Lately, more and more people on the forum are discussing buying property, and I’m right there with them, getting dizzy from all the options. After doing some research, I’ve found that the down payment issue is far more complex than I thought—it’s not just a simple percentage of the property price. I’m starting this thread to share what I’ve learned and welcome any corrections or additions from the veterans here!
The Core Question: Are You a Tax Resident?
This is arguably the most critical factor banks consider when deciding how much to lend you! Your residency status makes a huge difference in the down payment percentage.
Tax Residents: If you have legal residency in Spain, spend more than 183 days a year in the country, and have a stable job with proof of income, banks are usually willing to offer a mortgage of up to 80%. This means that for your down payment on a Spanish property, you’ll need to cover 20% of the property price yourself.
Non-Tax Residents: If you don’t have long-term residency in Spain or your main source of income is outside the country, banks will see you as a higher-risk client. As a result, the loan-to-value ratio typically drops to 60% - 70%, or even lower. This means for your Spanish property down payment, you’ll need to prepare at least 30% - 40% of the property price.
Don’t Forget! The Biggest Expense is Actually Taxes and Fees
At first, I thought having that 20% ready was all I needed—how naive of me. There’s another huge chunk of mandatory costs during the buying process that the bank will not finance for you; you have to pay for it out of your own pocket. Generally, these costs amount to about 10% - 15% of the property price, depending on the autonomous community and the type of property.
Below is a table I’ve put together listing the main fees:
| Fee Item | Type | Approximate Cost |
|---|
| Property Transfer Tax (ITP) | Resale Property | 6% - 10% |
| VAT (IVA) | New Property | 10% |
| Stamp Duty (AJD) | New Property | 1% - 1.5% |
| Notary Fees | | 0.2% - 0.5% |
| Property Registry Fees | | 0.1% - 0.25% |
| Gestoría (Admin) Fees | | €300 - €600 (Varies) |
| Property Appraisal Fee | | €300 - €500 (Varies) |
Let’s Do the Math
For example, let’s say you’re interested in a resale property valued at €250,000 in a region where the ITP is 8%.
See the difference? So, when preparing your initial funds, a simple, rough but safe formula is: Down Payment + Taxes & Fees. If you budget based on this, you’ll be on solid ground.
I hope this information is helpful for everyone who is currently house-hunting! Feel free to share your own experiences. What percentage did your down payment and fees amount to when you bought your place? Any money-saving tips to share?
