The Real Costs of Investing in Property in Spain – Avoid Losing €100K!

Dreaming of buying property in Spain? Before you take the plunge, make sure you understand the true costs involved in buying and selling real estate on the Costa del Sol. In this episode of Costa Einblicke, Kian breaks down the hidden fees, taxes, and deal-breaking mistakes that can cost you thousands—or even €100,000.

💸 Hidden Costs of Buying Property in Spain

Many buyers are surprised to learn that the actual cost of purchasing a property in Spain goes far beyond the list price. Here’s what to expect:

• Transfer Tax (ITP) on resales: 7% in Andalucía

• VAT on new builds: 10%

• Stamp Duty on new builds: 1.2%

• Lawyer Fees: ~1% of the purchase price

• Notary & Land Registry Fees: ~1–1.5%

• Renovation & Furniture Costs: Often overlooked but essential for investment properties

Total purchase costs can range from 9% to 13.2% of the property price—before you even move in!

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💰 The Real Cost of Selling Property in Spain

Selling a property? Be prepared for more costs on the way out:

• Real Estate Agent Fees: ~5–6% (including VAT)

• Lawyer Fees: ~1% (plus VAT)

• Plusvalía Municipal: Local tax on the increase in land value

• Capital Gains Tax (CGT):

  • 3% retained at the time of sale for non-residents

  • Final CGT calculated on actual net profit

All in, selling your property can cost up to 10% of the sale price.

📉 Real-World Example:

You buy a property for €500,000.

• Purchase costs: €50,000 → Total invested = €550,000

You sell it for €500,000.

• Selling costs: ~€50,000 → You net €450,000

Result? You’ve lost €100,000.

🛠️ Free Tool: Property Cost Calculator

Don’t guess—calculate! Use our free Property Cost Calculator to see exactly how much you’ll spend and earn when buying and selling in Spain. Download here: 👉 Click for the Calculator

📈 How to Avoid Losing Money

✅ Buy early in a new development (pre-launch prices offer better ROI) ✅ Understand market value and only buy below or at market price ✅ Define your investment timeline ✅ Account for purchase & selling costs from day one ✅ Don’t assume appreciation will cover your costs in a short timeframe ✅ Work with a trusted real estate agent to align your goals with the market.

🤔 Should You Buy Now?

If you’re planning to hold your property long-term (10–15 years), the market appreciation may make your investment worthwhile. But if you’re planning a short-term flip, be extremely cautious. Unless you buy significantly below market value, you could lose money.

For professional investors, there may be tax advantages through corporate structures. But for most buyers, understanding these costs is critical.

Knowledge is your best investment.