What is the total cost when buying a flat in Madrid? As a rule of thumb, count on a total cost addition of around 7% to 11% on top of the purchase price. This makes Madrid one of the most fiscally attractive regions in Spain. The exact cost structure depends on the type of property: for existing property, you will pay 6% transfer tax (ITP), while for new construction you will have to pay 10% VAT (IVA) plus 0.75% stamp duty (AJD).
1. Taxes on the Purchase Price: New Construction vs Existing Property
The tax treatment of your purchase is determined by the nature of the property. Below are the specific rates applicable within the Comunidad de Madrid.
Existing property: transfer tax (ITP)
When you buy an existing property (resale), you do not pay VAT but registration fees. In Spain, this is called the Impuesto sobre Transmisiones Patrimoniales (ITP).
- Fare in Madrid: The standard rate is 6% of the purchase price (or the tax reference value if higher).
- Comparison: This is significantly lower than in other popular regions such as Valencia or Catalonia, where the ITP is often 10%.
- Reductions: For specific cases, such as the purchase of a family home by large families (familia numerosa), reduced rates of 4% may apply.
New construction: VAT (IVA) and Stamp duty (AJD)
When buying a house on plan or a newly built flat ("first occupancy"), taxation is structured differently.
- VAT (IVA): You pay 10% VAT on the purchase price. This is a national rate that is the same throughout Spain (excluding Canary Islands).
- Stamp duty (AJD): On top of VAT, you pay the Impuesto sobre Actos Jurídicos Documentados. This is a regional tax. In Madrid, this rate is set at 0,75%.
Expert Insight: "Many buyers forget the stamp duty (AJD) in their calculation for new builds. Although 0.75% in Madrid is low compared to the 1.5% in Andalusia or Valencia, it remains a cost of thousands of euros on an average flat."
Read more about the purchase process of a new-build property in Spain.
2. Notary and registration fees
In addition to taxes, you need to take into account the administrative handling of the deed (Escritura de Compraventa).
- Notary fees: The rates (aranceles) are set by law based on a scale related to the purchase price. For an average flat in Madrid, these costs range between €1,200 and €2,500.
- Property Register (Registro de la Propiedad): After signing, the deed must be registered in the land registry and ownership register. Count on approximately €600 to €1,000.
3. Legal Counselling and Due Diligence
It is crucial to understand that the role of the notary in Spain narrower is than in Belgium or the Netherlands.
- No duty to investigate: A Spanish notary verifies identities and cadastral status at the time of signing, but performs no conduct in-depth investigations into urban planning infringements, outstanding debts of the VME (Association of Co-owners) or tourist rental licences.
- Necessity lawyer: For a safe purchase, guidance from a specialised lawyer or attorney is necessary. This will conduct the due diligence out. The fees for this are usually 1% of the purchase price (plus VAT), with a minimum rate for smaller files.
Note: Never sign a reservation contract or arras (advance contract) without legal control. In Spain, these contracts are often binding without conditions precedent for financing.
4. Additional costs (Bank, NIE and Nuts)
Finally, consider the following miscellaneous cost items ("small costs"):
- Bank cheque: Payment at the notary is often done in Spain via a guaranteed bank cheque. Spanish banks often charge high commissions for this (sometimes up to 0.5% of the amount), unless otherwise negotiated in advance.
- NIE number: The Número de Identidad de Extranjero is your tax identification number. Application fees through an office start from around € 150 – € 200 per person (including guidance), although the pure fee is only around €10.
- Utilities: Transferring water and electricity contracts administratively costs about € 200 – € 300.
Read more about the options to apply for a NIE number.
Summary Table: Cost summary Madrid
| Cost item | Existing Property (Resale) | New building |
| Tax | 6% (ITP) | 10% (IVA) |
| Stamp duty (AJD) | 0% | 0,75% |
| Notary & Register | €1,800 - €3,500 (estimated) | €1,800 - €3,500 (estimated) |
| Legal guidance | Approx. 1% + VAT | Approx. 1% + VAT |
Want an exact calculation for your budget? Get in touch for a personalised cost estimate. Then feel free to contact on.
Frequently asked questions (FAQ)
How much tax do I pay when buying a house in Madrid?
In the Madrid region, you pay 6% transfer tax (ITP) when buying an existing property. For new construction, you will pay 10% VAT (IVA) and 0.75% stamp duty (AJD).
Are purchase costs lower in Madrid than in other Spanish regions?
Yes, Madrid has one of the lowest ITP rates in Spain (6%). By comparison, in the Valencia region and Catalonia, the transfer tax is typically 10%.
What does a notary in Spain do?
The Spanish notary takes care of the authentic deed and entry in the register, but does not carry out any legal due diligence on the condition of the property or hidden defects. For this, you need to hire a lawyer.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
