The Cost of Buying Property on the Costa Del Sol is more than the advertised price of the home. For a resale property in Andalusia, the general Transfer Tax (ITP) rate is currently 7%. For a qualifying new residential property bought from a developer, buyers will generally pay 10% VAT (IVA) plus 1.2% Stamp Duty (AJD). Other purchase expenses can include legal fees, notary and Land Registry costs, valuation fees where a mortgage is involved, and additional professional services.
The exact total varies according to the property and buyer, so it is important to calculate your complete purchase budget before starting your search.
Understanding the True Cost of Buying Property on the Costa Del Sol
Finding a Costa del Sol property at the right price is exciting, but the asking price is only one part of the financial picture.
Buyers also need to budget for taxes and the professional and administrative costs involved in completing a purchase. The biggest difference usually comes down to whether you are buying a resale property or a new build, as the tax treatment is different.
This is particularly important for international buyers who may be used to a completely different system at home.
At Sunny Coast Homes, we encourage buyers to establish their total available budget from the beginning. If you have €500,000 available in total, for example, it does not necessarily mean you should be viewing properties with a €500,000 asking price.
Knowing what needs to sit on top of the purchase price gives you a much clearer and more comfortable starting point.
For an overview of the entire purchase process, see our Costa Del Sol Property Buying Guide
Resale vs New Build: What Taxes Will You Pay?
This is the first distinction buyers need to understand.
As of 2026, the general tax position in Andalusia looks like this:
| Property Type | Main Purchase Tax | General Rate |
|---|---|---|
| Resale property | Transfer Tax (ITP) | 7% |
| New residential property | VAT (IVA) | 10% |
| New residential property | Stamp Duty (AJD) | 1.2% |
For a standard resale property, the general ITP rate in Andalusia is currently 7%.
A qualifying new residential property purchased from a developer is instead generally subject to VAT at 10%. Where the new-property purchase is subject to VAT rather than ITP, the purchase deed is also generally subject to AJD, for which the general Andalusian rate is currently 1.2%.
There are reduced rates in certain circumstances, so these figures should be treated as the general position rather than a personalised tax calculation.
This distinction between new build and resale can make a noticeable difference to the amount you need available for completion.
How Much Is Transfer Tax on a Resale Property?
For most buyers purchasing a standard resale home on the Costa del Sol, Transfer Tax — known as ITP — is the largest additional purchase cost.
The general rate in Andalusia is currently 7%.
For a simple illustration:
| Resale Purchase Price | 7% ITP |
|---|---|
| €250,000 | €17,500 |
| €400,000 | €28,000 |
| €500,000 | €35,000 |
| €750,000 | €52,500 |
| €1,000,000 | €70,000 |
These examples are deliberately straightforward and assume the general 7% rate is applicable.
Andalusia also provides reduced rates for qualifying purchases. For example, a 6% rate can apply to a qualifying habitual residence where the value does not exceed €150,000, with other reduced rates available in specific circumstances.
For many international Costa del Sol buyers purchasing a second home or holiday property, however, it is sensible to begin calculations using the general rate and then obtain advice on the tax position for the specific transaction.
Local Insight from Sunny Coast Homes
One of the easiest mistakes to make is setting your property-search ceiling at the same level as your total available funds.
A buyer with €500,000 available may naturally begin searching for homes up to €500,000. Once purchase tax and other costs are added, however, that property could take them beyond the amount they actually intended to spend.
We would rather establish that distinction at the beginning. It makes the search more focused and means buyers can view properties knowing the numbers make sense.
What Does It Cost to Buy a New Build?
New-build property follows a different tax structure.
For qualifying residential property purchased new from a developer, VAT is generally charged at 10%. In Andalusia, the general AJD rate is currently 1.2%.
That means a €500,000 new-build home could involve:
- €50,000 in VAT at 10%
- €6,000 in AJD at 1.2%
That is €56,000 in these two taxes alone, before considering other transaction costs.
This is one reason buyers shouldn’t compare a €500,000 resale property and a €500,000 new build purely on asking price. The total amount required to purchase them can be different.
Of course, new developments bring their own attractions: contemporary specifications, energy efficiency, modern communal facilities and, in many cases, less immediate maintenance.
The decision should therefore be based on overall value and suitability rather than tax alone.
f you’re weighing up the two options, see our New Build vs Re-Sale Property on the Costa Del Sol guide.
What Other Buying Costs Should You Allow For?
