The Cost of Living on the Costa del Sol

Understanding the true cost of living on the Costa del Sol means separating three things: the one-off cost of buying, the recurring taxes every owner pays, and the day-to-day cost of actually living here. For foreign buyers the day-to-day is usually the pleasant surprise, while the buying and ownership taxes are where budgets go wrong. This guide sets out the real figures for the whole Costa del Sol, from Nerja through Malaga, Fuengirola and Marbella to Estepona and La Alcaidesa, with every number tied to an official or documented source.

The cost of buying: taxes and fees on the Costa del Sol

Your largest single outlay after the price itself is the acquisition cost, and it depends on whether the home is new-build or resale.

New-build property

A new home bought directly from a developer is subject to IVA (VAT) at 10 per cent of the price, plus AJD (stamp duty, Actos Jurídicos Documentados) at 1.2 per cent in Andalusia. That is 11.2 per cent in taxes alone. ¹⁷

Resale property

A resale home instead pays ITP (Impuesto sobre Transmisiones Patrimoniales) at a flat 7 per cent in Andalusia, calculated on the higher of the price paid or the reference value (valor de referencia) set by the Catastro. There is no separate stamp duty on resale. ¹

On top of the tax, budget for notary fees (roughly 0.2 to 0.5 per cent), Land Registry fees (roughly 0.1 to 0.25 per cent), and independent legal fees (typically 1 to 1.5 per cent plus IVA). ⁷ As a rule of thumb, total buying costs land at around 11 to 14 per cent of the price, so a 400,000 euro home carries roughly 44,000 to 56,000 euros of costs. Our related guide on Buying Costs and Taxes on the Costa del Sol breaks each line down.

You will also need an NIE (Spanish foreigner identification number) before completing, which is covered in our NIE and Spanish Bank Account guide.

Financing: mortgages for non-residents

Spanish banks lend to non-residents but on tighter terms. Buyers with EU tax residency typically access up to 60 to 70 per cent loan-to-value on a second home, while buyers from outside the EU (including UK buyers after Brexit) are often capped nearer 50 to 60 per cent. ¹⁰ In practice a non-resident should expect to fund at least 30 to 40 per cent of the price, plus all the buying costs above, from their own liquid funds. See Getting a Spanish Mortgage as a Non-Resident for lender criteria and documentation.

Recurring taxes every owner pays

IBI (local property tax)

IBI (Impuesto sobre Bienes Inmuebles) is the annual council property tax, set by each town hall on the cadastral value (valor catastral), which is usually well below market value. Rates across Costa del Sol municipalities generally sit between about 0.4 and 0.8 per cent of the cadastral value: Marbella is around 0.67 per cent and Malaga city around 0.65 per cent. In cash terms most owners pay somewhere between roughly 300 and 1,500 euros a year, with larger Marbella villas paying more. ⁸

Modelo 210: non-resident income tax (IRNR)

This is the tax foreign owners most often forget. If you are not tax-resident in Spain and the property is not rented, Spain still charges an imputed income tax via Modelo 210 (IRNR, Impuesto sobre la Renta de no Residentes). The taxable base is 1.1 per cent of the cadastral value (2 per cent if that value has not been revised in the last ten years), and the rate is 19 per cent for EU/EEA residents or 24 per cent for non-EU residents. ² It is filed annually, generally by 31 December of the following year.

If you let the property, rental income is also declared on Modelo 210. EU/EEA landlords pay 19 per cent and may deduct expenses; non-EU landlords pay 24 per cent with no deductions. Our Renting Out Your Costa del Sol Property guide covers the filing detail.

Community fees and utilities as owner costs

Most apartments and townhouses belong to a community of owners (comunidad de propietarios) with monthly fees for shared pools, gardens, lifts and security. These vary widely by development, from modest sums to several hundred euros a month in resorts with extensive facilities, and are separate from tax.

Day-to-day cost of living

Once the property is yours, the Costa del Sol remains noticeably cheaper than the UK, Germany or the Nordics for everyday life. A couple can generally live comfortably on around 2,100 to 3,200 euros a month, covering utilities, food, healthcare and leisure (excluding any mortgage). ¹¹

• Utilities (electricity, water, gas, high-speed internet): roughly 150 to 250 euros a month, with electricity peaking in August due to air conditioning. ¹¹
• Groceries: roughly 200 to 350 euros a month per person at chains such as Mercadona or Lidl, meaningfully below northern European levels. ¹¹
• Eating out and leisure: menus del día and local wine keep dining affordable relative to home markets.

Healthcare

Private health insurance is affordable and is often required for a visa. Cover typically runs 50 to 150 euros a month depending on age. ¹¹ Once you are a legal resident for at least 12 months and are not covered by any other means, you can join the public system through the Convenio Especial, a pay-in scheme costing 60 euros a month under age 65 and 157 euros a month at 65 or over (2025 rates), which grants full public healthcare access though prescriptions are not fully covered. ⁴ Retirees on a UK or EU state pension may instead qualify for cover via an S1 form. See Healthcare for Foreign Residents in Spain.

Residency and visas

Buying property no longer creates a fast route to residency. Spain ended its Golden Visa scheme on 3 April 2025; existing holders may keep and renew, but property purchase is no longer a qualifying investment for new applicants. ⁵ Non-working buyers who want to live here full time now typically use the non-lucrative visa (NLV), which requires proof of passive income of roughly 400 per cent of the IPREM index (about 2,400 euros a month for the main applicant, plus around 600 euros a month per dependant) and private health cover. ⁶ Working remotely may instead point you to the digital nomad visa. Our Visas and Residency for Property Buyers guide compares the options.

What it costs to sell later

Planning the exit matters too. When a non-resident sells, the buyer must withhold 3 per cent of the sale price and pay it to the Agencia Tributaria on Modelo 211 within one month, as an advance against your capital gains tax. ³ The gain itself is then settled on Modelo 210, taxed at 19 per cent for EU/EEA sellers and 24 per cent for non-EU sellers, with agency fees, buying taxes, documented improvements and the municipal plusívalia deductible from the gain. ⁹ The plusvalía municipal, a separate town-hall tax on the increase in land value over your ownership period, is also due on sale. ⁹

Putting it together

For a realistic picture, split your budget in two. One-off: price plus 11 to 14 per cent buying costs. Ongoing: IBI, the Modelo 210 non-resident tax, community fees, utilities and insurance on top of normal living costs of roughly 2,100 to 3,200 euros a month for a couple. The lifestyle is affordable; the taxes are the part worth planning for with a Spanish lawyer or gestor before you sign.

Figures are indicative and correct to 2025/2026 sources cited below. Tax situations vary by personal circumstances and municipality, so confirm your own position with a qualified professional. School fees for international schools on the coast vary widely by institution and are not covered in detail here.