Property Buying Costs in Costa Blanca South: What You Really Need to Budget

Ingrid and Lars, a retired couple from Malmö, sold their house in Sweden and set aside €260,000 to buy a two-bedroom villa near Orihuela Costa. The villa they found was listed at €250,000 — comfortably within budget, they thought. By the time they'd paid ITP, legal fees, notary and registration costs, they were closer to €280,000. It wasn't a bad surprise exactly, but it was one they hadn't planned for, and it meant dipping further into savings they'd earmarked for furnishing the place…

(Ingrid and Lars are a composite example based on costs typical for buyers in this situation — not a specific client — but the numbers below are real.)

Their experience is a common one. The €250,000 villa you find in Costa Blanca South may cost considerably more than €250,000 by the time you get the keys. The price you see in the listing is only the starting point — what really matters is your total acquisition budget, including taxes, legal fees, and the costs involved in completing the purchase.

In most cases, buyers should expect additional costs of roughly 10–13% on top of the purchase price, depending on whether the property is a resale or a new build, and on individual circumstances. These extra costs are often overlooked at the start of the search, but on a retirement budget, they can meaningfully change what's actually affordable.

So what does this look like in practice for a €200,000, €300,000, or €400,000 home? Below, we break down the key costs with clear examples, so you know what to actually budget before making an offer — not just what the listing price says.

How Much Does It Cost to Buy a Property in Costa Blanca South?

There are two main purchase scenarios:

• Resale property: normally subject to Property Transfer Tax (ITP).

• New-build property bought from a developer: normally subject to VAT (IVA) and Stamp Duty (AJD).

In the Valencian Community, the standard ITP rate is 9% as of 1 June 2026 — reduced from the previous 10% rate — with an 11% rate for properties valued above €1 million, confirmed by the Agència Tributària Valenciana. If you're comparing this article against older sources online, that's why some may still quote 10%: the rate genuinely changed partway through this year, and Ingrid and Lars's purchase fell just on the right side of that change.

For new homes, the general VAT rate is 10%, plus AJD, with the general rate in the Valencian Community currently 1.4%.

This means the tax bill alone can represent a substantial part of your total buying budget — often the single biggest line item after the property price itself, and it was for the retired couple too.

Taxes and Fees When Buying a Property

1. Resale properties: ITP

If you are buying a previously owned property, you will generally pay Impuesto sobre Transmisiones Patrimoniales (ITP) rather than VAT.

For a typical residential purchase below €1 million, the current standard rate in the Valencian Community is 9%.

There is an important detail that overseas buyers should understand: ITP is not necessarily calculated simply from the price you agree with the seller.

One detail overseas buyers often miss, and one their lawyer flagged early on: ITP isn't necessarily calculated from the price you agree with the seller.

The Spanish Cadastre's reference value (valor de referencia) can set the minimum taxable base for ITP and AJD — if your agreed price is lower than this reference value, the higher figure becomes the taxable base regardless. 

In Ingrid and Lars's case the two figures matched, but it's worth checking a property's fiscal information before completing a purchase, not after. 

2. New-build properties: VAT and AJD

A new property purchased from a developer is generally subject to 10% VAT. The Spanish Tax Agency confirms that first deliveries of new homes by developers are subject to VAT, while second and subsequent deliveries generally fall under ITP.

In the Valencian Community, the general AJD rate for taxable property deeds is currently 1.4%. There are reduced rates for certain transactions, including qualifying purchases of a habitual residence, so the applicable rate should be confirmed for each individual purchase.

3. Lawyer, notary and Land Registry

Taxes are only part of the cost.

Buyers should also allow for professional and administrative expenses, including:

• Independent legal advice

• Notary costs

• Property registration

• Gestoría or administrative services, where used

• Other documentation and transaction-related expenses

For many European retirees, this is the first time buying property outside their home country and under a different legal system — and often the largest single financial decision of retirement. Having an independent lawyer working solely for you means someone is verifying legal ownership, checking for debts or charges attached to the property, and reviewing planning and legal documentation before you commit savings you can't easily replace at this stage of life.

It's worth understanding that your lawyer and the notary play different roles. Ingrid and Lars's lawyer worked exclusively for them, protecting their interests throughout. The notary, by contrast, is a public official who ensures the transaction follows Spanish law and that everyone signs correctly and understands the agreement — impartial by design, regardless of who selects them. You're free to choose your own notary in Spain, as they did. 

The notary also verifies ownership details and existing charges, and ensures the deed is correctly submitted to the Land Registry — the step that ultimately secures your legal ownership.

Costs for these services vary by property and level of support, so include them in your budget from the very beginning.

At E-Style Spain, we have a network of trusted local lawyers who regularly assist international property buyers. If you need legal support during your purchase, we can introduce you to a suitable professional who can advise you independently on the legal side of the transaction. 

What Will You Actually Pay? Examples

The following examples illustrate the main property taxes only and are not complete purchase-cost quotations.

Here's their full breakdown, from offer to keys:

That's roughly 11% on top of the listing price — right in the middle of the 10–13% range most buyers should expect, and close to the €280,000 they actually ended up spending once smaller admin costs were included.

To see how that scales at other price points, here's the same tax calculation applied more broadly:

*Illustrative calculation using the general 10% VAT and 1.4% AJD rates. Individual circumstances can produce different results.

Had Ingrid and Lars's villa been priced at €300,000 instead, they'd have owed €27,000 in ITP alone — before adding legal, notarial, and registration costs. It's exactly this kind of gap that's easy to miss when comparing listing prices against a fixed retirement budget, which is why it's worth running these numbers before falling in love with a specific property, not after.

