Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Madrid's property market is included in our pack
Buying property in Madrid involves numerous hidden costs that can add 10-15% to your purchase price.
Beyond the property transfer tax and notary fees that most buyers expect, Madrid property purchases include stamp duty, community fees, municipal taxes, and various administrative costs that can quickly accumulate to thousands of euros.
If you want to go deeper, you can check our pack of documents related to the real estate market in Madrid, based on reliable facts and data, not opinions or rumors.
Madrid property buyers face a 6% transfer tax as the primary cost, with notary fees ranging €600-€1,000 and registry fees €300-€600.
Additional costs include 1-2% legal fees, 0.75% stamp duty on mortgages, and ongoing community fees averaging €50-€200 monthly.
| Cost Type | Amount/Percentage | Who Pays |
|---|---|---|
| Property Transfer Tax (ITP) | 6% of property value | Buyer |
| Notary Fees | €600-€1,000 (0.2-0.5%) | Buyer |
| Registry Fees | €300-€600 (0.1-0.25%) | Buyer |
| Legal Fees | 1-2% of purchase price | Buyer |
| Stamp Duty (AJD) | 0.75% of mortgage amount | Buyer |
| Valuation Fees | €300-€600 | Buyer |
| Bank Arrangement Fees | 0.5-1% of loan value | Buyer |
How much is the property transfer tax (Impuesto de Transmisiones Patrimoniales) in Madrid right now, and does it vary by property value?
The property transfer tax in Madrid is currently 6% of the higher value between the purchase price and the cadastral reference value as of September 2025.
This 6% rate applies to most standard residential property purchases in Madrid. However, Madrid applies progressive rates for higher-value properties, with rates increasing to 7% for properties between €250,000 and €1,000,000, and up to 8% for properties above €1,000,000.
Reduced rates of 4% are available for qualifying buyers, such as large families (familias numerosas) or buyers under certain age thresholds purchasing their primary residence. These reductions require specific documentation and approval from Madrid's tax authority.
The tax is calculated on whichever is higher: your actual purchase price or the official cadastral value assigned by the municipality. This prevents buyers from declaring artificially low purchase prices to avoid taxes.
It's something we develop in our Spain property pack.
What percentage do I need to budget for notary fees in Madrid, and are they fixed or dependent on the property price?
Notary fees in Madrid are regulated by the Spanish state and depend directly on the property price, typically ranging from €600 to €1,000 for average apartments.
These fees represent approximately 0.2-0.5% of the property value and increase on a sliding scale set by Spanish law. The fees are not fixed amounts but rise gradually with property price to ensure fairness across different price ranges.
For a €300,000 apartment in Madrid, expect notary fees around €700-€800. For a €500,000 property, fees typically reach €900-€1,000. Higher-value properties may incur slightly higher fees due to additional documentation requirements.
Additional costs may apply if your deed requires multiple pages, annexes, or special legal acts. Complex transactions involving corporate buyers or special financing arrangements may also increase notary fees.
The notary's role includes verifying all legal documents, ensuring proper property title transfer, and registering the transaction with Spanish authorities.
How much are the property registry fees in Madrid, and what's the usual calculation method?
Property registry fees in Madrid are government-regulated and typically cost €300 to €600 for standard residential properties, representing roughly 0.1-0.25% of the property price.
These fees follow a sliding scale that increases slightly with property value, similar to notary fees. The Land Registry (Registro de la Propiedad) uses this standardized fee structure to ensure consistent pricing across all transactions.
For properties valued at €200,000-€400,000, registry fees typically fall between €350-€500. Properties above €500,000 may reach the upper range of €500-€600 due to additional administrative requirements.
The registry fee covers the official recording of your property ownership, title verification, and issuance of the updated property certificate (nota simple). This certificate proves your legal ownership and is required for future sales or mortgage applications.
Payment is made directly to the Property Registry office, and the process typically takes 10-15 business days to complete after document submission.
What legal fees should I expect when hiring a property lawyer in Madrid, and is there a typical range or percentage of the property price?
Property lawyer fees in Madrid typically range from 1-2% of the purchase price before VAT, with most straightforward residential transactions falling toward the lower end of this range.
| Service Type | Fee Range | Notes |
|---|---|---|
| Standard Purchase Review | 1-1.5% + VAT | Simple residential transactions |
| Complex Transactions | 1.5-2% + VAT | Corporate buyers, financing issues |
| Cross-border Transactions | 2% + VAT | Foreign buyers, currency issues |
| Fixed Fee Services | €1,500-€3,000 | Depends on complexity |
| Due Diligence Only | €800-€1,500 | Document review, title search |
Some law firms offer fixed-fee arrangements ranging from €1,500 to €3,000 depending on transaction complexity. This can be more cost-effective for higher-value properties where percentage-based fees would exceed these amounts.
