Buying and owning property in Spain


The following overview answers the most frequently asked questions from clients:

how the purchase of a property takes place, when and what is paid and what are the regular costs associated with owning a property in Spain (Andalusia / Costa del Sol).

The data is indicative - specific amounts vary depending on location, developer and type of property.



1. How does the purchase of real estate take place?


Buying from a developer (new construction, "off plan")


Payment of the purchase price is divided into three steps:

  1. Reservation fee – approximately EUR 6,000-10,000, which is used to reserve the property.
  2. Signing of the future contract agreement - 30% of the purchase price is paid, usually 2-3 months after the reservation, after the KYC/AML process (client identification) has been completed. Some developers may have a payment schedule - e.g. 15% is paid upon signing the SOSBK, another 15% is paid in monthly installments during construction.
  3. Handover of keys and signing of the purchase decree at a notary - payment of the remaining 70% of the purchase price.


The role of the legal representative (law firm) throughout the entire process:

  • verifies all construction and ownership documentation with the developer,
  • prepares and explains a draft contract for a future contract (developers usually deviate little from the standard terms of the contract),
  • in the case of mortgage financing, it contacts the developer's bank or another bank, or helps with the selection of a bank; the bank will preliminarily approve the application based on the client's income and assets and then definitively after the property has been appraised by an expert appointed by the bank,
  • communicates with the developer and prepares documents for the notary before handing over the property,
  • resolves complaints about defects in the property against the developer after handover.


By signing the purchase decree with a notary, the buyer becomes the legal owner, receives the keys and all documentation for the property (appliance warranties, certificates, energy label).


Buying second hand

  • The buyer pays a transfer tax of 7% of the purchase price.
  • The commission to the real estate agent and the fee to the law firm are subject to agreement between the parties (including what is included in the purchase price).



2. One-time costs associated with the purchase


Purchase from the developer:

  • DPH (VAT): 10%
  • Transfer tax (AJD): 1.2%
  • Law firm fee: approx. 1%
  • also fees to the notary and the land registry (not included in the percentage above)


Buying second hand:

  • Transfer tax (ITP): 7%
  • Broker commission and lawyer fee according to individual agreement



3. What needs to be done after the purchase


  • NIE number – a foreigner's tax identification number, required for every buyer; applied for at the local police station, processed by a lawyer based on a power of attorney.
  • Bank account – required to cover operating costs; it is recommended to open one with a local bank.
  • Contracts with energy suppliers (electricity, water), internet and setting up collection payments.
  • Reporting new ownership to the SVJ and relevant authorities.
  • Registration of ownership in the real estate registry and payment of related taxes.
  • Cancellation of any developer mortgage on the property and its deletion from the register.
  • It is recommended to arrange home insurance.


The owner of a Spanish property then files an annual income tax and property tax return.



4. Regular monthly costs of owning a property


  • Community fees (SVJ): usually 150–250 EUR/month; for residences with more extensive facilities (indoor and outdoor swimming pools, gym, clubhouse, wine cellar, cinema, golf simulator, etc.) 400–500 EUR/month – the higher fee corresponds to the regular maintenance of this equipment.
  • Energy - water and electricity: according to actual consumption, approximately 100–150 EUR/month.
  • Internet: approx. 20 EUR/month.


5. Annual taxes


  • IBI property tax (similar to the Czech property tax) – it is set annually by the municipality (ayuntamiento) as a percentage of the cadastral value of the property (usually in the order of tenths of a percent to around 1%); the specific amount varies from municipality to municipality, for a regular apartment it is typically hundreds of EUR per year.
  • IRNR tax – applies to non-residents who do not rent out the property (so-called imputed income from property ownership, see also point 7 below). The tax base is 1.1% of the cadastral value (if revised in the last 10 years), otherwise 2% of the cadastral value. The tax rate is 19% for EU/EEA tax residents and 24% for residents of other countries. For a regular apartment, the resulting tax is usually in the order of hundreds of EUR per year. If the property is rented out for part of the year, this imputed tax is calculated only proportionally for the days when it was not rented out – for the days of actual rental, the income tax described in point 7 is paid instead.
  • Both taxes (IBI and IRNR from vacancy) together for a regular apartment that is not rented usually amount to a few hundred to around a thousand EUR per year.


