Unexpected or hidden costs when buying property in Malaga

When you start looking at properties in Malaga, it’s easy to get caught up in the asking price.

A beautiful apartment in the historic centre or a beachfront villa in Pedregalejo can seem like a dream deal… until hidden costs start to add up.

For many foreign buyers, these additional expenses come as a surprise and can quickly add around 10% to the purchase price.

Understanding these costs before you make an offer is crucial. From taxes and legal fees to ongoing maintenance, knowing what to budget for will save you stress, money and awkward surprises down the line.

READ MORE: Step-by-step guide to buying property in Malaga

Taxes when buying property in Malaga

The first, and often largest, set of extra costs comes from taxes. Spain has a few different taxes depending on whether you are buying a new-build or a resale property.

• Property Transfer Tax (ITP) applies to the resale of properties and varies across Andalucía, typically ranging from 7% to 10% of the purchase price. For example, if you’re buying a €300,000 apartment in Malaga, expect around €21,000 in transfer tax alone.
• For new-build properties, VAT (IVA) replaces ITP. Standard VAT for residential properties is 10%, while certain commercial properties or luxury units may be subject to a higher rate of up to 21%.
• There is also Stamp Duty (AJD) on registering the deed, typically 1–1.5% of the property price.

These taxes are unavoidable, so it’s important to factor them into your total budget right from the start.

Legal and notary fees for Malaga property purchases

Buying property in Spain isn’t just about paying the seller; it’s also about understanding the local regulations and requirements. You’ll also need a notary and often a lawyer or gestor to handle paperwork—especially if you’re a foreign buyer.

Notary fees typically range from €600 to €1,200, depending on the property value, and land registry fees are usually €400 to €700.

Hiring a lawyer or estate agent is highly recommended, particularly if you don’t speak Spanish fluently. Fees are typically 1% of the property price or a set fee (negotiable), but this can help you avoid costly mistakes.

Be sure always to get a clear breakdown of all fees in advance. Some buyers are shocked when they see the total at signing, but knowing the numbers early keeps everything manageable.

Ongoing costs for Malaga properties

The extra expenses don’t stop once you’ve signed at the notary. Owning a property in Malaga comes with ongoing costs you’ll need to budget for.

• Community fees (Comunidad) are the most variable cost. These fees cover the maintenance of shared areas, such as the lift, pool, gardens and building cleaning. For a standard apartment, fees can range from €30 to €150 per month. If it’s a luxury complex with extensive facilities (such as 24-hour security, indoor pools or a gym), these fees can easily be €250 per month or more.
• Local property tax (IBI) is paid annually. To calculate this, you need to know the valor catastral (cadastral value) of the property, which is typically much lower than the actual market price (often between 30% and 70% of what it’s worth). On that, you pay a small percentage, which for Malaga is around 0.45%, while other areas can be higher (up to 1.1% or more).
• Property insurance for the building. €200 to €350 per year is a general estimate for a typical apartment, but prices can be much higher, as they are based on the property’s rebuild cost and the value of its contents. A larger detached villa, a property with high-quality building materials, or a home containing more valuable items (such as art, jewellery or high-end electronics) will command a significantly higher premium.
• Electricity for a two-person household should cost around €60 to €100 per month. This depends on your use of air conditioning (a major factor), the efficiency of your appliances and the type of contract you have.
• Water is generally quite cheap. For two people, a typical monthly bill would be €15 to €30.
• A standard high-speed fibre internet package is very competitive. You can expect to pay €25 to €50 per month for this, and it often includes a landline and sometimes a mobile phone line or two.

For a mid-range property in Malaga, it’s realistic to expect €1,500 to 3,000 in annual ongoing expenses. Knowing this helps you avoid surprises, especially if you’re planning to rent out the property or use it as a holiday home.

The most common unexpected costs

Even after you account for taxes, legal fees and ongoing expenses, there are a few extra costs that can catch foreign buyers off guard.

Mortgage-related fees are a big one if you plan to borrow. Spanish banks usually charge arrangement fees, property valuations, and, in some cases, early-repayment penalties. Make sure you check all conditions before signing.

Renovation or furnishing costs are another factor. Many buyers purchase properties that need updates or they simply want to make them their own. Even minor changes can add thousands of euros:

• For a basic renovation, approximately €500/m² covers a functional update to materials, electrics and plumbing.
• For mid-range improvements, around €750/m² covers a standard complete renovation using good, mid-range materials for the kitchen, bathroom, and flooring.
• A high-end renovation will cost €1,000/m² and up. This budget covers a premium renovation using luxury materials, designer fittings and custom-made elements.

Currency exchange fees can also add up if you’re transferring money from abroad. Depending on how you send funds, these charges can eat into your budget significantly.

Finally, there can be unexpected legal or administrative costs. Occasionally, properties come with unresolved debts or paperwork issues. This is why a local lawyer or agent is essential: they can spot potential problems before you commit.

Tips to avoid any unpleasant surprises

To make sure your Malaga property purchase goes smoothly, follow these simple tips:

1. Get a detailed cost breakdown from your lawyer or agent before signing anything. This will show you precisely what you need to pay and when.
2. Maintain a contingency budget of 10–15% of the property price for unexpected costs. It’s much better to be prepared than caught off guard.
3. Use a local mortgage broker if you’re financing your purchase. They know the best deals and can explain all fees clearly, especially if you don’t speak Spanish.
4. Ask other expats or neighbours about community fees, if there is a “derrama” (a temporary increase in community costs to cover an ongoing project), utility costs and any quirks specific to the area. First-hand insights are invaluable.
5. Go to the bank yourself. Often, going in person can unlock deals that are otherwise unavailable.

Get your dream home in Malaga now!

Buying a property in Malaga is an exciting step, but it’s important to remember that the asking price is just the beginning. Taxes, notary fees, ongoing costs, and unexpected expenses can quickly add up, so budgeting carefully is key.

By understanding all the hidden costs and planning ahead, you can enjoy your new home without surprises.

For personalised advice and up-to-date guidance, our Malaga property expert is ready to help. Contact us today at property@malagaguru.com to discuss your options, get answers to your questions, and start your journey to owning a home in Malaga with confidence.

Michael Fee

Michael is a Scottish property specialist who has called Malaga home since 2019. With experience managing short-term rentals, he knows what makes a property stand out and what makes it a smart investment. Now, he helps clients find homes or investment opportunities across the Costa del Sol, from Malaga to Nerja and Estepona. For expert guidance, contact him at property@malagaguru.com.