Foreign buyers often face higher fees due to additional requirements such as NIE number assistance, document translations, and cross-border legal compliance. These services may push total legal costs toward the 2% range.
Legal fees cover contract review, title verification, liaising with banks and notaries, attending the signing ceremony, and ensuring all legal requirements are met throughout the purchase process.
Don't lose money on your property in Madrid
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How much are the valuation and survey costs in Madrid, and which ones are mandatory if I buy with a mortgage?
Property valuation fees in Madrid typically cost €300-€600 and are mandatory when purchasing with a mortgage, as Spanish banks require an independent appraisal.
The valuation (tasación) is performed by a certified appraiser approved by your mortgage lender. The cost depends on property size, location, and complexity, with larger or unique properties requiring higher fees.
Structural surveys are optional but highly recommended for older Madrid properties, typically costing €400-€900 for a comprehensive technical inspection. These surveys identify potential structural issues, electrical problems, or maintenance needs that could affect your investment.
Banks require the valuation to ensure the property value supports the loan amount. The appraiser will assess market conditions, property condition, and comparable sales in your Madrid neighborhood.
For properties built before 1980, consider investing in both valuation and structural survey to avoid costly surprises. The combined cost of €700-€1,500 can prevent much larger expenses if significant issues are discovered.
What bank or mortgage arrangement fees are standard in Madrid, and do they differ between Spanish and foreign buyers?
Bank arrangement fees (comisión de apertura) in Madrid typically range from 0.5-1% of the loan value, though promotional zero-fee mortgages are sometimes available.
Most Spanish banks charge similar arrangement fees regardless of buyer nationality. However, foreign buyers often face additional documentation requirements and may need to provide more extensive financial history, which can indirectly increase costs through legal and translation services.
Standard bank fees include the arrangement fee, valuation fee (mentioned above), and potential early repayment clauses. Some banks also charge monthly account maintenance fees if you're required to domicile your salary with them.
Foreign buyers should budget for additional services such as currency exchange fees if financing comes from outside Spain, and potential higher interest rates if they cannot demonstrate Spanish employment history.
Shop around among different Spanish banks, as arrangement fees can vary significantly. Some banks waive these fees entirely during promotional periods or for high-value mortgages.
How much is the stamp duty (Actos Jurídicos Documentados) in Madrid for mortgage deeds, and who is responsible for paying it?
Stamp duty (AJD) in Madrid is currently 0.75% of the mortgage principal amount and is typically paid by the buyer as of September 2025.
This tax applies to the notarized mortgage deed, not the property purchase price. For example, if you purchase a €400,000 property with a €320,000 mortgage, you'll pay AJD on the €320,000 loan amount, resulting in €2,400 in stamp duty.
The buyer is responsible for paying AJD unless specifically agreed otherwise in the purchase contract. This represents a change from previous years when responsibility was sometimes disputed between buyers and banks.
Payment must be made within 30 days of signing the mortgage deed at the notary. Late payment incurs penalties and interest charges that can significantly increase the total cost.
Cash buyers do not pay stamp duty since there is no mortgage deed to tax. This is one advantage of cash purchases in Madrid's real estate market.
What ongoing community fees should I expect for an apartment in Madrid, and how are they calculated?
Community fees for Madrid apartments typically range from €50-€200 per month for standard properties, with luxury buildings reaching several hundred euros monthly.
1. Basic maintenance buildings: €50-€80/month 2. Properties with elevator and basic amenities: €80-€120/month 3. Buildings with swimming pool: €120-€180/month 4. Luxury buildings with gym, concierge, gardens: €200-€500/month 5. Historic buildings requiring special maintenance: €150-€300/monthFees are calculated based on your ownership percentage (cuota de participación) of the building's total value. This percentage is determined by your apartment's size relative to the entire building and cannot be changed.
The owners' association (comunidad de propietarios) sets annual budgets covering elevator maintenance, cleaning, insurance, utility costs for common areas, and building repairs. Your monthly fee represents your share of these collective expenses.
Before purchasing, request the building's last three years of community fee statements and meeting minutes. This reveals potential upcoming major expenses like roof repairs or elevator replacement that could increase fees significantly.
