Who Pays the Costs of Buying and Selling a Home in Spain? A Guide for Buyers and Sellers

When purchasing a property it is important to remember that the agreed purchase price is not the only expense involved. Taxes, administrative fees, and other transaction-related costs can increase the total cost of the purchase by approximately 10% to 12%, depending on whether the property is new or resale and on the autonomous community in which the transaction takes place.

Understanding in advance which expenses are the buyer’s responsibility and which fall to the seller can help avoid unexpected costs and allow for better financial planning.

COSTS THE BUYER MUST PAY

As a general rule, the buyer is responsible for the expenses related to acquiring the property and registering it in their name. If the purchase is financed with a mortgage, additional costs may also apply.

Taxes

The applicable taxes depend on the type of property:

. Resale property: the buyer pays the Property Transfer Tax (ITP – Impuesto de Transmisiones Patrimoniales), with rates varying by autonomous community

. New-build property: the buyer pays VAT (IVA) as well as Stamp Duty (AJD – Actos Jurídicos Documentados) where applicable.

Public deed of sale

Notary fees associated with executing the deed of sale are generally paid by the buyer unless both parties agree otherwise.

Land Registry fees

Registering the property with the Land Registry is essential to officially establish ownership and provide legal security for the transaction.

Property valuation

If the purchase is financed through a mortgage, the lender will normally require an official valuation to determine the property's market value.

Administrative or conveyancing fees

When a mortgage is involved, an administrative agency or conveyancing service may be required to coordinate and process the necessary documentation.

Advance provision of funds

Buyers are often asked to provide an advance payment to cover the estimated costs of the transaction. Any remaining balance is adjusted once all procedures have been completed.

COSTS THE SELLER MUST PAY

The seller is also responsible for certain expenses arising from the transfer of ownership and their tax obligations.

Municipal Capital Gains Tax

The Tax on the Increase in Urban Land Value (IIVTNU), commonly known as the municipal capital gains tax, is a local tax levied on the increase in the value of the land between the date of purchase and the date of sale.

Mortgage cancellation

If the property is still subject to a mortgage that must be cancelled before completion, the seller is generally responsible for the associated cancellation costs, including notary, Land Registry, and, where applicable, administrative fees.

Energy Performance Certificate

An Energy Performance Certificate is legally required in order to market and sell a property in Spain. Obtaining this certificate and covering its cost is the seller’s responsibility.

Real estate agency fees

When the sale is handled through an estate agency, the commission is typically paid by the seller unless a different arrangement has been agreed between the parties.

Personal Income Tax on capital gains

If the sale generates a capital gain, the seller must declare it in their annual income tax return and pay the corresponding tax, unless they qualify for a legal exemption under Spanish tax regulations.

In Summary

Before buying or selling a property, it is advisable to calculate all the costs associated with the transaction to avoid unexpected expenses. While buyers are mainly responsible for the costs of acquiring and registering the property, sellers generally bear the taxes and administrative expenses related to transferring ownership.Receiving professional advice throughout the process can help ensure a smoother transaction and provide greater confidence and peace of mind for both buyers and sellers.