Nowadays, you can find that buying a cheap property in Spain is very easy due to the big amount of properties on sale, especially in coastal areas.

This might be a very good time and a great idea for having a holiday home or a home to retire, but we should think not only about the property price, but also about the costs involved in the purchase.

The Transfer Tax in the Valencian Community is the 10% of the property price, but for those apartments sold for €45,000-€65,000 you will probably pay more than that.

Before buying the property, the Notary could find about the real value that the local government gives to the property. If you find out that the value given to the property by the local government is much higher than the property price, be prepared to receive a letter some months after the purchase requesting you tax compensation.

If you buy a property for €50,000 you will pay €5,000 as transfer tax (impuesto de transmisiones patrimoniales). If the property valuation of the local government is 75.000€, you will be requested to pay extra tax of €2,500 because you bought the property under its value.

We cannot be certain about this because sometimes the government does not revise every property purchase, but lately most of the buyers who bought a bargain property are receiving a request for tax compensation.

If you receive this letter, please make sure to pay it on time because if you don’t, you will receive a fine.