Taxes are the biggest headline figure, but they aren’t the only expense involved in the Cost of Buying Property on the Costa Del Sol.
Depending on the transaction, your budget may also need to cover:
- independent legal representation
- notary-related costs
- Land Registry fees
- property valuation costs where applicable
- mortgage-related costs that fall to the buyer
- banking or currency-transfer costs for some international buyers
- surveys or other specialist inspections where required
Not every buyer will incur exactly the same costs.
This is why we prefer not to give buyers a supposedly universal percentage and tell them that it will cover every transaction. A straightforward cash purchase of a resale apartment and a financed purchase of a new villa are not identical.
The better approach is to ask your lawyer, lender and other relevant professionals for a transaction-specific breakdown before committing.
Do You Need to Pay Legal, Notary and Land Registry Fees?
These are separate from the property tax itself and should be included when working out your overall purchase budget.
Legal fees
Many international buyers appoint an independent Spanish lawyer to carry out legal due diligence and guide them through the transaction.
The lawyer can check matters including ownership, charges and relevant documentation and advise on the legal implications of the purchase.
Fees vary according to the lawyer and complexity of the transaction, so obtain a clear quotation rather than assuming a fixed percentage applies universally.
We always recommend using a lawyer when you purchase in Spain, and you are more than welcome to choose your own solicitor or we can refer you to our established partnerships with either Manzana Lawyers or Advisur Asesores.
Notary and Land Registry
The notary plays an important role in the formal completion process, while the Land Registry records the buyer’s ownership.
Applicable costs are regulated through fee structures and can depend on the transaction.
The important point for buyers is simple: leave room for them in your budget rather than treating purchase tax as your only additional cost.
Does Getting a Mortgage Add to the Cost?
It can.
If you are financing your Costa del Sol property with a Spanish mortgage, there may be additional costs associated with arranging the finance.
Spanish mortgage legislation determines which mortgage costs are paid by the lender and which remain with the borrower. Under the current rules, the borrower pays for the property valuation, while the lender bears certain costs associated with the mortgage deed, including specified notary, registration and administrative expenses.
This distinction is useful because buyers sometimes work from older information about Spanish mortgage costs that no longer reflects the current rules.
Your lender should provide a clear breakdown of the costs associated with your particular mortgage before you sign.
International buyers should also consider the deposit or equity their lender requires. The amount a bank is willing to finance may differ according to residency, income, property and individual circumstances.
A €500,000 Buyer Scenario
Putting the figures into a realistic example makes the Cost of Buying Property on the Costa Del Sol much easier to understand.
Imagine you’re considering two properties, each priced at €500,000.
Option A: €500,000 resale property
Using the current general 7% ITP rate:
- Purchase price: €500,000
- ITP: €35,000
- Price plus ITP: €535,000
- Plus applicable legal, notary, registration and other transaction costs
Option B: €500,000 qualifying new-build residential property
Using 10% VAT and the general 1.2% AJD rate:
- Purchase price: €500,000
- VAT: €50,000
- AJD: €6,000
- Price plus these taxes: €556,000
- Plus applicable legal, notary, registration and other transaction costs
The purpose of this comparison isn’t to suggest that resale is automatically better value.
A new build may offer features, efficiency, warranties, facilities and lower immediate maintenance that make the additional upfront tax entirely acceptable to the buyer.
It simply demonstrates why the purchase price and total purchase budget are not the same thing.
Don’t Forget the Costs After You Buy
Purchase costs are only part of sensible property budgeting.
Once you own a home on the Costa del Sol, you will also have ongoing expenses. Depending on the property, these may include:
- local property tax
- community fees
- home insurance
- electricity and water
- internet and security
- pool and garden maintenance
- repairs and general upkeep
- property management or keyholding
- applicable taxes associated with ownership
The type of property makes a considerable difference.
An apartment in a gated development may have community fees covering communal gardens, pools, lifts or security. A private villa gives you more independence but may bring direct responsibility for the pool, garden and exterior maintenance.
Why Your Total Budget Matters More Than Your Asking-Price Budget
A good property search starts with the number you’re genuinely comfortable spending in total.
Suppose your maximum available budget is €650,000.
Instead of telling your agent, “Show me properties up to €650,000,” it is much more useful to explain that €650,000 is your complete budget including acquisition costs.
Your agent can then help focus the property search at an appropriate purchase-price level.
This also leaves room to think about what happens immediately after completion.
Will you need furniture?