It's something we develop in our Spain property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What municipal taxes, like the annual property tax (IBI), should I factor into the first year after purchase in Madrid?
The annual property tax (IBI) in Madrid averages 0.4-1.2% of the cadastral value, typically resulting in €300-€800 annually for most apartments.
IBI is calculated on the cadastral value (valor catastral), which is usually lower than market value. Madrid's municipal government sets the tax rate, which can vary by neighborhood and property type within the city limits.
Additional municipal taxes include the annual waste collection tax (tasa de basura), typically €80-€150 per year depending on property size and location within Madrid.
Non-resident buyers face an additional tax burden through IRNR (Impuesto sobre la Renta de No Residentes), which imputes rental income even if you don't rent the property. This tax typically costs €200-€600 annually.
All municipal taxes are payable annually, usually in the second quarter of each year. Setting up direct debit payments can help avoid late fees and ensure timely payment while you're not residing in Spain.
Are there additional costs for foreigners buying in Madrid, such as NIE application, translation, or sworn interpreter services?
Foreign buyers in Madrid face several additional costs that Spanish buyers avoid, primarily related to documentation and language requirements.
| Service | Cost Range | When Required |
|---|---|---|
| NIE Application | €10-€20 + processing | Always required |
| Gestor/NIE Assistance | €50-€200 | If using professional help |
| Sworn Translation | €250-€700 | If not fluent in Spanish |
| Document Apostille | €50-€150 per document | For foreign bank statements |
| Embassy Certification | €100-€300 | For income/employment proof |
The NIE (Número de Identificación de Extranjero) is mandatory for all foreign property buyers and costs €10-€20 for the application. However, many buyers use a gestor service costing €50-€200 to handle the bureaucratic process and appointment scheduling.
Sworn interpreter services are only required if you're not fluent in Spanish during the notary signing ceremony. These services cost €250-€700 depending on session length and complexity.
Document translations and apostilles may be required for foreign bank statements, employment contracts, or marriage certificates if applying for joint ownership. These costs can add €300-€800 to your total expenses.
What moving-in or utility connection fees should I expect in Madrid, and how much do they typically cost?
Utility connection and setup fees in Madrid typically cost €100-€300 per service for electricity, water, and gas connections.
1. Electricity connection (Iberdrola/Endesa): €100-€200 2. Water service transfer: €50-€100 3. Gas connection: €100-€250 4. Internet/telephone setup: €30-€80 5. Community mailbox key: €20-€50Most Madrid properties have existing utility connections, so you're typically paying for service transfers rather than new installations. This involves changing the account holder name and updating billing information.
Deposits may be required for each utility service, typically one month's estimated usage. These deposits are refundable when you eventually close the accounts.
Internet and telephone services require separate contracts with providers like Telefónica, Vodafone, or Orange. Installation fees range from €30-€80, with some providers waiving fees during promotional periods.
Budget approximately €300-€500 total for all utility setups and first-month deposits when moving into your Madrid property. These costs are typically due within the first month of ownership.
Are there any hidden costs at resale in Madrid, like plusvalía municipal tax, that I should already anticipate when buying?
The plusvalía municipal tax is paid by the seller at resale and is calculated on the theoretical increase in cadastral land value during the ownership period.
While sellers pay this tax, buyers should understand it affects resale negotiations and potential net proceeds when they eventually sell. The tax can range from hundreds to thousands of euros depending on property value and ownership duration.
Other resale costs buyers should anticipate include capital gains tax (for non-residents), real estate agency commissions if using an agent, and utility/community fee clearance certificates proving all payments are current.
Property energy efficiency certificates are now mandatory for resales and cost €100-€300 to obtain. These certificates rate your property's energy performance and may affect marketability.
It's something we develop in our Spain property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Madrid property buyers should budget 10-15% above the purchase price for all closing costs and taxes.
The largest single expense is the 6% property transfer tax, followed by legal fees, notary costs, and ongoing community fees that vary significantly by building amenities.
Sources
- Idealista - ITP por comunidades 2024
- Idilic Realty - Impuestos compra inmueble Madrid
- Idealista - Costs and taxes buying home Spain
- Luxton Legal - Cost to buy property Spain 2025
- Lawants - Buying house Spain
- MH Marbella Estates - Property purchase tax Spain
- Barnes Madrid - Costs and taxes buying property Madrid
- Coming to Spain - Cost of buying house