Before committing to a property purchase in Spain, understanding the full cost picture is essential. The headline price is only part of the equation. Buyers should budget for IVA (VAT) at 10% on new builds, plus stamp duty (AJD) of 1-2% depending on the region. Notary fees, land registry costs, and legal representation typically add another 1.5-2%. For a €200,000 new-build apartment, the total acquisition cost lands around €224,000-€228,000. Non-resident mortgage holders should also factor in arrangement fees and annual account maintenance charges from Spanish banks.
On the returns side, gross rental yields in popular coastal areas like Torrevieja and Alicante generally range from 5-8% for well-located properties managed through holiday rental platforms. However, net yields after management fees (typically 15-25%), community charges, local taxes (IBI), and income tax on rental earnings (currently 19% for EU residents, 24% for non-EU) are considerably lower. A realistic net yield sits around 3-5% for most scenarios. Capital appreciation adds another dimension: over the past five years, new-build values in the Valencian Community have grown at roughly 4-6% annually, though past performance does not guarantee future gains.
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