Other Costs to Budget For

1. Mortgage and financing costs

Ingrid and Lars bought without a mortgage, using proceeds from their Swedish house sale. If you're financing your purchase, there may be additional costs connected to the mortgage and property valuation, depending on the lender.

Planning to open a Spanish bank account? If you are buying property in Spain, having a local bank account can make it easier to manage your purchase and your ongoing household bills. We explain the process in our guide to how to open a bank account in Spain, including what documents you may need and what to expect as a non-resident. 

2. Currency exchange

This was one Ingrid and Lars felt directly: Sweden isn't in the eurozone, so converting kronor to euros exposed them to the SEK/EUR exchange rate on transfer day. For buyers moving money from outside the eurozone — UK, Swiss, or Scandinavian pensions included — this matters more on a fixed retirement income than for a working buyer with ongoing earnings to absorb a shortfall. There's no salary coming in next month to offset a bad transfer.

To put a number on it: a UK buyer transferring £260,000 to cover a €300,000 purchase is exposed to the GBP/EUR rate on the day they transfer. A shift of just 2 cents on the exchange rate — the kind of movement that can happen in a matter of weeks — can mean paying several thousand pounds more, or less, for exactly the same villa. Ingrid and Lars's bank offered to lock in a rate ahead of completion (a "forward contract"); in hindsight, they wished they'd asked about this sooner rather than transferring at whatever rate happened to apply on the day.

3. Renovation and furnishing

The villa Ingrid and Lars bought was older, and needed new air-conditioning units and a repainted pool area before they moved in — costs they'd budgeted loosely for, but which still came in higher than expected. This is particularly relevant for older villas and apartments in Costa Blanca South. You may need to budget for furniture and appliances, air-conditioning, kitchen or bathroom updates, painting and decorating, pool maintenance or renovation, garden work, and security systems. These aren't purchase taxes, but they're part of the real cost of getting your Spanish home ready to actually enjoy.

What Does It Cost to Own a Property After Buying?

Your financial planning should not stop at completion.

Once you own a property in Costa Blanca South, you may have recurring expenses such as:

• IBI (local property tax)

• Community fees for apartments and developments

• Building and contents insurance

• Electricity and water

• Pool and garden maintenance

• Repairs and general upkeep

• Waste collection charges

• Tax obligations that may apply to non-resident owners

As a rough illustration of the gap that surprised them: a two-bedroom apartment in a community with a shared pool in La Zenia might carry combined annual costs (IBI, community fees, insurance, utilities) in the region of €1,800–2,500, while a detached villa with a private pool, like theirs in Orihuela Costa, could easily run €3,500–5,000 a year once pool upkeep, garden maintenance, and higher insurance are included. These are indicative figures, not quotes — but they show why "can I afford the villa" and "can I afford to own the villa" are two different questions worth budgeting separately.

On the tax point specifically: non-resident property owners in Spain who don't rent out their property still generally need to file an annual Non-Resident Income Tax return (Modelo 210), declaring "imputed income" on the property even when it's used purely as a personal home. This is a genuinely easy one to overlook — Ingrid and Lars only learned about it from their gestoría after completion — and it's a recurring annual obligation, not a one-off. Full details are on the Agencia Tributaria's official Modelo 210 page.

This is why we recommend looking at the complete cost of ownership, not just the initial purchase — a lesson Ingrid and Lars learned slightly later than they'd have liked.

FAQs

1. How much are the total buying costs when purchasing property in Costa Blanca South? 

Budget roughly 10–13% on top of the purchase price, covering tax (ITP for resale, or VAT plus AJD for new-build), legal fees, notary costs, and registration. The exact figure depends on the property price, whether it's resale or new-build, and your individual circumstances.

2. What is the current ITP rate in the Valencian Community? 

As of 1 June 2026, the standard ITP rate for resale property is 9%, rising to 11% for properties over €1 million. This was reduced from the previous 10% rate, so double-check any source quoting the older figure.

3. Do non-resident owners pay tax after buying, even without renting the property out? 

Generally yes. Non-resident owners typically need to file an annual Modelo 210 return declaring imputed income on the property, even when it's used solely as a personal home rather than rented out.

4. Should I worry about currency exchange rates when buying? 

If you're transferring funds from outside the eurozone, yes — it's worth discussing rate-locking options with your bank ahead of completion, since even a small shift in the exchange rate can represent a meaningful sum on a property-sized transfer, particularly on a fixed pension income.

5. Are these costs different for a new-build versus a resale property? 

Yes. Resale properties are generally subject to ITP (9%, or 11% above €1 million). New-build properties bought directly from a developer are subject to 10% VAT plus 1.4% AJD instead.

Buying a Property in Costa Blanca South? Plan Your Budget Before You Buy

Ingrid and Lars still bought their villa, and they're happy there — but they'll tell you they wish they'd budgeted for the real total from the start, rather than working backward from the listing price after their offer was already accepted. For many European retirees, buying a home in Spain represents the largest financial decision of this stage of life. Understanding the real costs before you start viewing properties makes the process easier, and prevents the kind of last-minute surprise Ingrid and Lars had.

At E-Style Spain, we help you understand the full costs associated with your specific purchase, whether you're looking for a permanent home, a retirement property, or a second home in Costa Blanca South.

Want to know how much you really need to buy your Spanish home?

Book a free consultation with E-Style Spain to discuss your budget, property requirements and expected purchase costs.