What Are the Closing Costs When Buying in Costa del Sol in 2025? A Complete Guide for Property Buyers

Buying a property in Costa del Sol is one of the most exciting steps you can take, whether you are searching for a permanent residence, a profitable investment, or a holiday retreat. Yet, before you finalise your purchase, there is an important consideration that many first-time buyers overlook: closing costs.

According to property experts in Spain, home buyers should expect to spend around 10–13 per cent of the property’s purchase price on additional costs beyond the sale price. These include taxes, notary fees, legal expenses, and administrative charges. Understanding these costs early ensures you can plan your budget accurately and avoid unwelcome surprises.

In this comprehensive guide, Dolan Properties explains the different types of closing costs you can expect when buying property in Costa del Sol in 2025, providing clarity and confidence as you move through the process.

Understanding Closing Costs in Costa del Sol

Closing costs refer to all additional expenses that arise when completing a property purchase in Spain. These costs are paid on top of the property’s sale price and cover everything from government taxes to legal representation.

The total usually ranges from 10 to 13 per cent of the property’s value. However, the exact percentage depends on whether you are buying a new build or a resale property. New developments are subject to VAT and stamp duty, while resale homes require payment of a property transfer tax. Understanding the distinction between these two types of purchases is key to calculating your final costs accurately.

Taxes Involved When Buying Property in Costa del Sol

Property Transfer Tax (ITP)

If you are buying a resale property, you will need to pay the Impuesto de Transmisiones Patrimoniales (ITP). In Andalusia, the current rate is seven per cent. For example, purchasing a home would result in an ITP payment based on this rate.

VAT (IVA) on New Builds

When purchasing a newly constructed property directly from a developer, you pay Value Added Tax (IVA) instead of ITP. The rate is typically ten per cent of the property price.

Stamp Duty (AJD - Actos Jurídicos Documentados)

For new builds, an additional one point two per cent Stamp Duty (AJD) applies in Andalusia. This tax is paid to the local government for registering the property purchase in official records.

Example

Resale home: ITP = seven per cent

New build: VAT = ten per cent + AJD = one point two per cent

The difference demonstrates why it is essential to identify the type of property you are buying before estimating total costs.

Notary and Land Registry Fees

A notary in Spain acts as an independent legal authority who certifies the property deed, verifies contracts, and ensures the transaction follows Spanish law. The buyer typically covers these costs, which usually range between 0.5 per cent and 1 per cent of the property’s value.

Following the notary’s approval, the deed must be registered at the Land Registry (Registro de la Propiedad). The Land Registry confirms ownership and records the transaction officially. Registry fees generally range between €400 and €1,000, depending on the value and location of the property. It is wise to request a written estimate of these fees in advance to avoid last-minute adjustments.

Legal and Administrative Costs

Engaging a qualified Spanish property lawyer is essential, particularly for international buyers. A lawyer ensures that your purchase is legally secure and that all paperwork is handled correctly. Legal fees typically amount to around 1 per cent of the property price, covering services such as due diligence, contract reviews, and liaison with notaries and local authorities.

In addition to legal representation, you may need a gestor, a professional who assists with administrative procedures such as registering utilities, obtaining your NIE (Foreigner Identification Number), and paying local taxes. The cost of a gestor usually ranges from €200 to €500.

Foreign buyers who do not speak Spanish fluently may also need a sworn translator during official signings, which costs approximately €100 to €300.

Mortgage-Related Expenses

If you are purchasing your property with the help of a mortgage, there are additional costs to factor into your budget.

Firstly, banks require an official property valuation (tasación) to determine the home’s market value. This process generally costs between €300 and €600. Secondly, some lenders charge arrangement or administration fees, often between 0.5 per cent and 1 per cent of the loan amount.

You will also be required to take out home and life insurance linked to the mortgage, ensuring protection against unforeseen circumstances. Non-resident buyers may face extra documentation expenses for notarised translations or international certifications.

Optional but Common Extra Costs

Beyond mandatory fees, there are optional but common expenses that many buyers choose to include in their property purchase budget.

Some buyers hire an independent surveyor to assess the condition of the property, particularly when purchasing an older home. This provides reassurance and can highlight potential structural or maintenance concerns before completion. Surveys generally cost between €400 and €800.

Setting up utilities such as electricity, water, and internet services also involves small administrative charges.

