How much does it cost to buy in Madrid?
Work out the total project cost, your own contribution, the mortgage and the expected cash flow. The starting figures are just an example: replace them with those of your own purchase. Before you start viewing properties, it's worth talking to the banks.
What the cost of buying a home in Madrid includes
Besides the price, buying in Madrid adds taxes, deed costs and, if you finance the purchase, some mortgage costs. This guide explains what the calculator takes into account, who pays each item and what to know before making an offer.
Purchase tax: ITP, or VAT + AJD
On a resale home you pay the transfer tax (Impuesto de Transmisiones Patrimoniales, ITP). The general rate in the Community of Madrid is 6%: on an €800,000 home, that is €48,000. A new build carries no ITP; instead you pay 10% VAT plus stamp duty (Actos Jurídicos Documentados, AJD), which in Madrid is generally 0.75%. The tax base can be the cadastral reference value when it is higher than the price stated in the deed. Reduced rates exist for specific groups, such as large families, and the calculator does not apply them automatically: you can edit the rate by hand.
Notary, land registry and admin fees
The sale deed, its registration at the Land Registry and the agent who files the taxes are usually paid by the buyer. The amount depends on the price and the transaction: by default the calculator uses 1.2% of the price as a rough estimate, which you can adjust once you have a quote.
If you finance: what the bank pays and what you pay
Since Spain's 2019 Real Estate Credit Contracts Act, the bank covers the notary, registry, admin fees and AJD of the mortgage deed. The costs of the purchase itself remain with the buyer, and so does the property appraisal. The calculator estimates the monthly payment with a standard fixed-instalment schedule, based on the amount financed, the interest rate and the term.
Works, furnishing and fees
If you plan to renovate or furnish, add its cost: it is part of what you really invest. Lula Select's fee is a fixed amount agreed in advance in the mandate, and we work only for the buyer.
Returns: gross, net and ROI
Gross yield divides annual rent by the price (or by the total cost). Net yield first deducts the owner's costs, such as property tax (IBI), community fees, insurance or vacancy periods. Cash flow is what is left each year after those costs and the mortgage payment. Total ROI measures the gain against the capital you put in yourself, and the IRR is the equivalent annual return, taking into account when money comes in and goes out.
What the calculator does not include
It leaves out tax on rental income, the municipal capital-gains tax (plusvalía), selling costs and the appraisal. The appreciation in the projection is an assumption to compare scenarios, not a market forecast.
Frequently asked questions
How much tax do you pay when buying a home in Madrid?
On a resale home, the general ITP rate of 6% of the property value. On a new build, 10% VAT plus 0.75% AJD. Reduced rates may apply depending on the buyer and the property.
What costs does the buyer pay on top of the price?
The purchase taxes, the notary, registry and admin fees of the sale and, if there is a mortgage, the appraisal. If you renovate or furnish, the cost of the works too.
How much cash do I need if I take out a mortgage?
The difference between the total project cost and the amount financed. The calculator shows it as your own contribution: with the example values (an €800,000 home and 60% financing) it comes to about €419,600, including taxes, costs, works and fees.
Can I use the calculator to buy to let?
Yes. Enter the expected monthly rent and the owner's costs, and it calculates cash flow, returns and a multi-year projection.
Is the result a final figure?
No. It is an indicative estimate. Rates and reductions depend on each case and may change. Before buying, confirm the amounts with a tax adviser and your bank. Lula Select can help you prepare the purchase.
Tax information reviewed in October 2026. General information, not personalised tax, legal or financial advice.