review, property checks, and assistance at the notary.

👉 At Paramount Homes, we integrate legal and tax advice, so you don’t have to hire multiple services separately and you would save the legal service fee.

4. Mortgage-Related Costs (if applicable)

If you require financing as a foreign buyer, you should consider:

• Administrative fees: €200 – €400.
• Official valuation: €300 – €600.
• Mortgage opening fee: up to 1% of the loan amount.

5. Recurring Costs After Purchase

Once you become a property owner, you’ll need to budget for annual running costs:

• Home insurance: €250 – €500/year depending on coverage.
• IBI (Property Tax): depends on the municipality, approx. €200 – €1,000/year.
• Waste collection fee: €100 – €200/year.
• Community fees: very variable (from €50/month in a simple apartment to €500/month in gated complexes with pools and security).

6. Practical Example

Purchase of a resale apartment in Estepona for €300,000:

• ITP (7%) → €21,000
• Notary → €800
• Land Registry → €600
• Lawyer (1%) → €3,000 Total additional costs: €25,400

The real cost of the investment would be €325,400.

7. How to Avoid Costly Surprises

1. Always request a detailed budget before signing.
2. Make sure the land registry extract (nota simple) is free of charges.
3. Work with an independent lawyer who only represents your interests.
4. Always budget 10–15% extra on top of the purchase price.

Frequently Asked Questions (FAQs)

Who pays the notary fees in Spain?
In a property transaction, the buyer pays the deed and registration fees. The seller covers the municipal capital gains tax (plusvalía).

Can foreigners deduct taxes in Spain?
It depends on your tax residency. Non-residents pay taxes in Spain, but double-taxation treaties may apply.

Are costs the same across Spain?
No, each region sets its own tax rates. In Andalusia, where the Costa del Sol is located, the conditions are particularly competitive.