Dreaming of a sunny villa in Tuscany or a modern apartment overlooking the Costa del Sol? Italy and Spain are two of Europe’s most desirable property destinations, attracting investors with their rich culture, wonderful climate, and appealing lifestyle. However, when planning your budget, the advertised property price is just the beginning. In both countries, a series of “hidden” fees and taxes can add a significant amount to the final cost. Understanding these expenses is crucial to avoid unpleasant surprises and make an informed choice.
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To help you navigate the complexities of both markets, we’ve created this detailed analysis. Here, we will break down all the main costs associated with acquiring a property and make a direct comparison to help you understand where your money will go further.
Property Purchase Costs in Spain
The Spanish market is known for its regional variations. Costs can differ significantly depending on the autonomous community where the property is located (e.g., Andalusia, Catalonia, Valencia, or Madrid).
Property Transfer Tax (ITP) for Resale Properties
This is the main tax when buying an existing property from a private seller. The rate is set by the regional government and typically ranges between 6% and 10% of the purchase price stated in the deed.
- Example: In Madrid, the rate is 6%, while in Catalonia and the Valencian Community, it is 10%. In Andalusia, it is a flat 7%.
VAT (IVA) and Stamp Duty (AJD) for New Properties
If you are buying a property directly from a developer, you will pay VAT (IVA) instead of ITP. The standard rate for residential properties is 10%. In addition to VAT, you must also pay Stamp Duty (AJD – Actos Jurídicos Documentados), which is also regional and varies between 1% and 1.5%. This brings the total tax burden for a new property to around 11%-11.5%.
Notary and Land Registry Fees
These costs are regulated by the state and depend on the property’s value.
- Notary Fees: Typically between 0.5% and 1% of the price.
- Land Registry Fee (Registro de la Propiedad): Similar to notary fees, these are between 0.5% and 1%.
Legal Fees
While not mandatory, it is highly recommended to hire an independent lawyer (abogado) to check the property’s legal status, ensure it is free of liens, and represent you during the transaction. Their fee is usually around 1% to 2% of the property’s value (+ 21% VAT on the fee).
Agency Commission – Who Pays?
In Spain, the real estate agency commission is traditionally paid by the seller. However, practices can vary, especially when dealing with international buyers. Always clarify this issue in advance, but in most cases, the buyer has no direct expense for commission.
Property Purchase Costs in Italy
Italy has a more unified tax system compared to Spain, but it has one significant distinguishing feature – the broker’s commission is usually split between the buyer and seller. Understanding the term valore catastale (cadastral value) is key, as many taxes are calculated on this value rather than the market price. It is often significantly lower.
Registration Tax (Imposta di Registro) for Resale Properties
When buying from a private individual, this tax is the main expense.
- For buyers who will not use the property as their primary residence (non-resident/second home), the rate is 9% of the cadastral value.
- If the property is to be a primary residence (“prima casa”), the rate is sharply reduced to 2%.
VAT (IVA) for New Properties
When purchasing a new property from a construction company, VAT is charged on the sale price.
- Standard rate (second home): 10%
- Luxury properties: 22%
- Primary residence (“prima casa”): 4%
When you pay VAT, the Registration Tax (Imposta di Registro) is a fixed fee of €200.
Mortgage and Cadastral Taxes (Imposta Ipotecaria e Catastale)
These are two separate, smaller fees.
- For a resale property purchase, they are a fixed €50 each (€100 total).
- When buying a new property with VAT, they increase to €200 each (€400 total).
Notary Fees (Onorari Notarili)
The notary in Italy plays a crucial role; besides drafting the deed, they also collect and pay taxes on behalf of the state. Their fees range between 1% and 2.5% of the property price, with 22% VAT applied to the fee.
Agency Commission (Commissione Agenzia) – The Big Difference
This is one of the biggest hidden costs property Italy has compared to Spain. It is standard practice here for the commission to be split between the buyer and the seller. The buyer typically pays between 3% and 5% of the purchase price (+ 22% VAT on this amount). This cost must be factored into the budget.
Comparison Table: Italy vs. Spain
To illustrate the differences, here is a comparative table of the expected costs for a buyer of a €250,000 resale property that will not be a primary residence.
| Expense | Italy (Approximate) | Spain (Approximate) | Notes |
| Transfer Tax | 9% (on lower cadastral value) | 6% – 10% (on purchase price) | The tax base is key. In Italy, it can be lower. |
| Notary Fees | 1% – 2.5% | 0.5% – 1% | Higher in Italy. |
| Registration Fee | €100 (fixed) | 0.5% – 1% | A percentage in Spain, a fixed fee in Italy for resale properties. |
| Legal Fees | 1% – 2% (optional) | 1% – 2% (recommended) | Similar in both countries. |
| Agent’s Commission (Buyer’s Share) | 3% – 5% (+ 22% VAT) | 0% (usually) | This is the biggest difference in the burden for the buyer. |
| TOTAL (Approximate) | 12% – 18% | 8% – 13% | The total costs for the buyer in Italy are noticeably higher. |
Експортиране в Таблици
Analysis and Conclusion
As the analysis shows, while the tax rates may seem similar at first glance, the devil is in the details. The main factor that increases the transaction cost for the buyer in Italy is the obligation to pay a significant agency commission. In Spain, this cost is usually borne by the seller, making the total hidden costs for the buyer lower.
On the other hand, in Italy, the transfer tax is often calculated on the lower cadastral value, which can partially offset other fees. In Spain, the regional differences in the ITP tax are huge and can tip the scales. Therefore, before making a final decision, it’s essential to perform a location analysis and request a detailed breakdown of all upcoming payments (a preventivo) from your notary or lawyer.
Ultimately, understanding all the hidden costs property Italy and Spain have is the first step toward a successful real estate investment.
This post is also available in: Български