6. Renting a property


Short-term (tourist) rental

  • Requires a tourist license (VUT) issued by the Junta de Andalucía.
  • The condition is that the SVJ has not explicitly banned tourist rentals in the house. According to the Law on Apartment Ownership (LPH, art. 17.12, amendment valid from April 2025 confirmed by the Supreme Court rulings), the SVJ can limit or prohibit rentals by a majority of 3/5 of the owners' votes, which also represents 3/5 of the co-ownership shares - so it is not 2/3, as is customary, but 3/5 (60%). This rule applies nationwide, not just in Andalusia.
  • Without a tourist license, the property cannot be offered on platforms such as Booking or Airbnb.
  • The license can be transferred to the new owner when purchasing a second-hand property that already has it, but the transfer is not automatic - the office may require proof of compliance with current legislation, so it is recommended to check the status of the license and SVJ records before purchasing.
  • VAT for short-term rentals is handled differently depending on the chosen model of cooperation with the management company. ANDALIFE COLLECTION, SL provides its services in the first of the mentioned models:
  • The property is rented (rented to operate) to a management company, which continues to operate it itself and invoices/pays the owner a share of the actual sales achieved - this is the most common model on the Costa del Sol. In this case, the owner's invoice to the management company is subject to VAT at 21%, because it is not a rental of an apartment for living (which would be exempt from VAT), but a rental to a company for business use - from a tax perspective, the owner thus becomes a person doing business in Spain and a VAT payer. The management company's own invoicing to the end guest may then be exempt from VAT, unless the company provides additional "hotel" services (cleaning and changing linen during the stay, reception, etc.) - if it does provide them, it applies VAT at 10%.
  • The owner rents the property directly to end guests on a short-term basis (in his own name, e.g. via Booking/Airbnb, the management company only provides the service) – this depends on whether the aforementioned “hotel” services are provided for the rental: if so, the rental is subject to 10% VAT; if not, it may remain exempt from VAT, but it is usually still necessary to register administratively as a business person.
  • In both cases, from July 1, 2028, according to EU Directive 2025/516, every short-term rental of up to 30 nights will be subject to VAT, regardless of whether additional services are provided - the difference between the models is being erased for VAT exemption purposes.
  • Being a VAT payer means additional administration, but on the other hand it allows you to apply for a refund of the VAT paid when purchasing a property. According to the general rule for investment property, the VAT deduction is assessed for a period of 10 years from the acquisition - if the property ceases to be rented out earlier, a proportional part of the VAT for the remaining years is refunded.


Medium-term rental (2–11 months)

  • It is not subject to tourist license regulation.
  • It is not subject to VAT.


7. Rental income tax


It applies to all forms of rental described above (short-term/tourist, medium-term and share of sales paid by the management company in the césion de explotación model) - at the moment when the property generates actual rental income, instead of the imputed tax from point 5, the tax on actual income is paid:

  • Tax non-residents (the most common case) tax rental income with IRNR taxes:
  • EU/EEA residents: rate of 19% of net income – demonstrable costs associated with the rental can be deducted (community fees, energy, repairs, insurance, property depreciation, etc.),
  • residents of other countries (outside the EU/EEA): rate of 24% of gross income – deduction of costs is not possible here.
  • The tax is declared quarterly using the Modelo 210 form.
  • The share of sales paid to the owner by the management company in the césion de explotación model is assessed for income tax purposes in the same way as regular rental income (above) - it is therefore the same IRNR regime of 19%/24%, if the owner does not have his own employees or establishment in Spain (in such an exceptional case, it would be assessed as an activity with a so-called permanent establishment and taxed differently, similar to corporate tax).
  • The so-called 60% tax base reduction, which is sometimes mentioned for rentals in Spain, applies exclusively to long-term rentals serving as the tenant's permanent residence, and moreover only to tax residents of Spain (IRPF regime). It does not apply to tourist or medium-term rentals, and does not exist at all for tax non-residents (IRNR).
  • If the owner becomes a tax resident of Spain, the taxation of rental income switches from IRNR to IRPF at a progressive rate - in this case, we recommend individual consultation with a tax advisor.


Note: the tax and fee rates listed correspond to the current legislation at the time of writing (August 2026) and may change over time - in particular, the rules regarding VAT for short-term rentals have been changing since 2028. The specific amounts (purchase price, community fees, taxes) always depend on the specific property and location - the ranges listed serve as a guide and in a specific case it is advisable to have them confirmed by a lawyer or tax advisor.