Costs of buying a home in the Madrid region in 2026: taxes, notary, land registry and public aid

When working out whether a home is affordable, the most common mistake is to think only about the price. In the Comunidad de Madrid (Madrid region), on top of the down payment the bank requires, you need to add taxes, notary, land registry, gestoría (administrative agency) and valuation costs. On a resale home, that extra bill comes to around 6.5% of the price, and on a new build it can exceed 10%.

What is more, 2026 has arrived with prices at record highs: according to the Comunidad de Madrid's appraised value bulletin, the appraised price per square metre in the region reached €4,048 in the first quarter, 16.4% more than a year earlier. That is why it is worth having your full budget ready before you put down a reservation. We go through each item, who pays it and which aid schemes can ease the burden.

Resale homes: property transfer tax (ITP)

Buying a second-hand home is subject to the Impuesto sobre Transmisiones Patrimoniales (ITP, property transfer tax), which is managed by the Comunidad de Madrid. The standard rate is 6% and, unlike in other regions, there is no progressive scale based on the price. It is by far the biggest cost of the purchase.

Since 1 January 2022, under Ley 11/2021 (Law 11/2021), the tax is calculated on the valor de referencia (reference value) set by the Catastro (Spanish land registry for tax purposes), unless the price stated in the deed is higher, in which case the latter is used. If the reference value is higher than the price paid, you can ask for it to be corrected or appeal against it, but only when it has tax consequences.

Madrid offers several reductions when buying a main home:

Large families (familias numerosas): a reduced rate of 4% when buying their main home, provided they hold that status on the date of the deed. The OCU (Spanish consumers' organisation) also points out that the rules require the previous home to be sold within two years, where there is one.
A 10% tax relief on the amount payable when buying a main home worth up to €250,000, which leaves the effective rate at 5.4%. It has been in force since 2019 and the threshold has not been updated since.
Young people under 35: 100% ITP relief when buying their main home in municipalities with fewer than 2,500 inhabitants, with a maximum value of €250,000. It has applied since 29 November 2024 and requires the home to be occupied within twelve months.

The reality of the market limits how far these advantages reach: at current prices, few flats in the city of Madrid and its metropolitan area are under €250,000, and the relief for young people only applies to small towns and villages.

New builds: VAT and stamp duty (AJD)

When the home is bought from a developer, you pay VAT (IVA) rather than ITP. According to the Agencia Tributaria (Spanish Tax Agency), the rate applicable in 2026 to homes, including up to two parking spaces and annexes sold together with them, is 10%. Special-regime or publicly developed viviendas de protección oficial (state-subsidised homes) sold by the developer are taxed at 4%.

On top of that comes the Impuesto sobre Actos Jurídicos Documentados (AJD, stamp duty) on the deed. In the Comunidad de Madrid, according to the OCU, a scale applies to homes: 0.4% up to €120,000, 0.5% between €120,000 and €180,000, and 0.75% above that figure. Large families buying their main home get 95% relief on AJD, and there is a 10% relief for main homes worth up to €250,000.

For a €400,000 new-build home, VAT would come to €40,000 and AJD to another €3,000: €43,000 in taxes, compared with €24,000 in ITP for a resale home at the same price.

Notary, land registry, gestoría and valuation

Notary fees are regulated by an official scale (Real Decreto 1426/1989, Royal Decree 1426/1989) and depend on the value of the transaction, the number of pages and the copies. Rastreator usually puts them at between €600 and €1,200 for a sale. Housfy points out that, with copies, expenses paid on your behalf and VAT, the final bill usually ends up well above the base fee.

Registration at the Registro de la Propiedad (Land Registry) also has its own official scale (Real Decreto 1427/1989); Rastreator estimates a cost of between €400 and €800. The gestoría, which handles paying the taxes and submitting the deed to the registry, is optional and, according to Tinsa, costs between €300 and €500. If you take out a mortgage, a valuation is compulsory and starts at around €250.

Who pays what

The split of sale costs is set by article 1455 of the Código Civil (Spanish Civil Code): unless otherwise agreed, the seller pays for executing the deed (the original, or matriz) and the buyer pays for the first copy and the costs after the sale. In practice, the arras contract (deposit contract) or the deed often changes that split, so it is worth reading that clause carefully.