Do you want to update the kitchen?
Does the terrace need new outdoor furniture?
Will you be installing air conditioning, changing bathrooms or landscaping a villa?
A property can technically fall within your purchase budget while still leaving you financially stretched once you’ve turned it into the home you actually want.
That is why a little breathing room can be valuable.
Local Insight: Don’t Compare Properties on Price Alone
When buyers are comparing several homes, the asking price naturally becomes a major reference point.
But two properties advertised at exactly the same price can create very different financial pictures.
One may be a new build with higher acquisition taxes but very little immediate work required. Another may be a resale with lower purchase tax but need €40,000 of refurbishment. A third may be ready to enjoy immediately but have higher annual community fees.
This is where looking beyond the headline price really helps.
At Sunny Coast Homes, we encourage buyers to compare properties based on the overall ownership picture: purchase costs, condition, location, ongoing expenses and how well the property fits their plans.
The cheapest property isn’t necessarily the best value, just as the most expensive isn’t necessarily the best home.
Planning Your Costa del Sol Property Budget with Confidence
Understanding the Cost of Buying Property on the Costa Del Sol before you start viewing makes the whole process easier.
You can establish a realistic property-price range, compare new builds and resales more accurately and avoid discovering significant additional costs after you’ve already fallen in love with a home.
The main figures to remember are straightforward: the general ITP rate for resale property in Andalusia is currently 7%, while qualifying new residential property is generally subject to 10% VAT plus AJD, for which the general Andalusian rate is currently 1.2%.
Beyond those taxes, allow for the professional and administrative costs relevant to your purchase and consider what you will need after completion.
The aim isn’t simply to find a property at the right asking price. It’s to find a home you can buy — and enjoy — with confidence.
Frequently Asked Questions
How much extra should I budget when buying property on the Costa del Sol?
There is no single percentage that applies accurately to every purchase. The total depends particularly on whether you are buying a resale or new-build property, as well as legal, notary, registration, finance and other applicable costs. Calculate your specific transaction before deciding your maximum property price.
What tax do I pay on a resale property on the Costa del Sol?
The general Transfer Tax (ITP) rate on property purchases in Andalusia is currently 7%. Reduced rates can apply in qualifying circumstances, particularly for certain habitual-residence purchases. Buyers should confirm which rate applies to their individual transaction before completing.
What taxes do I pay on a new-build property?
A qualifying new residential property bought from a developer is generally subject to 10% VAT (IVA). In Andalusia, a purchase subject to VAT will also generally attract AJD, with a current general rate of 1.2%. Specific circumstances can affect tax treatment, so obtain individual advice.
Is it cheaper to buy a resale than a new build?
In terms of the general purchase taxes, resale property currently attracts 7% ITP in Andalusia, while qualifying new residential property generally attracts 10% VAT plus 1.2% AJD. However, tax is only one part of value. Condition, maintenance, specification, location and renovation requirements should also be considered.
Do foreign buyers pay more property purchase tax in Spain?
The applicable property purchase tax is determined by the transaction and relevant tax rules rather than simply charging an overseas buyer a higher general rate because they are foreign. International buyers can, however, have different financing arrangements and should obtain advice appropriate to their residency and circumstances.
Do I need a lawyer when buying on the Costa del Sol?
Independent legal representation is strongly recommended. Your lawyer can carry out due diligence, review relevant documentation and advise you on the legal aspects of the purchase. Legal fees should therefore be included when establishing your overall buying budget.
Who pays the property valuation when using a Spanish mortgage?
Under current Spanish mortgage rules, the borrower is responsible for the property valuation. The lender is responsible for specified other mortgage-related costs, including the notary cost of the mortgage deed, management costs and registration of the mortgage security.
Are furniture and renovation costs included in purchase costs?
No. These are separate from the taxes and transaction costs of buying the property. If a resale needs refurbishment or a new property requires furnishing, it is sensible to create a separate post-completion budget rather than using every available euro for the purchase itself.
What ongoing costs should I consider after buying?
Typical expenses can include local property tax, community fees where applicable, insurance, utilities and maintenance. Villas may also require private pool and garden maintenance, while second-home owners may choose keyholding or property-management services.
Can Sunny Coast Homes help me work out what property budget to search within?
Yes. If you tell Sunny Coast Homes your overall budget and what you’re hoping to buy, we can help you approach the search at a realistic property-price level. This can be particularly useful when you’re comparing resale and new-build options with different acquisition costs.
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