Buying property in Spain: build a complete budget

1. Define what the price includes

Our starting point is the agreed price of a particular property, not a national average. Request a written inventory covering parking, storage, furniture and equipment. Before comparing two offers, make their scope comparable. A cheaper apartment needing repairs and temporary accommodation during those repairs may not suit your available cash.

Record the offer date, address, type of floor-area measurement and condition. Keep asking prices separate from confirmed completed-sale prices. Label missing costs as unconfirmed rather than zero. This prevents an incomplete estimate from looking like a finished budget and keeps unanswered questions visible.

• Obtain contractor quotations for immediate work and furnishings.
• Ask whether quoted amounts include taxes and intermediary services.

Sources: Agencia Tributaria: property-transaction classifier

2. Determine this transaction's taxes

Agencia Tributaria explains that a developer's first housing delivery normally falls under IVA, while a private individual's sale falls under ITP. The marketing label new-build does not establish the treatment. Its property-transaction classifier helps identify the regime and links to information from the relevant autonomous community.

Ask your adviser to name the taxes, taxable bases, rates, relief conditions, deadlines and supporting documents in writing. Do not apply one ITP or AJD rate everywhere. If relief depends on your circumstances, confirm eligibility first and run a second budget without it. This makes uncertainty explicit before payment rather than turning an assumed discount into a funding gap.

• Keep the current regional rule and calculation date with the estimate.
• Ask about AJD and the treatment of any separately supplied property.

Sources: Agencia Tributaria: housing purchases and IVA/ITP · Agencia Tributaria: property-transaction classifier

3. Separate acquisition from mortgage costs

Banco de España describes mortgage formalisation costs under Ley 5/2019: valuation is a customer cost, while several costs of formalising the loan fall to the lender. This does not mean that the lender pays for completing the property purchase.

Request separate purchase and lending estimates. Reconcile notary, registry, gestoría, lawyer and valuer services so the same item is not counted twice. Our planning checklist also separates currency conversion, transfers and travel. Obtain financing terms before accepting commitments you cannot meet without the loan; an intermediary's verbal assurance is not the same as confirmation from the lender.

• Compare loan offers using the same term and amount.
• Identify required services separately from optional extras.

Sources: Banco de España: mortgage formalisation costs

4. Build the ownership budget

IBI is a local property tax. For a non-resident individual, Agencia Tributaria separately addresses rental income and imputed income for own-use or vacant urban property. These questions are not settled by paying the acquisition tax.

Request the property's actual bills and building-manager documents for community charges, insurance, utilities, maintenance and planned works. Separate documented amounts from your contingencies. A holiday-home scenario should include periods when you are absent; a rental scenario should include vacancy. A repair reserve is your planning assumption, not a tax rate or a guarantee that every unexpected expense will be covered.

• Establish responsibility for building works already agreed.
• Obtain tax advice that takes your residence status into account.

Sources: BOE: Local Treasury Law, property tax · Agencia Tributaria: property-income categories for non-residents

5. Test cash availability at each date

Our editorial check is price plus confirmed taxes and services, preparation costs and an ownership reserve. Not every line applies to every transaction. Make a calendar for the initial payment, balance, service bills, taxes and recurring costs. Do not add a deposit again if it is already included in the full purchase price.

Run a comfortable scenario and an adverse one: delayed finance, more expensive repairs and no rental income. Show cash remaining after each stage, not only the total. Before signing, have an independent Spanish lawyer and tax adviser review the calculation. This framework does not replace their property-specific assessment.

Sources: Banco de España: mortgage formalisation costs