Understanding the full scope of property ownership costs in Spain is essential for any international investor looking to build a profitable buy-to-let portfolio. From taxes to legal fees and ongoing maintenance, having a clear overview helps you forecast yields and avoid unexpected charges. This guide breaks down the most important costs foreign investors face when owning rental properties in Spain.
Table of Contents
- Property purchase costs in Spain
- Annual property taxes for non-residents
- Legal fees and notary expenses
- Community, insurance and maintenance costs
- Mortgage-related fees and interests
- Special considerations for rental properties
- FAQs about property costs in Spain
- Plan your investment with local expertise
Property purchase costs in Spain
When buying a property in Spain, investors should prepare for several one-off acquisition costs in addition to the sale price.
- Transfer Tax (ITP): Between 6%–10% depending on the region and property type.
- VAT (IVA): 10% applies to new-builds instead of ITP.
- Stamp Duty (AJD): Ranges from 0.5%–1.5% and applies to new properties or when registering mortgages.
- Notary Fees: Typically €600–€1,000 depending on property value and complexity.
- Land Registry Fees: Around €400–€800.
- Legal Fees: A lawyer specialising in property usually charges between 1%–1.5% of the purchase price.
Buy-to-Let Spain assists clients in reviewing contracts, conducting due diligence, and avoiding hidden costs during the acquisition phase.
Annual property taxes for non-residents
Non-Resident Income Tax (Modelo 210)
If you own a Spanish property but don’t rent it out, you’re still liable for a notional income tax.
- Rate: 24% for most non-EU residents, 19% for EU/EEA citizens.
- Base: Imputed rental value (typically 1.1% or 2% of cadastral value).
If you rent your property, tax is calculated on actual rental income, with allowable deductions only available to EU/EEA residents.
Property Tax (IBI)
- A local municipal tax based on cadastral value.
- Generally ranges from 0.4%–1.1% of the cadastral value.
- Paid annually to the local town hall.
Garbage Collection Tax (Basura)
A fixed annual fee charged by the municipality for waste services, typically €100–€300 per year.
Staying current on these taxes is crucial to avoid penalties or problems when selling the property later.
Legal fees and notary expenses
Hiring a lawyer is highly recommended for any foreign investor buying property in Spain. Legal fees cover:
- Drafting and reviewing contracts
- Verifying the title and checking for debts or encumbrances
- Assisting with NIE application and bank account setup
- Representation during signing (especially for non-resident investors)
- Coordinating tax and registry payments
Legal fees typically amount to around 1%–1.5% of the purchase value.
The notary is a public official who certifies the deed of sale. Although technically the buyer can choose the notary, both parties usually agree on a neutral option. Their fees are regulated and based on the price and complexity of the transaction.
Community, insurance and maintenance costs
If the property is within a residential complex or building with shared facilities, community fees will apply.
- Community fees: Cover maintenance of common areas, elevators, security, pools, etc. Range: €50–€250/month
- Home insurance: Highly recommended. Standard cover from €150–€300/year
- Repairs and maintenance: Variable, but budget at least 0.5% of property value annually
Mortgage-related fees and interests
Many international investors use financing to increase leverage. Mortgage-related costs include:
- Valuation fee: €300–€500 to determine the market value
- Mortgage arrangement fee: Can be 0.5%–1% of loan amount, depending on the lender
- Notary and registry fees for mortgage: €500–€1,000
- Interest costs: Typically 3%–4% for non-resident buyers, depending on profile and bank
Buy-to-Let Spain partners with independent brokers to help non-residents obtain competitive mortgage offers and assess ROI.
Special considerations for rental properties
Investors planning to rent out their property must account for extra costs:
- Tourist license (if short-term rental): Required in most regions; involves fees and compliance
- Rental platform fees: If using Airbnb or similar, expect 3%–15% of gross income
- Property manager costs: If not living in Spain, most investors hire a manager (10%–20% of rental income)
- Accountant or tax representative: Required for filing quarterly Modelo 210 forms; fees vary (€250–€800/year)
Understanding how these costs affect your rental yield is key to long-term success.
FAQs about property ownership costs in Spain
Are property taxes higher for non-residents?
Not necessarily. While some deductions aren’t available, tax rates are standardised and many regional tax benefits still apply.
Can I deduct mortgage interest from rental income?
Only if you are a tax resident in the EU/EEA. Non-EU investors typically cannot deduct expenses.
Is it mandatory to hire a lawyer?
It’s not required by law, but it’s strongly advised—especially if you’re not in Spain during the transaction.
Are property costs the same across all regions?
No. Taxes like ITP and AJD vary by autonomous community, and so do community fees, utilities and municipal taxes.
Make confident decisions with expert support
Accurately forecasting property ownership costs in Spain is essential for any investor aiming to maximise returns. At Buy-to-Let Spain, we help clients go beyond the listing price to understand the full picture: tax impact, legal obligations, and ongoing costs.
From due diligence and negotiations to ongoing tax filings and rental management, our team ensures your investment is protected and optimised from day one. If you want clarity, confidence and profitability, schedule your personalised strategy session today.