The buyer also pays the purchase tax (ITP, or VAT and AJD) and the land registry entry. The seller covers the plusvalía municipal (municipal capital gains tax), the cancellation of their mortgage if they have one and the income tax (IRPF) on the gain.

If there is a mortgage, Ley 5/2019 (Law 5/2019) sets its own split: the bank pays the gestoría, the notary for the loan deed and the land registry entry; the customer pays for the valuation and any copies they request. Since Royal Decree-law 17/2018, in force since 10 November 2018, the AJD on the mortgage is paid by the lender.

Example: a €400,000 resale flat in Madrid

Let's look at the case of a couple buying a €400,000 second-hand flat as their main home, with an 80% mortgage, not entitled to any tax relief and paying all of the notary costs for the sale, as often happens. As the price is over €250,000, the 10% relief does not apply.

Item	Who pays	Estimated amount
Price of the home	Buyer	€400,000
ITP (6%)	Buyer	€24,000
ITP for a large family (4%)	Buyer	€16,000 (instead of €24,000)
Notary for the sale	Seller pays the original and buyer the copy, unless otherwise agreed (art. 1455 Civil Code)	€600 - €1,200
Land Registry	Buyer	€400 - €800
Gestoría (optional)	Buyer	€300 - €500
Valuation	Buyer	From €250
Notary, registry, gestoría and AJD for the mortgage	Bank (Law 5/2019 and RDL 17/2018)	€0 for the buyer
Total costs for the buyer	Buyer	€25,550 - €26,750 (approx. 6.4% - 6.7%)
Down payment (20% not financed)	Buyer	€80,000
Total savings needed	Buyer	€105,550 - €106,750

Our own calculations using the Comunidad de Madrid ITP rate (6%) and indicative ranges from Rastreator (notary and registry, March 2026) and Tinsa (gestoría and valuation). Assumes the cadastral reference value does not exceed the price. Each notary, registry and bank may charge different amounts.

The result is clear: to buy a €400,000 flat with an 80% mortgage you need more than €105,000 in savings. If the buyer were a large family, the ITP saving would be €8,000.

It is also worth bearing in mind the payment timeline. Part of the down payment is usually paid in advance with the arras, while the rest of the price is paid on the day the deed is signed. Taxes and notary, registry and gestoría costs are paid in the following weeks, but the bank does not finance them: they have to come out of your own savings. So, even if the mortgage covers 80% of the price, the buyer needs to have both the down payment and the money for costs available from the start. And if the valuation comes in below the agreed price, the bank will calculate the 80% on the valuation and the amount you need to contribute will go up.

Regional aid: Mi Primera Vivienda

The Comunidad de Madrid's Mi Primera Vivienda (My First Home) scheme lets you obtain a mortgage above the usual 80%, up to 100% of the lower of the price and the valuation. According to the official information, updated on 8 September 2026, its main requirements are:

Being aged up to 40 (not yet 41) at the time of applying. There is no age limit for large or single-parent families, or for anyone who has had a child by birth or adoption.
Proving two years of continuous legal residence in the Comunidad de Madrid.
It must be your first home, used as your main residence for at least two years, and you must not own another one except in cases such as partial inheritances.
A maximum price of €390,000, raised to €425,000 by an order of 27 July 2026 for the new agreements with banks under the 2026 call.
Taking out the mortgage with a participating bank. The official website lists eight: CaixaBank, Santander, Ibercaja, ING, Unicaja, Kutxabank, Abanca and Banco Sabadell.

With the new limit, a €400,000 home like the one in the example could qualify for the scheme if the mortgage is signed with a bank taking part in the 2026 agreement. The savings needed would then come down to the purchase costs, although the resulting loan would be larger, and so would the monthly payments.

