Taxes, Fees & Lawyer Costs: What You Need to Know Before You Transfer Funds
By George Nayda
18 March 2025
10 min read
AVOID MISTAKES
Taxes, Fees & Lawyer Costs: What You Need to Know Before You Transfer Funds
Before you transfer a single euro, read this. Here’s the full cost breakdown of taxes, legal fees, and notary charges written for international buyers.
The Real Cost of Buying Property in Spain And Why It’s Not Just the Purchase Price
Here’s a scenario I see too often:
A buyer finds their dream home for €1.1M. They wire €1.1M.
Then come the surprises: tax bills, legal invoices, registration fees and suddenly they’re €120,000 short.
In Spain, the property price is only part of the picture. The true number you need to transfer the number that gets you from “I want this” to “It’s mine” includes a stack of hidden costs that don’t show up in glossy listings.
This guide breaks down the full legal + tax picture so you:
Avoid underbudgeting
Prevent legal delays
Know when to wire funds and how much
Understand where every euro goes
If you’re planning to buy in Spain with a €1M+ budget, this isn’t about “nickel and diming.” This is about clarity and buying with confidence.
Transfer Tax or VAT Which One Applies to You?
This is the biggest tax line on your invoice and the one most misunderstood.
There are two types of purchases in Spain:
1. 🔁 Resale property → You’ll pay Transfer Tax (ITP)
2. 🏗️ New build property (direct from developer) → You’ll pay VAT + stamp duty (IVA + AJD)
Let’s break it down:
✅ If You’re Buying Resale (most common for villas, apartments, townhouses):
Tax: ITP (Impuesto de Transmisiones Patrimoniales)
Rate in Andalusia (2025): 7% flat
Example: Buying at €1.2M = €84,000 tax
✅ If You’re Buying a New Build (from a developer):
Tax: VAT (IVA) at 10% + Stamp Duty (AJD) at 1.2%
Total: 11.2%
Example: Buying at €1.2M = €134,400 tax
So, for new builds, taxes are notably higher, but many buyers are okay with this due to warranties, new systems, and modern layouts.
📌 Important: You’ll usually need to pay taxes on completion day at the notary, not a month later. So your total transfer should include this.
Notary, Registry & Admin Fees The "Small But Necessary" Charges
These are official costs you pay to the state and local government required to legalise your purchase.
📑 Notary Fee
Purpose: Finalises the public deed of sale (Escritura Pública)
Range: €600 to €1,500 depending on property value and pages
📋 Land Registry Fee
Purpose: Registers your ownership with the official property registry
Range: €400 to €1,000 depending on property price
🧾 Gestoría (Admin Manager)
Optional but recommended, especially for non-resident buyers
They handle tax filing, registration, and paperwork logistics
Typical Fee: €300 to €700
📌 Estimate €1,500 to €3,000 for this full category
Legal Fees What Your Lawyer Actually Charges (and What They Do)
In Spain, legal representation is not optional it’s essential. And your lawyer doesn’t just review documents they protect your entire investment.
Here’s what they handle:
Due diligence (debts, licenses, land registry)
Power of Attorney setup if needed
Contract negotiation
NIE number application (if not already done)
Coordination with bank, seller, notary, and land registry
Tax setup for ITP or IVA
Escrow management for deposit and final balance
💼 Standard Lawyer Fee: 1% of purchase price + VAT
Example on €1.2M = €12,000 + 21% VAT = €14,520
Some high-end law firms may offer tiered fees or caps
🧠 Pro tip: Choose a lawyer who specialises in international buyers and speaks your language fluently. The cost is worth the clarity.
Bank Costs, FX & Transfer Fees The Silent Margin Eaters
This is where many international buyers leak 4 to 5 figures without noticing.
🔁 Currency Exchange Margin
If you’re converting from USD, GBP, AED, ZAR, etc.
Banks often charge 2 - 4% hidden margins on transfers
On €1.2M, that’s €24K - €48K lost - just on the rate
✅ Use a specialist FX provider to lock rates and avoid spikes
🏦 Bank Setup Fees
Spanish banks may charge setup or monthly maintenance
Not high, but you’ll need the account to pay bills, taxes, etc.
💸 Mortgage Setup Costs (if applicable)
Valuation fee: €400 - €1,000
Arrangement fee: 0.5 - 1% of loan
Notary fees for mortgage deed
Stamp duty on loan deed (AJD): 1.2%
📌 Even if paying cash, plan for €1,000 to €3,000 in bank + FX logistics
Total Cost Summary + What You Should Wire (And When)
Here’s a realistic full-stack breakdown for a €1.2M purchase:
Cost Category Amount (Approx.)
Transfer Tax (ITP) €84,000
Notary + Registry €2,000
Legal Fees + VAT €14,520
Bank/FX Costs €3,000
Misc. + Buffer €3,000
Total Buying Costs approx €106,500 (≈ 8.9%)
🎯 What You Should Do Now:
✅ Add a 9 to 11% buffer to your property budget before wiring funds
✅ Coordinate with the lawyer early - ask them to calculate the exact tax
✅ Wire funds to your Spanish bank with this buffer in mind
✅ Use a currency exchange provider to avoid hidden rate loss
✅ Ask your agent (yes, that’s me) to coordinate timing with the seller
📬 Final Word: You’re Not Being “Careful” You’re Being Smart
This isn’t about being paranoid. It’s about removing friction before it happens.
Most €1M+ buyers don’t regret their home. They regret the surprises.
With the right team and planning, there are no surprises. Just one clean signature, one confident transfer… and one great decision.
→ Message George “Here’s my budget, what should I expect in total costs?”
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