What taxes do you pay when buying a property in Madrid?

Buying a property in Madrid is not just about agreeing on a price. The total cost includes taxes and closing expenses that should be calculated from the outset.

In this guide, we explain which taxes you will pay, the differences between new and resale properties, and the key cost items to consider before signing.

1) Resale property: ITP (Property Transfer Tax)

If the property is resale, the main tax is ITP, applied to the purchase price or reference value.

• Paid after signing.
• The taxable base may vary.
• It is one of the most significant costs.

2) New build: VAT + AJD

For new properties, you will pay VAT and AJD.

• VAT replaces ITP.
• AJD depends on the region.
• Advance payments must be properly documented.

3) Notary, Registry and administration

These costs include the public deed, registration and administrative processing.

They are unavoidable and must be included in the total budget.

4) If financing is involved

• Property valuation
• Bank fees (if applicable)
• Administrative costs

It is essential to evaluate the real financial cost.

5) Other costs

• Property tax (IBI)
• Community fees
• Utilities
• Renovation and furniture

Garage and storage units may involve additional costs.

6) Buying for investment

You should include taxes, closing costs, preparation expenses and estimated net rental income.

The focus should be on real net yield and future liquidity.

7) Practical recommendation

Before signing a deposit contract, calculate the total cost:

• Purchase price
• Applicable taxes
• Expenses
• Safety margin

Achetez votre nouvelle résidence

How BARNES Madrid supports you

At BARNES Madrid, we help you estimate the total acquisition cost and guide you through the buying process with clarity and control.

We welcome you at 15 Velázquez (Barrio de Salamanca). BARNES Madrid.