Costs of buying a flat in Madrid: what you pay on top of the price
On top of the price you have to add taxes and costs that, for a resale home, are usually around 7% of the price. Here is how to calculate them step by step, with examples, and where you can save.
Resale homes: each cost, one by one
If you buy a used home from a private seller, this is what you pay on top of the price:
- Transfer tax (ITP, Impuesto de Transmisiones Patrimoniales): 6% in the Madrid region, calculated on the higher of the price in the deed and the Land Registry reference value (valor de referencia del Catastro).
- Notary: fees are regulated and depend on the price; as a guide, between €600 and €1,200.
- Land Registry: also regulated fees; as a guide, between €400 and €800.
- Administrative agency (gestoría), if you hire one: between €300 and €500.
- Valuation, if you take out a mortgage: between €300 and €600, paid by you.
The notary, registry, agency and valuation figures are a guide only: they depend on the price and on each transaction. The transfer tax is the cost that really weighs.
Transfer tax reductions that may apply in Madrid
6% is the general rate, but in some cases you pay less:
- Main residence up to €250,000: a 10% reduction of the tax, so the effective rate is 5.4%.
- Large families (familia numerosa): a reduced 4% rate when buying their main residence, subject to the legal requirements.
- Buyers under 40: the Madrid regional government has announced a 4% rate from 2027 for homes up to €450,000, still pending approval.
Each reduction has its own conditions (deadlines to move in, to keep the home, to sell the previous one…). Check them for your case before signing, not after.
New builds: VAT and stamp duty instead of transfer tax
If you buy a brand-new home directly from the developer, you do not pay transfer tax. You pay VAT (IVA), generally 10% of the price (a lower rate applies to some subsidised housing), and stamp duty (AJD, Actos Jurídicos Documentados), which in the Madrid region is generally 0.75%.
VAT is paid with each instalment, so when buying off-plan you should plan for it from the reservation.
Three examples to calculate your costs
Using the guide figures above (notary, registry and agency between €1,300 and €2,500 in total):
- Resale flat at €300,000: transfer tax of €18,000. Total costs, roughly between €19,300 and €20,500.
- Resale flat at €220,000 as a main residence: reduced transfer tax of €11,880 (5.4%). Total costs, between €13,180 and €14,380.
- New-build flat at €300,000: VAT of €30,000 and stamp duty of €2,250. With notary and registry, around €33,000 to €34,000.
If you need a mortgage, remember that banks usually lend at most 80% of the lower of the price and the valuation: you will have to contribute that 20% plus all the costs. Programmes such as Mi Primera Vivienda allow financing above 80%, but the purchase costs are still on you.
What you do not have to pay, and where you really save
If you take out a mortgage, the bank pays the notary, registry and agency costs of the loan deed and the tax on that deed; you pay the valuation and any copies you request. The municipal capital gains tax (plusvalía) is paid by the seller in a normal sale, and the estate agent's commission is paid by whoever hired the agent. Make sure none of this appears on your bill.
But the biggest cost is not the taxes: it is the price. Every €10,000 off the price is €10,000 less to pay, plus €600 less transfer tax. That is where having someone negotiate for you and check everything before the deposit pays off most. If you are buying from abroad, see buying property in Madrid as a foreigner.
If you want us to review your purchase and calculate your real costs, the first consultation is free. After that I give you a fixed quote in writing.