Additionally, international buyers transferring funds from abroad should consider currency exchange fees. Using a specialist currency company instead of a traditional bank can save significant amounts. Lastly, if you travel to Spain for viewings, legal appointments, or the final signing, you should include travel and accommodation expenses in your budget.

Example Calculation: Closing Costs for a €500,000 Property in Costa del Sol

Scenario 1 – Resale Property

Property Transfer Tax (ITP): €35,000
Notary and Registry: €2,500
Legal Fees: €5,000
Miscellaneous Costs: €2,000
Estimated Total: €44,500 (approximately 8.9 per cent of the purchase price)

Scenario 2 – New Build Property

VAT (IVA): €50,000
Stamp Duty (AJD): €6,000
Notary and Registry: €2,500
Legal Fees: €5,000
Estimated Total: €63,500 (approximately 12.7 per cent of the purchase price)

To avoid financial strain, buyers should always set aside at least 12 to 13 per cent of the property price for closing costs.

How to Reduce Your Closing Costs Legally

While these costs are unavoidable, careful planning can help you reduce your total expenditure.

You may be able to negotiate professional fees, as some lawyers and notaries offer fixed-price packages for property transactions. Comparing mortgage offers from different banks can also help you find lenders that waive or lower arrangement fees.

When transferring money internationally, use a reliable currency exchange specialist to obtain competitive rates and avoid high bank charges. Finally, working with a transparent estate agency like Dolan Properties ensures you receive a full cost breakdown before committing to a purchase, allowing you to make well-informed financial decisions.

Why Understanding Closing Costs Matters

Being aware of all closing costs is essential for planning your budget and ensuring a smooth buying process. For international buyers, transparency in cost estimation builds trust and prevents unexpected expenses during or after completion.

Accurate budgeting also helps with mortgage applications, long-term financial planning, and ensuring compliance with Spanish legal requirements. Partnering with professionals who provide clear, detailed guidance at every step significantly reduces stress and risk.

Why Choose Dolan Properties?

Dolan Properties combines deep regional expertise with a commitment to delivering an exceptional client experience for every buyer.

The agency’s local knowledge ensures clients receive accurate advice about taxes, fees, and market trends in Costa del Sol. Their proven track record in guiding international buyers means they understand the specific challenges faced by foreign investors and expatriates.

Dolan Properties also offers personalised support, tailoring recommendations and property options to meet each client’s goals. They collaborate closely with respected notaries, lawyers, and mortgage specialists to guarantee a smooth and compliant purchase. Above all, their dedication to transparency and professionalism ensures clients feel supported from the initial consultation to the final signing.

Frequently Asked Questions

How much should I budget for closing costs in Costa del Sol?
Buyers should set aside around 10 to 13 per cent of the property’s purchase price to cover all closing costs. The total varies based on property type, financing, and additional services such as legal advice or translation. Always ask your estate agent and lawyer for a detailed cost estimate before signing any contracts.

Who pays the notary and registry fees in Spain?
The buyer is generally responsible for both the notary and registry fees, as these are directly linked to the transfer of ownership. However, in some cases, such as off-plan developments or negotiated sales, the seller or developer may cover part of these expenses. Your lawyer can help clarify this before completion.

Do foreign buyers pay higher taxes in Spain?
Foreign buyers pay the same taxes as Spanish residents when purchasing property. However, non-residents must obtain an NIE (Foreigner Identification Number) and may face additional administrative costs when managing paperwork or transferring funds from abroad.

Are closing costs tax-deductible in Spain?
For those purchasing a rental property or investment home, some closing costs, such as legal, notary, or mortgage-related expenses, may be deductible against rental income. Tax rules differ depending on your residency status, so it is advisable to seek guidance from a Spanish tax adviser.

Can I buy property in Costa del Sol without a lawyer?
Technically yes, but it is highly discouraged. A qualified property lawyer safeguards your investment by ensuring the property has no debts or legal issues, that contracts are accurate, and that funds are transferred securely. For foreign buyers, having a lawyer provides peace of mind throughout the entire process.

Conclusion

Buying property in Costa del Sol in 2025 offers exciting opportunities for both lifestyle and investment, but understanding the closing costs is crucial for a successful and stress-free transaction. Taxes, legal fees, and administrative expenses are all essential elements that ensure your purchase is legally sound.

At Dolan Properties, we guide buyers through every stage of the process, from the initial search to legal completion, ensuring all costs are transparent and properly managed. If you are ready to begin your property journey in Costa del Sol, contact Dolan Properties today for professional, reliable assistance that makes your purchase as straightforward as possible.

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