Taxation in Madrid
2026-10-26
Costs of buying a home in Madrid: taxes, notary and land registry
Beyond the price of the home, buying in Madrid involves taxes and formalisation costs that are worth budgeting for from the outset: the tax that applies depending on whether the property is new or resale, notary and land registry fees, an optional agent (gestoría) and, where there is a mortgage, a valuation. This guide sets them out and explains who pays each one, based on information published by the Community of Madrid.
If you are comparing options, you can see our luxury homes for sale in Madrid and read about the property purchase process.
Two blocks of costs: taxes and formalisation
According to the Community of Madrid, buying a home, whatever its use, involves taxes and other costs: valuation, notary and land registry fees and, where applicable, an agent’s fees. There is no single percentage, because the amount depends on the price, the type of property and whether a mortgage is involved, so it is best to calculate case by case.
Taxes: resale and new homes
On a resale home the tax payable is the transfer tax (ITP). In the Community of Madrid the general rate is 6%; you will find the details in our guide to transfer tax (ITP) in Madrid.
On a new home, VAT and stamp duty (AJD) are payable. The Community of Madrid states a VAT rate of 10% of the deed value for free-market or publicly protected housing, and an AJD that ranges from 0.75% to 0.2% depending on the type of home. For more detail see buying a new-build home in Madrid and taxes when buying a home in Madrid.
Notary, land registry, agent and valuation
- Notary: fees, known as aranceles, are approved by the Government by royal decree and are the same for all notaries in Spain.
- Land Registry: registration fees are set by law and depend on the purchase price. Registration is not compulsory but is advisable.
- Gestoría (agent): optional; it handles procedures such as registration, tax payment and processing the deeds, and its fee depends on the firm.
- Valuation: the law requires the property to be valued by a valuation company before a mortgage loan is granted, and the cost varies between companies.
If you buy with a mortgage
When the purchase is financed, stamp duty (AJD) also arises on the mortgage deed. The Community of Madrid notes that, since 10 November 2018, the taxpayer for that tax is the lender; the AJD on the sale deed is still paid by the buyer. If you live outside Spain, you may find our guide to buying a home in Madrid as a non-resident useful.
Who pays what
Unless the contract says otherwise, the buyer bears the deed, registry and tax costs of the purchase, while the seller bears the municipal capital gains tax (plusvalía) and the cost of the original deed. To understand the seller’s tax, see what the municipal capital gains tax is in Madrid. It is wise to record the split of costs in the preliminary contract; our guide explains what a deposit contract (arras) is.
What to check before signing
Before committing, request a nota simple from the Land Registry to learn about any charges and confirm that the seller is the owner, ask for the receipts for the IBI property tax and the owners’ community fees, and review the energy certificate. If you need help assessing a specific property, you can contact BARNES Madrid.
Frequently asked questions
How much does it cost to buy a home on top of the price?
It depends on the type of property and whether there is a mortgage. You must add the relevant tax (ITP on resale homes; VAT and AJD on new homes), notary and registry fees, a valuation if there is a mortgage and an agent if you hire one.
Who pays the AJD on the mortgage?
According to the Community of Madrid, since 10 November 2018 the taxpayer for the mortgage AJD is the bank.
Is it compulsory to hire a gestoría?
No. It is optional; it can handle registration, tax payment and processing the deeds.
Who pays the municipal capital gains tax?
Unless agreed otherwise, the seller bears the municipal capital gains tax (plusvalía).
Discover homes for sale in Madrid
How BARNES Madrid can help
At BARNES Madrid we support domestic and international buyers throughout the process, from selecting the home to signing. To receive a personalised selection, contact BARNES Madrid; if you are an owner, you can request a property valuation.
We welcome you at Velázquez 15, in the heart of the Salamanca district.
The information in this article is indicative and based on that published by the Community of Madrid (comunidad.madrid), consulted in October 2026. Catalogue references correspond to the properties published by BARNES Madrid as of 13 October 2026. It does not replace professional tax or legal advice.