State aid: the ICO guarantee for young people and families

The ICO (Instituto de Crédito Oficial, Spain's state financial agency) guarantee scheme for buying a first home is aimed at young people aged up to 35 and at families with dependent children, with no age limit in the latter case. The State guarantees up to 20% of the loan, or up to 25% if the home has an energy rating of D or better, which makes it possible to finance almost the whole price. The deadline for signing transactions was extended to 31 December 2027, according to the BOE (Official State Gazette) published in early July 2026.

Income limits are set as multiples of the IPREM (Spain's public income benchmark index). The general limit is 4.5 times (€37,800 gross a year per person), but in high-demand areas such as Madrid it has been raised to 7.5 times, around €63,000, with increases per dependent child and for single-parent families. The maximum net wealth went up from €100,000 to €150,000. By 30 November 2025, 9,125 transactions had been guaranteed.

Both schemes aim to do the same thing, reduce the down payment, but they have different requirements and participating banks, so it is worth asking your bank which one fits your case best.

Tips to avoid surprises

Ask for a written breakdown of costs before signing the arras.
Check the property's reference value on the Catastro website: if it is higher than the price, you will pay ITP on that value.
Check whether you are entitled to a reduced rate or tax relief and gather the documents (large family certificate, empadronamiento, i.e. registration at the town hall) before signing.
Set aside an extra cushion for the move, minor works and utilities, which are not part of the deed but are part of the purchase.
Remember that ITP must be paid within the legal deadline after the deed; the gestoría or the notary can tell you the exact date.

If you also need to sell your current home to buy the new one, with Llavely you can do so for 2.5% plus VAT, all included, which you only pay if you sell, helping to free up part of the down payment. And as a buyer, you pay nothing at Llavely. This article is for information only: each individual case should be reviewed with a professional.

Frequently asked questions

How much ITP do you pay when buying a resale home in Madrid?

The standard rate is 6% on the higher of the price in the deed and the Catastro reference value. For a €400,000 flat that comes to €24,000, unless the buyer is entitled to a reduced rate or some form of tax relief.

What tax breaks are there in Madrid for buying a main home?

Large families pay ITP at 4% and get 95% relief on AJD. There is a 10% relief for main homes worth up to €250,000 and, since November 2024, 100% relief for under-35s in municipalities with fewer than 2,500 inhabitants, with the same value limit.

What taxes apply to a new-build home in Madrid?

You pay 10% VAT on the price (4% for certain state-subsidised homes) and the Actos Jurídicos Documentados (stamp duty) tax. In Madrid, for homes over €180,000 the AJD is 0.75%, so on a €400,000 new flat taxes come to around €43,000.

Who pays the notary in a sale?

Under article 1455 of the Civil Code, unless otherwise agreed, the seller pays for the original deed and the buyer for the first copy and subsequent costs. In practice, the split is usually negotiated and set out in the arras contract.

Which mortgage costs do I have to pay?

Under Law 5/2019, the buyer only pays for the valuation and any copies of the deed they request. The bank covers the gestoría, the notary for the mortgage and its registration, and since November 2018 also the AJD on the loan.

How much do I need in savings for a €400,000 flat?

With an 80% mortgage, you need €80,000 for the down payment plus around €25,500 to €26,800 in costs and taxes if it is a resale home with no tax relief. In total, a little over €105,000.

Who is eligible for Mi Primera Vivienda?

People aged up to 40 with two years of continuous legal residence in the Comunidad de Madrid who are buying their first main home, with no age limit for large or single-parent families or those with newborn or adopted children. The maximum price is €390,000, raised to €425,000 for agreements under the 2026 call.

What does the ICO guarantee cover and until when can you apply?

The ICO guarantees up to 20% of the loan, or 25% if the home has an energy rating of D or better, for young people aged up to 35 and families with children. Transactions can be signed until 31 December 2027, and there are income and wealth limits, the latter set at €150,000.

What is the reference value and why does it matter?

It is a value calculated by the Catastro for each property which, since 2022, serves as the minimum base for ITP. If it is higher than the agreed price, you will pay the tax on that value, although you can ask for it to be corrected or appeal against it.

Which costs fall to the seller?

The seller pays the plusvalía municipal, the cancellation of their mortgage if they have one, the original deed unless otherwise agreed and the income tax on the capital gain. If they sell through an agency, also its commission.